Luby’s (LUB) Update2

What is Luby’s competitive advantage? Understanding Luby’s Position in the Restaurant Value Chain.

Luby’s is unique because there are few cafeteria style restaurants that are still around today, having been overtaken by casual dining over the past couple of decades. Luby’s sits somewhere between casual dining and quick service. However, unlike most cafeteria restaurants, the food that they prepare is made on site everyday. For example, the potatoes for the mashed potatoes are peeled everyday. As a result, the company tends to have larger buildings than the typical cafeteria to accommodate a larger kitchen. Luby’s straddles the best of both worlds with the value pricing and convenience of quick service and the food quality of casual dining.

Scuttlebutt: Luby’s Customers, Dining Experience, and Worker Training.

The buffet at Luby’s consists of 12 to 16 salad items, 12 to 18 proteins, and a variety of vegetables, breads and deserts. The company uses a menu board system of about 13 to 14 grouped meals in place of a la carte offerings that hangs above the buffet line. Customers tend to order a protein, two vegetables and a roll, so Luby’s has grouped certain combinations together, as you would see in a quick service restaurant. The company does not serve alchoholic beverages, but Luby’s is known for its iced tea, especially its sweet tea.

Prices for a meal at Luby’s (average check) range from $7-$10. Customers tend to go to Luby’s about 2-3 times a week, more than the typical quick service or casual dining restaurant. Customers are both white collar and blue collar.

Managers are put through a training program. The program is taken either online or on-site. Managers focus on promoting internally by elevating crew members to general manager.