Wednesday, December 31, 2008

Reality Check is going tropical--if it goes at all

I may be unemployed, but I'm still going on vacation. Restaurant Reality Check is heading south to find warmth, beach front and (hopefully) authentic Caribbean cuisine. I hope to write about that experience here, but could be thwarted by technology issues, scolding fellow travelers and, most threatening of all, acute insobriety. So if the postings thin out until Jan. 11, or cease altogether until then, don't fear a kidnapping.

However, my first post will consist of words cut from other postings and pasted together into a note.

Happy New Year.

Tuesday, December 30, 2008

A good Starbucks rant, completely wasted

I was set to unload on Starbucks for embracing tea as its next big thing when a Jimmy Stewart moment took hold. My inner O’Reilly wanted to fume, “A coffee company doing tea? C’mon, folks, this is the dumbest thing I’ve ever heard! Why not just roll a keg of Budweiser behind the counter?” But the more I considered how McDonald’s and Dunkin’ Donuts kicked Starbucks in the beans by adding comparable brews, the more I wanted to say with a charming stutter, “Now wait a gosh-darned minute here. I love tea! Everyone loves tea! And now you won’t be able to get the really good stuff anywhere but Starbucks. It’s a brilliant idea, I tell ya!”

Which, of course, leads to two surprising conclusions: Jimmy Steward could’ve stomped Bill O’Reilly’s any time, even if Sean Hannity joined in. And the next major point of differentiation for a chain synonymous with coffee may indeed be exotic tea-based drinks like infusions and tea lattes. The concoctions sound far too complex for quick-service places to whip out along with chicken nuggets and snack wraps.

Ah, you counter, wasn’t that once said about lattes and other coffee-based craft drinks? And doesn’t even the local bowling alley now offer cappuccinos?

Sure, anyone can prepare those drinks today. All you do is push the button on the automated dispenser. But would you want a Vanilla Rooibus Latte or a Berry Chai Infusion coming out of an idiot-proofed machine, three steps from a deep fryer? It’s like grabbing a martini in a plastic bottle from a C-store’s cooler. The experience is just different.

Vanilla Rooibus, for the record, is a hot combination of caffeine-free “botanicals,” including rooibus, an exotic red tea that’s only grown in a pocket of Africa. When the world’s ready for McRooibus, Starbucks would probably need to embrace the next drink line.

The Berry Chai Infusion consists of aronia berry and black currant juices blended with the now-familiar flavors of chai.

There’s also an Apple Chai Infusion, a Black Tea Latte, and a London Fog Latte, incorporating lavender and bergamot, a pear-shaped Asian citrus fruit.

Are drinks of that complexity and ambition really going to show up soon on the menu boards of Jack in the Box, 7-Eleven or McDonald’s?

Of course, it’s an assumption that Starbucks can cultivate a market for those beverages.

On a recent visit to my local unit, I was the fourth person in a row to order a chai latte. I’ll bet most people never heard of chai until they saw it listed on a Starbucks board. Now I can choose from four varieties in my neighborhood King Kullen (go for Good Earth or Stash, by the way).

So I’m betting that, yes, it can.

Monday, December 29, 2008

Forget the auto bailout. Send Pizza Hut instead.

Yum! Brands should do the patriotic thing and lend Pizza Hut’s menu development team to the Big Three auto companies. The wheezing giants desperately need innovation to make their products competitive again. Pizza Hut, as Sunday’s football broadcasts revealed, has nailed that ability to meet mainstream America’s preferences, before the public even senses the desire. The decades-old concept has transformed itself from a commodity seller into a consumer products business that just happens to use bargain-priced food as its means of satisfying a need.

The most recent bit of evidence is the pie that was advertised here in New York during the Jets’ meltdown Sunday against the Dolphins. A commercial showed a pleasant, brick-walled little pizza-and-pasta-type eatery, like you’d find in the artsy section of any city. The proprietress of Elizabeth’s, as I think the place was named, is offering samples of her newest item, a pizza made with all-natural ingredients. Customers rave about it.

Then Elizabeth reveals she didn’t make the pie. The camera cuts to a Pizza Hut delivery guy, carrying a stack of the chain’s new pizza, The Natural.

Okay, maybe the spot was a bit hokey, and a complete rip-off of the old Folgers Coffee commercial (persons of a younger vintage could probably find it on YouTube, mixed in with videos of jousts, barbershop quartets and other cultural phenomenon of that pre-historic time). But it got across the message that this was a pizza made with a whole-wheat crust, additive-free sauce and cheese, and “all-natural” pepperoni and sausage (i.e., both are free of nitrates, nitrites or other nasty-sounding preservatives). The message stressed that the sauce was made from vine-ripened tomatoes without any added sugar. It’s a convincing bid for validity.

Clearly, this is not your Folgers drinker’s pizza.

There’s nothing about Pizza Hut being the first mega-sized restaurant chain to offer an all-natural product. After all, who cares about that sort of huckster-ism.

And it wasn’t about price, though the spot did indicate the pies sell for $11.99 (a “rustic” version, with whole tomato slices) and $9.99 (the basic pie).

No, the hook is clearly the all-natural aspect. As that sensibility has gone mainstream, convincing consumers that “natural” is better, many would-be converts were likely frustrated by the lack of access to reasonably priced examples. They likely wouldn’t have found an all-natural pizza in the corner joint. And places that carried such a pie may have come across as too nuts-and-berry.

I’m betting Pizza Hut has found a true sweet spot. Of course, that’s easy to say when you consider all the year-end predictions that health and wholesomeness will have a profound impact on restaurant menus in 2009. The National Restaurant Association, for instance, cited “nutrition/health” as Number 11 on its list of hot trends for the new year.

The Natural, which has been in test for eons, follows the rollout earlier in the year of the Tuscani line of takeout and delivery pastas, in my estimation the restaurant industry’s best new product of 2009. In the latest estimate by Yum executives, the $12.99 trays of pasta, each of which feeds four, have generated in excess of $100 million in sales since their introduction in April.

That adeptness at reading the market may be what the auto industry needs to come up with the next Mustang, SUV or small pickup.

Sunday, December 28, 2008

A genetically altered Cheesecake Factory?

Cheesecake Factory opened the first of its new downsized restaurants this month, a departure from the pricey cathedrals that’ve been a hallmark of the concept since its earliest days. Now it has a smaller, less-expensive prototype, just like everyone else in casual dining.

That concession to the times follows the addition of a menu section consisting solely of bargains, an asterisk to the chain’s positioning as a place of indulgence, as its luscious cakes or huge portions attest. Now deal hunters will find the same sort of values they might seek on other Friday or Saturday nights at Red Lobster, McCormick & Schmick’s, Outback or Mortons.

Point by point, the once high-flying chain is addressing the issues that have tempered its phenomenal financial success. But, in the process, is it engineering its way into one of casual dining’s biggest problems? Is it sacrificing dramatic points of differentiation to become like everyone else in the pack?

If I’m typical of Cheesecake’s fan base, patrons go there because the experience is over-the-top, from the 200-item menu to the portions, the unusual choices (Navajo Sandwich, anyone?) and the dramatic settings (insider’s note: Look for a sky scene in your local unit, a concession to the religious orientation of longtime leader David Overton). It’s not an overstatement to say it provides a sense of awe.

But awe doesn’t sell in this tight-walleted environment. Bargains, economy and accessibility are today’s stock in trade. Still, by curbing what’s been in its DNA to embrace those head-turning qualities, is Cheesecake thinking merely for the short term? Certainly this economic situation is a crisis, and hence by definition a passing pain.

I’ll be the first to admit that it’s easy for me to second guess one of the industry’s most successful executive teams. I don’t have investors, executives, landlords and employees looking to me to pull the concept out of the doldrums.

But I hope Cheesecake doesn’t sacrifice the counter-intuitiveness that made that brand a stellar success. When everyone was going for streamlined menus, it maintained a tome of fare. When nods to healthfulness were the order of the day, it continued to serve selections that could have fed whole Caribbean islands. When competitors shotgunned units into the market like space invaders focusing on street corners and malls, it grew slowly and with painstaking selection of sites (to the best of my recollection, it’s never had to close a restaurant).

It needs to think in evolutionary terms—how to tailor the brand to the times. Merely co-opting what’s worked for other casual-dining concepts is de-evolution of the worst kind. I hope the folks in Calabasas Hills are careful about how they navigate these perilous times. Otherwise, they’ll just be jumping the shark.

Saturday, December 27, 2008

And he could collect unemployment, too

Russ Owens may have lost one of the most coveted jobs in the business, but he probably had a nice holiday nonetheless. After announcing in late November that he would step down as president of the Pei Wei Asian Diner fast-casual chain, Owens and concept parent P.F. Chang’s agreed 10 days ago the longtime industry veteran would collect $800,000 in severance for his “resignation.”

The money is being paid in one lump sum. In addition, all stock options or other equity awards were vested immediately, according to the agreement, which was detailed in an SEC document filed on Christmas Eve.

In exchange, Owens agreed not to sue Chang’s, reveal its trade secrets or take a position that puts him in competition with Pei Wei. That could be a breeze, given that the concept’s direct competition is usually characterized as local Chinese restaurants.

Pei Wei is widely regarded as one of the more promising concepts to come out of the fast-casual boom in the first half of the decade. More recently it’s been battered by the same sales slowdown that has stymied chains at the higher end of their respective segments' price range.

Because Pei Wei is more of an everyday kind of place than a special-occasion option, some of us have viewed its sales problems as a reflection of the public’s shift back to cooking at home.

But at least Owens will have a fair amount of change to spend on dining out.

Wednesday, December 24, 2008

Restaurateurs couldn't say 'no' to Madoff

The alleged Ponzi scheme run by New York investor Bernard Madoff counted at least two restaurateurs among its pigeons. The Los Angeles Times reported today that La Brea Bakery founder Nancy Silverton invested millions in what investors believe was a scam of historic proportions. The exact amount she lost was not revealed by Silverton, now a co-owner with Mario Batali of Hollywood’s Pizzeria Mozza and Osteria Mozza hotspots. But figures cited in the Times web posting suggest the amount exceeded $5 million.

Silverton told the Times she was warned by her father not to park all that dough with Madoff, but she spurned the advice.

The revelation follows a report yesterday by Bloomberg News that a Florida restaurateur was also stung—and may be taken a second time. The story noted that the restaurateur asked to remain anonymous in hopes of recovering the $1.5 million that is still held by Madoff’s firm. It also raised the possibility that the restaurateur will have to return $500,000 he withdrew as profits from the account and used as a mortgage before the scandal broke.

The story quotes the restaurateur as saying he would rather go to jail than give back the money, arguing that he didn’t know Madoff might’ve been running a scam.

Even restaurants that put no money in Madoff’s hands may be a bit poorer for the purported scam being busted. Reports indicate that Madoff enjoyed high-end restaurants like The Palm, and was pleasant to the staff as well as free-spending.

Tuesday, December 23, 2008

More (sea) changes at the top

This morning brought the news that Greg Burns, a leader of the O’Charley’s dinnerhouse chain for 25 years, will step down early next year as CEO and chairman. It’s the latest indication that a changing of the guard is quietly taking place in the restaurant industry as executives who spent a lifetime in the business surrender the helm to newer and presumably more mainstream talent.

O’Charley’s said it hasn’t yet chosen Burns’ successor. But look at some of the replacements that have been named for exiting long-timers. Nigel Travis is stepping into the CEO’s job at Dunkin’ Donuts’ parent company with deep experience in internet sales, international business and retail marketing. The internet wasn’t even known when the standout he’s succeeding, Jon Luther, was starting his career.

Wendy’s had a long tradition of putting operational specialists in the corner office, starting with Dave Thomas, continuing through the legendary Jim Near and the highly respected Gordon Teeter, and then ending with Jack Schussler. Leading the company since its acquisition by Arby’s owner is Roland Smith, a veteran of the golf, bowling, soft drink and pharmaceutical industries. He’s a West Point grad.

Not all of the long-timers exiting top posts are being followed by newcomers with such extensive resumes. Dick Frank, for example, is surrendering his leadership of Chuck E. Cheese to Mike Magusiak, a protégée and longtime exec of the pizza-and-games chain. But Magusiak has a background in finance, having served as CFO. Frank was hailed for his operational and marketing know-how.

And not all the replacements have been named yet. Big Boy, for instance, said it’s still searching for a replacement for Tony Michaels, its longtime leader and an even longer-time veteran of the restaurant industry, including stints with Marriott.

The list of other industry greybeards to step down in recent months include Russ Owens, the casual-dining vet who had been leading P.F. Chang’s Pei Wei Asian Diner fast-casual operation; and Paul Motenko and Jerry Hennessey, the co-founders of BJ’s, who have left the board of that seemingly recession-resistant frontrunner to rev up for a new venture.

I’d be remiss if I didn’t note the counter-current of long-timers getting back into the business. Yesterday, for instance, the new owners of Romano’s Macaroni Grill released the stunning news that the chain would now be led by Olive Garden vet Brad Blum, a brilliant move on the buyer’s part. And Ned Lidvall, perhaps best known for his leadership of Rock Bottom Breweries, will now be leading Friendly’s.

Monday, December 22, 2008

Very naughty ones among the nice

Coal prices will likely spike tomorrow as the market reflects several notable additions to Santa’s Naughty list. As any flying reindeer would tell you, the coal penalty is likely to be doubled because these infractions involve restaurants, and He Who Makes the List, a.k.a. the Chimney Clogger, is clearly a fan. And who wouldn’t be outraged by activities like these?

THE BIG CHECK SCAM: Businesses in Canada are being warned about a con that grifters tried to pull on a Winnipeg pizzeria, with similar stings apparently attempted in Toronto. According to the press coverage, the louts in Winnipeg almost succeeded. They contacted Gondola Pizza and said they needed $4,400 worth of pizza for a multi-day meeting of students. Then, two days before the deliveries were scheduled to start, the “customer” called back and said only half the original order would be required because of cancellations. Would the restaurant mind refunding half the payment ASAP?

Of course, the $4,400 check was no good. The crooks were betting that they could get the $2,200 refund before the place heard from its bank that the bigger check was bogus. It's another indication that restaurant scams are as common as snowflakes this holiday season.

Santa’s sentence: At least a ton of anthracite.

A THUMB IN WASHINGTON RESTAURATEURS' EYES: Operators in Snohomish County, Wash., caught a slush ball in sensitive parts when they recently opened their annual bills from the country health department. According to HeraldNet, a local news website, the department had raised the fee to $700, or double the charge for 2007. Places that didn’t remit payment within three weeks would pay double the charge, according to the news report.

Clearly someone forgot to inform the country health department that restaurants are fighting for their survival in the current economic environment. How can they absorb a hit like that? And, according to the coverage, it came as a complete surprise.

Santa’s sentence: The bituminous output of western Pennsylvania.

WISHFUL GREEN THINKING: News broke this morning of another ecologically minded initiative from Chipotle Mexican Grill, the burrito chain with a reputation of being far greener than the industry norm. This time around, according to the reports, the concept was switching to “sustainable” cutlery, or disposables that bio-degrade, starting with a restaurant in Millbrae, Calif. The only problem: It wasn’t true.

A supplier issued the press release without Chipotle’s involvement, approval or concurrence with the assertions made, according to the restaurant chain. It released a statement several hours later refuting the supplier’s announcement, explaining that it does indeed use compostable knives, forks and spoons at a Millbrae restaurant. But, it said, those eco-friendly disposables have to be used there because of a local ordinance. The chain stressed that it had no intention of switching to the degradable utensils at the other 799 restaurants in the system.

No doubt the home office was a little touchy because investors have been warily watching the one-time Wall Street sweetheart. Like every operator, it’s under intense demand to keep costs low. And bio-degradable disposables can cost anywhere from 10 to 40% more than the conventional type, according to suppliers.

Santa’s sentence: Three turns of a windmill blade. (Hey, the supplier is a green company. It’s probably allergic to coal.)

Sunday, December 21, 2008

Take that, Outback

The LongHorn steakhouse chain is responding to Outback’s head-turner of a $9.99 sirloin dinner with a new steak bargain of its own. Executives of parent company Darden Restaurants said Friday that the chain is about to start pushing “a new signature steak dish” priced at under $10.

The officials didn’t reveal what type or sized steak would be offered at $9.99, but said the promotional item would be rolled out in January and backed by a new commercial. Outback's $9.99 deal consists of a complete meal centered around a 6-ounce steak.

Meanwhile, Darden's main suits told investors, LongHorn is testing a new ad campaign in 30 markets, with an introduction target of March.

LongHorn, which the company acquired in its 2007 purchase of Rare Hospitality, is the weakest of Darden’s three major brands. Olive Garden and Red Lobster are still posting positive comparable-store sales, a monumental feat in the current environment. The gains may be slight (each is under 1%), but reason to have one more glass of Chablis during LobsterFest when compared to the results for LongHorn’s last quarter. The chain’s comps fell 5.7%, while net sales increased only 2.4%, even with the opening of 19 additional outlets.

The biggest of Darden's so-called specialty brands are also feeling the recession, with significant comp declines posted for Capital Grille and Bahama Breeze. It did not break out results for Seasons 52.

Saturday, December 20, 2008

BK sends Twitter atwitter

Twitter is still new enough to prompt a commemoration from its hyper-growing fan base of every first-ever use for the social network. And yesterday brought just such a milestone: The first use of the system for a legal action, though it's not clear if the cease-and-desist communication was genuine or a viral marketing ploy. Which is why it should come as no surprise that Burger King is involved.

For those of you who've not been converted (yet), Twitter is in essence a micro version of blogging. Members of the network post 140-character reports on what they're doing, be it getting ready for bed, pushing a new product, assessing Leno's monologue, looking for help on an illness, trying to find a job, or publishing a new full-sized blog installment elsewhere (a hyperlink can be part of those 140 characters). You're known by your Twitter name, and a lot of thinking often goes into the selection of that handle.

Depending on what you believe, one Twitter-ite made the mistake of coming up with whoppervirgin, which is also the name BK has given to the outlanders who were asked to participate in a taste test between the Whopper and the Big Mac. The taste-testers were chosen from places like Roumania, Thailand and Greenland because they'd never eaten either sandwich before--or, in at least some instances, a hamburger of any sort. Now they're stars of BK's new marketing campaign.

The social network is all, um, atwitter because BK supposedly sent a cease-and-desist communique to whoppervirgin, claiming it owned the tradename. A cease-and-desist letter is usually somewhat stiff and formal, written over an attorney's name. BK used Twitter's 140-character format. Indeed, here's the message in full: "@whoppervirgins CEASE AND DESIST. UNAUTHORIZED USE OF TRADEMARK. What is your motivation by the way...?" It was sent over BK's Twitter name, TheBKlounge.

Many Twitter fanatics, myself included, didn't even know of TheBKlounge until the matter was tweeted and retweeted (Twitter-ese for posted and reposted, respectively). Now I, and presumably plenty of other community members, are now "following" TheBKlounge, or receiving everything it tweets. Not a bad way to instantly expand your presence on a communications system that's growing exponentially.

So was there a whoppervirgin? Consider a few of its posts: "I hate soggy buns." "Got some ketchup seepage. Wondering if I need a doctor." "Got sesame seeds stuck in oddest places." "Marinating in my own juices."

What do you think?

Friday, December 19, 2008

National Restaurant Association's 2009 business forecast - live

I'm writing this as I watch the live internet broadcast of the National Restaurant Association's Industry Forecast for 2009. If you're not familiar with the association, this is a high point of its year. The group's annual sales prediction is widely regarded as the best prognostication of what restaurateurs can expect in the year ahead. This year, interest is particularly high because an industry that took it in the bread basket in 2008 is wondering what it can expect in the 12 months ahead. Can it hope for any glimmers of recovery? Or will there be more darkness before the dawn?

Here's what the experts have to say. It's best to read this from the bottom up.

11:55
Did I miss the projection of restaurant openings for 2009? That's a key metric. If the net tally of restaurants drop, and fewer places are splitting what consumers spend in the aggregate on dining out, conditions could actually be better even if that overall sales figure declines. It's a matter of how much the universe retracts.

11:47
John Gay, the association's top lobbyist, has taken the podium to offer his preview of what the industry can expect from the Obama Administration.

"The initial reviews are quite positive," said Gay, who indicated that the President-elect's advisors had sought the NRA's input on small-business matters.

The economy, Gay continued, "will certainly be the Number One priority" for Washington.

"The restaurant industry will be working with Congress and the Administration as [the recover plan] takes focus, to put money in the hands in consumers wherever it can," he said.

Overall, he observed, Obama's agenda "is a mixed list" for the restaurant industry.

The positives:

--Obama is looking at a zero capital-gains tax for small businesses.

--He's also looking at a tax incentive to create jobs.

--The Administration might seek earlier mailings of tax refund checks, which would put more money in consumers' hands.

--Included in any stimulus bill could be an increase in spending for tourism promotion.

--One of the matters that could come under scrutiny are "interchange fees," or the charges restaurateurs and other merchants pay on credit card functions.

The negatives possibilities:

--Higher minimum wage.

--Paid sick leave.

--Tax increases, which, though aimed at wealthy individuals, could also apply to small business people, given the possible thresholds.

--Energy or food policies that could affect wholesale food prices.

--Problems in pushing through federal immigration reform, which could lead to further crackdowns on the state level.

I'm surprised he didn't mention card check?? Isn't that the real danger for the business? Is this a sign that maybe Obama is reconsidering that pro-labor/decidedly anti-restaurant legislation?

11:35
Riehle just made an interesting observation: Younger generations are not only seeking different menu options, but changes in restaurant operations as well. He cited the example of touch-screen-style menus, an ordering set-up that two out of three young people said they'd use. Also, he noted that a younger generation would be more accepting of text-message alerts of specials. Indeed, he seemed to suggest, they might expect it.

He noted that 75% of all consumers, regardless of age, would visit restaurants more if the places offered discounts on their slowest nights. Hello, Monday specials.

11:30
"Nearly three out of 10 adults have gone online to search for information" about the healthfulness of menu offerings, according to Riehle. That's powerful ammunition in the industry's battle to convince lawmakers that information doesn't have to be posted on menus and menu boards to provide consumers with data to make healthful choices.

Whew: "Food safety remains a top concern of restaurant operators," Riehle observed.

Despite the downturn, "nine out of 10 restaurateurs remain involved with charitable activities," he noted.

11:25
Now Riehle is giving the employment figures: Five consecutive months of declining industry employment. I never thought I'd live to see the day when restaurant employment would decline. Nothing has been a more dramatic indication of just how difficult conditions are right now for the business.

Yet, looking longer term, "there's still a labor shortage looming for the industry," Riehle said. Earlier, he noted that finding personnel has dropped precipitously on the current list of restaurateurs' concerns.

11:20
Now Riehle is looking at specific segments of the business. As expected, he notes that the outlook for full-service restaurants is particularly dismaying, with table service places expected to be walloped with a 2.5% drop in real sales.

Some good news, sort of: "There continues to be this build-up of consumers who do not use restaurants as much as they would like." That's important, he explained, because they'll be coming back once they have the cash in their wallets to do so.

"it's a very compelling number to monitor," he said.

Youch! He just cited a likely 4.4% decline in real sales for the "snack and non-alcoholic drink" segment, which is statistical jargon for the market space that Starbucks occupies. Hand Howard Schultz some tissues, quick. And keep him away from the ledge.

11:16
Riehle just observed that the nation's gross domestic product will decrease by a "hefty" 4.9% during the current quarter. Wow.

He said it's the second of what will be four consecutive quarters of GDP, the first time that's happened since the nation started to report the metric in 1947.

Riehle flashed some graphics that proved consumers were greatly dependent on home equity as a source of disposable dollars. As prices collapsed, he explained, spending tanked.

"This year we're forecasting wholesale food prices to reach a record 8%." That's a Godzilla-like figure. Next year, Riehle said, the rate will likely decelerate to 3%. Restaurant bookkeepers everywhere are likely exchanging high fives.

11:10
Dawn Sweeney, who opened the media event, set the scene with this comment: "Restaurateurs are gearing up for a year where every move matters."

She's passed the microphone to Hudson Riehle, the NRA's head of research. His job is to look deeper into the factors that yielded the fairly bleak forecast reported in the entry below.

Riehle: The industry's real growth will be negative, and "it is substantially more negative than it has been over any of the other recessionary periods during the last four decades." Ugh.

Restaurant industry's 2009 outlook: grim

The National Restaurant Association has just released its 2009 forecast for the nation’s biggest small business, and the outlook is far from good: Transactions will decrease by 1%, though a considerable 3.5% hike in menu prices will inflate dollar intake to a sales gain of 2.5%. It’s the first time in my 24 years of covering the business that I can recall the association forecasting a decline in constant or “real” sales (the absolute change minus the influence of pricing—the measure hardcore number geeks regard as the most meaningful gauge of business activity).

The decline will come from a downturn at full-service restaurants, whose real sales are projected to drop by 2.5%, according to the NRA’s figures. Fast-food places, in contrast, will see real growth of .5%. In any other time, that slightly positive latter figure would have the industry wringing its hands. But in this environment, it’ll probably be met with considerable relief. Flat is the new up.

Of course, those figures have to be kept in perspective. That scant real increase for fast-food places translates into a nominal sales rise of $163.8 billion, or far more than many familiar industries generate in total.

And restaurants will continue to take in more than $1.5 billion a day in 2009, if the NRA forecast is on target.

Not surprisingly, the association found in its research that about one-third of American consumers aren't dining out as much as they'd like, and 35% aren't ordering takeout or delivery as much as they'd like. That's good news: When disposable income starts climbing again, those frustrated consumers may b marching through the industry's front doors again.

For more analysis, follow my live reports on the NRA’s media broadcast of the forecast’s relief, starting now.

Thursday, December 18, 2008

Get a glimpse of the future, live.

Tomorrow I'll be live-blogging the National Restaurant Association's forecast of industry sales and trends and what restaurateurs can expect from changes in the political scene. Tune in at 11 a.m. E.S.T. or follow the updates on Twitter @ PeterRomeo.

Sign of the times: Ruby Tuesday to shut 70 stores

The news out of casual dining hasn't been good, but today could be a preview of how bad it may still get: Ruby Tuesday, once a pacesetter of the segment, said it will take a write-off to close about one-tenth of company stores, or 70 units in total. Another 35 to 40 sites are for sale, but it was not clear if those locations are being peddled to franchisees or pruned altogether. The announcement called them "surplus properties."

Forty stores will be shuttered during the quarter that ends in February, and the remaining 30 will be divested "over the next several years," according to the statement.

In addition, the company said it'll take a write-off of $19 million for the quarter that just ended to cover impairment to goodwill. In plain English, the company's intangible worth just isn't as high priced as it was, and it's taking the hit now. To put it in perspective, Ruby posted a net income of $285,000 for the quarter ended Sept. 2--before two months that were widely described as among the worst the restaurant industry has known.

Ruby Tuesday operates about 700 restaurants and franchises about 230 more.

Scams, cons and short-changings

‘Tis the season to be scamming, or so the industry grapevine suggests. The holidays have generated considerable online buzz about restaurants, employees or customers being preyed upon by the unscrupulous, including some in the business themselves.

Included is something known as “tip-jacking,” where servers sweeten the tips patrons put on credit cards. A “1” may be doctored into a “4” or “7,” for instance. Or a charged tip is added to the house copy of a charge receipt for a patron who left a cash gratuity on the table. In other instances, a larger amount is merely written over what’s been listed on the tips line, as if the customer changed his or her mind.

Because the amounts are so small, the patron seldom notices before they sign. Or, if an amount is added to a tip line that’s left empty, the charged person doesn’t think to reconcile the customer copy of the receipt with what’s on their monthly charge-card bill.

In some locals, authorities are advising restaurant guests to avoid being tip-jacked by always paying in cash and either drawing a line or writing “CASH” on the tip line of a charge slip.

Meanwhile, even restaurant owners and chefs are apparently trying to pull off a bait-and-switch con. The Feedbag, for instance, reported last week that New York City is rife with bogus menu come-ons for a whole chicken. Order the bird, says the online “gastronomic gazette,” and you might not get the legs, wings and thighs. “Whole,” apparently, implies an asterisk in the minds of some chefs.

Similarly, San Francisco Chronicle restaurant critic Michael Bauer recently responded on his blog to a reader’s complaint about wine pours in the city. The reader had noticed that many places appeared to be skimping on the portions but argued that the glasses merely made the amount seem smaller. Bauer’s response:

Maybe I'll start taking a six-ounce container of water with me to various restaurants. I'll note the pour line on the glass and then when I've finished the wine, I'll pour in the water to see how much wine I actually drank. It might make for a good story down the road.

Yesterday, Bauer cited an undeniable scam in which he had unwittingly played a part. He had recently reported that Mark Denham, the chef at a local Spanish restaurant named Laiola, had left the job. Apparently someone saw the report and cooked up a way to exploit the situation. The conman called Laiola, pretended to be Denham, and concocted a story about needing $713 as a short-term loan to get himself out of a pickle relating to his car. The con artist did the same with other places where Denham had worked, taking the list from Bauer’s report.

At one of the places, an acquaintance of Denham’s had suspicions and called the chef before any money was wired. Denham blew the caller’s sting, and Bauer reported it all in his blog, apparently for the protection of other restaurateurs.

Tuesday, December 16, 2008

BK takes a Shot on sliders

Burger King’s sliders have arrived. A midtown Manhattan unit sports a sign today announcing the addition of BK Burger Shots, two flame-broiled mini-burgers priced at a mere $1.49 for the pair. Other markets are already airing commercials for the burger-ettes, available with or without cheese, according to blog posts.

A rollout of sliders had been expected since late spring by those who care about such things. In May, BK generated considerable buzz in the United Kingdom by adding a clever take-off on the slider, a uniquely American product. The Angus 6 Pack consisted of an oversized, scalloped-edged burger patty served on a similarly misshapen roll. The patty was actually six connected sliders, or miniature burgers, and the roll was similarly a six-in-one. A customer tore the burger and bun into six individual sliders.

The Burger Shots are much different. Indeed, they look more like Hardee’s Little Thickburgers, a downsized version of that chain’s belly whoppers, than a true slider like White Castle’s bite-sized mini’s (my usual order: 10).

Their larger size may be the result of operational considerations. As I said in a blog written while I was still gainfully employed, BK tried a slider during the 1980s called the Burger Buddy. The little patties proved to be a production nightmare because they would slip through the slats of the conveyor belt inside BK’s charbroiler.

BK has yet to make a formal announcement of the Burger Shots, which were identified in the New York store as a limited-time product. But why should that be a surprise? Half of the things it does are introduced through stealth marketing campaigns.

Monday, December 15, 2008

Smell like a Whopper this New Year's Eve

Never again will I have to dab Whopper grease behind each ear. Now, thanks to whatever they've put in the water at Burger King headquarters, I can just stop by the outlets of a New York cosmetic-store chain and pick up a container of Flame, the Whopper-scented new body spray from the folks who gave us The King.

Yes, Burger King has launched yet another viral campaign, and this might be its weirdest of all. A new BK website uses a Barry White-like voice, suggestive wording and a pretty nifty interactive feature to push Flame, which I took at first to be a goof. But it's really, truly a scent that smells like the Whopper, and it's really, truly for sale at Ricky's, a New York-area emporium that's a favorite of young women. But don't loose heart if you're located somewhere else: The site will take you to Ricky's website, where you'll be able to buy Flame for a mere $3.99 a container.

This is going to drive my bitches crazy. And I mean that literally. Wait until my dogs get a whiff of this.

Friday, December 12, 2008

Reading the ink blots of recent developments

Here's a blog entry I posted on Fohboh, a social network for members of the restaurant industry (Fohboh stands for front of the house/back of the house):

I seem to be out of sync with fellow Fohboh-ers on an issue that threads its way through many of the blogs and discussions here. Try as I might to catch the economic optimism shown by my community mates, the gauges I’m reading on the industry’s near-term prospects tend to fluctuate between sobering and scary. But read on, because this is actually a positive post.

First, the harsh realities. Consider some of the this week’s news stories.

DineEquity, the parent of Applebee’s and IHOP, announced that it’ll suspend dividends for the foreseeable future to pay down the debt weighing profoundly on the company. Indeed, the industrial-sized IOU is proving more of a burden than anticipated. DineEquity planned to pay back what it borrowed to buy Applebee’s by selling company Applebee’s units to franchisees. But the licensees can’t get their hands on capital in the current credit freeze. There really hasn’t been a Plan B.

The news about dividends followed last week’s revelation that a big and powerful DineEquity shareholder, Southeastern Asset Management, is planning to take a hand in the company’s operation. Surprisingly, the coverage provided little information about SAM, which is actually an investment vehicle for a larger financial concern, Longleaf Partners Funds, which in turn is headed by a junior Warren Buffett named Mason Hawkins. Longleaf has or held significant investments in such other restaurant companies as Yum! Brands, Marrriott, and Wendy’s/Arby’s, and was a major shareholder of Dell Computer.

Hawkins, a guy who could pick up the tab if he lunched with Buffett or Bill Gates, is regarded as a very astute guy. And the investors in his funds include such business titans as Michael Dell, he of Dell Computer fame. Indeed, some insiders say Michael Dell has taken more than a passive interest in the workings of Applebee’s. The business has apparently piqued his curiosity.

Which brings us to some of the positives. Yeah, suspending dividends is an extraordinary move. But the action megaphones the message that DineEquity isn’t operating under a passive, business-as-usual mindset. And if it should lapse into inertia, investors who view it as a potential prize will ensure any lethargy is shaken off pronto. And they’ve shown that they know how to right or run a business. A kingpin of casual may soon be revived, which could help in elevating that whole wheezing sector.

There’s still plenty of bad news seeping out of that segment. On Tuesday, for instance, the private equity company that owns the Del Frisco and Sullivan’s steakhouse chains quietly shelved its plan to sell the operation through an initial public stock offering. The significance extends beyond Del Frisco, since the private-equity buying binge of 2005 and ’06 has left many private companies with restaurant companies they planned to spin off in a year or two. What are they going to do with those strained assets if individual buyers can’t get the financing, and the stock market is providing an unfeasible option? And while they’re waiting for conditions to improve, the private-equity firms have to run their holdings. They’d likely admit they’re asset portfolio managers, not restaurant operators.

Yet here’s some positive news: A financial analyst said he was told by Brinker Internatiional executives that the casual-dining giant still expects to sell its Romano’s Macaroni Grill chain by Jan. 1. Somewhere out there is enough financing to fund the $131.5-million deal.

The bad news: Brinker said it will cut 40 more headquarters positions, according to a Dallas news report.

And the even worse news: The company still faces a credit review by Moody’s, the debt-rating service, that could spell trouble for the company.

So I’m puzzled by the sunny perspective of others within the community. Sure, it’s not time to crawl out on the ledge. But these are extraordinarily dire conditions—hands-down the worst I’ve seen in 24 years of covering the business.

Nonetheless, I’m going to leave you with a positive recent story that virtually slipped by the industry: Ruby’s Diner, the well-regarded diner concept on the West Coast, broke the industry’s long-running hiatus from launching new concepts. The chain fired up the grills this week for a new, upscale venture called Ruby’s MotoDiner, whose checks are likely to top the typical tab at its parent concept by 20 percent, according to blogger extraordinaire Nancy Luna.

You don’t launch a new concept if Armageddon is ‘round the corner. Why bother having the menus printed?

But between now and the first bar of “Happy Times are Here Again,” we’ve got some tough slogging.


Thursday, December 11, 2008

The Blagojevich-foodservice connection

With all the news pouring out of Illinois about Gov. Blagojevich’s eBay approach to filling Barack Obama’s Senate seat, you may have missed the connection to the restaurant industry. Among the names that apparently came up in secretly recorded conversations was Service Employees International Union, the new-age labor organization that’s hell-bent on organizing more foodservice workers.

The New York Times reported that the criminal complaint filed against Blagojevich cites the union as one of the parties the governor approached with a quid pro quo offer. The union works behind the scenes to get Blago a job as head of a union confederacy called Change to Win, and in exchange SEIU gets an ally in the Senate and help in pushing its agenda on Capitol Hill.

The revelations underscore what should be a big worry for the industry: The ally who would have been considered for the empty Senate seat, according to press reports, is Valerie Jarrett, who took herself out of contention because Obama wanted her as White House advisor. That choice has since been made, meaning a strongly pro-labor voice will be at the new President’s right hand.

Among the measures that will undoubtedly come out of Congress next year is the so-called card check law, which will take away secret balloting on whether or not a restaurant’s staff should allow a restaurant to represent it. The wrinkle in the Blago story underscores just how strong a threat the trade may be facing.

Wednesday, December 10, 2008

More momentum for an offal movement

The descriptor "acquired taste" might've been coined specifically for haggis, a Scottish staple that never caught on elsewhere, despite the obvious appeal of chopped-up sheep's innards. Or at least it hadn't until now. As the editor of epicurious.com pointed out yesterday in a blog entry, the organ-based, sausage-like dish seems to be drawing the forks of bargain hunters in England.

For the sake of full disclosure: I've never had haggis, and it's not the minced heart, lungs and liver that would likely put me off. I harbor a peculiar aversion to most root vegetables, including turnips, even if they are re-christened with the delightful name "neeps." And that's a key ingredient. It might take more than a wee dram of single malt to make me indulge.

A changing of the guard at Dunkin'

Now we know where Nigel Travis is going. Dunkin' Brands, the franchisor of Dunkin' Donuts and Baskin-Robbins, has just named the former Papa John's chief as CEO, replacing Jon Luther. The latter will continue with the company as executive chairman.

Papa John's said Thursday that Travis was leaving at the end of the month, but didn't say where he was heading.

During Travis' tenure, Papa John's distinguished itself in many ways. The chain's most remarkable achievement during the Travis Era was pushing its internet sales beyond the $1 billion market, a benchmark of sorts for the industry. More recently, the franchisor set a model for how the home office should help its franchisees during the downturn. Papa John's rolled back the price of cheese it sold to the licensees, and helped them out with loans.

Luther, the announcement noted, is at the traditional retirement age of 65. It's great that a man that capable and classy still be part of the industry.

My favorite Luther story (and, for the sake of full disclosure, I regard him as a friend): When Jon's son got married a few years back, he asked Jon Sr. to be his best man.

Tuesday, December 9, 2008

Will 2009 be an offal year?

I was surprised offal didn’t make the National Restaurant Association’s list of what chefs foresee as next year’s hot menu items. Surprised, but not exactly disappointed.

Certainly the trends suggest we’ll see more internal organs showing up on menus. Maybe not a McGizzard Happy Meal, but perhaps a beef liver steak or a calf’s heart, as famed New York butcher Stanley Lobel has predicted. He’s noted that innards have the two hallmarks of a winning menu item, whether you’re talking about French fries, fried chicken, or a pork shank David Burke popularized at Maloney & Porcelli: The food cost is low, and the cooking process is something the public isn’t likely to undertake at home. Offal is often tougher than muscle meat, and hence requires more prep and cook time, according to Lobel. Yet butchers often regard it as scrap, so it’s available in large quantities at bargain prices.

Benchmark Hospitality, an operator of upscale hotels, noted a few other positives in issuing its predictions of 2009’s likely buzz makers. “Bold flavors are sizzling hot right now, as is the willingness to experiment,” it explained. “American Chefs are just discovering that offal, when applied to a dish correctly, creates the 'Food of the Gods,’” as internal-organ meat was apparently known at one time to European chefs. The company picked the embrace of offal dishes as its Number Three culinary trend for next year.

My own attitude toward edible innards has always been mixed at best. Growing up, sautéed chicken hearts—served with a rich gravy on rice—ranked among my favorite dinners. But then there were those therapy-ensuring days when my parents indulged in calf’s brains, served whole in a soup bowl. The dinner table was just one mad scientist away from becoming “B” horror movie set, where a wire basket would go over one set of brains, another over my head, and a huge electronic switch would be thrown to commence the transfer.

I’ve not had much trouble with offal since, though I did falter on the first occasion I was served marrow. A chunk of bone was presented upright on a plate, prompting me to look for a beloved golden retriever we’d feed serially in some arcane Old English ritual. But the tiny fork next to it provided the telling clue. The delicacy wasn’t exactly a white-truffles pizza, and I’m not sure it even technically counts as offal, but I’m at peace with it.

There are some dishes made with animals’ internal organs that I’m dying to try. Acquaintances who’ve tried chittlings swoon when they recall the experience, which appears to be a rare one indeed. I’ve been sternly warned never to try a frozen version, and the real deal—the delicate meat inside a pig’s intestines, served fresh—apparently requires too much labor to be found often in restaurants or homes today.

But other types of offal? It’s not that I’m against them. But many of the other foods predicted to surge in popularity next year are far likelier to make me a convert. Peruvian food, for instance, and a class of drinks that’s been cited again and again in recent days as a Next Big Thing, albeit with different labels. The best one seems to be “green drinks,” or libations featuring organic and less-refined ingredients, like cane sugar.

Thanks to Laura Hber of Croc’s 19th Street Bistro in Virginia Beach, I’ve even signed up to learn of green-drink outings in New York City. I’ll be sure to let you know if organic hangovers have anything over the garden variety.

In the meantime, if you know of a New York restaurant that serves fresh chittlings, please let me know.

Friday's grabs for Obama's coattails

Subway might’ve scored a coup by signing Michael Phelps as a pitchman, but T.G.I. Friday’s figured out a way to ride the stardom of an even bigger celebrity, and for free: Barack Obama.

The granddaddy of casual dining gave a drum roll and cymbal smash today for what it’s trumpeting as the World’s Largest Inauguration Party. On Jan. 20, while the moving trucks are probably still unloading at the White House, all 930 of the worldwide chain’s units will be celebrating the change in Oval Office occupants, according to the announcement.

The best, of course, is reserved for outlets in the United States. People who can’t get to Washington for the all-night parties can raise a little whoopie throughout the month by popping in a Friday’s for a half-price appetizer—provided they spring for an entrée. “Now that’s cool!” effused Friday’s.

The pull is even stronger for members of the chain’s Give Me More Stripes frequent-guest program: A free appetizer of chips (red and white; what happened to the blue?) and dip (can you froth up Curacao?) if they stop by a unit on Jan. 20.

And anyone who takes part in the Inauguration Day festivities gets a free button. Movie fans will know that kind of Friday’s swag is sometimes known as “flair.”

But I shouldn’t pick on Friday’s. It’s actually a good idea for a promotion. Indeed, the attempt seems to be part of an emerging trend. Having trouble getting customers into your restaurants? Throw a party!

The Riese Organization, a Friday’s operator in Manhattan, plans to host one in its Tropic Zone restaurant on Monday to celebrate the repeal of Prohibition 75 years ago. The guests of honor at the Times Square soiree will be 400 bartenders, waitresses, chefs and DJs, according to the announcement.

That event comes fairly close on the heels of the New York City event on Dec. 1 to celebrate the anniversary of the Bloody Mary.

The way I see it, with careful calendar planning, I could stay drunk with a lampshade on my head until the restaurant industry rebounds.

Monday, December 8, 2008

Is BK trying to pull a fast one?

I've been trying to make sense of a story the Boston Herald ran last week about a change in the menus of Beantown's Burger King units. If I'm reading it correctly, the King should be thrown into the dungeon for a stretch, even if he is making a chump out of Red Sox fans. The article says the chain is telling shoppers they'll find new bargains on the menu, when in fact the "deals" are just the same old thing with a new label slapped on.

Last week, the story reports, the Boston-area restaurants rolled out the value menu the chain announced some time ago. "Problem is," writes Donna Goodison, "there's no value in the pricing."

The new value-sized soft drink, for instance, is what was formerly sold as the "small," at the same price, Goodison reports.

BK is sweetening its values in other ways, apparently. For instance, the story says what was sold as a medium drink is presented as the small, presumably at a lower price. That means the same for less.

It's surprising that the Home of the Whopper, one of fast-food's outstanding performers in recent years, would be so foolhardy as to risk alienating savvy customers at a time like this. Why dare to tarnish the crown?

Friday, December 5, 2008

Twice as many predictions of food and flavor trends

The value trend has apparently seeped into the Institute of Prognostication or wherever it is the crystal ball gazers congregate at this time of year to spit out forecast after forecast. The first sets of predictions to reach Restaurant Reality Check both disregarded the conventional list approach to cite two trends where one might’ve sufficed for each ranking in past years.

The McCormick spice company’s Flavor Forecast, for instance, predicts 2009’s Top 10 Flavor Pairings rather than merely the flavorings that will come into vogue. And Epicurious.com’s New Food Trends cleverly cites what’ll be out as well as in.

Here they are in their entirety.

From Epicurious.com:

1. Peruvian is the new Thai: You thought Peruvian cuisine was all about seviche, maybe? Guess again: Peru boasts culinary influences from Spanish, Basque, African, Cantonese, Japanese, Italian, French, and British immigrants. Pisco Sour, anyone?
2. Noodle Bars are the new sushi joints: With some seafood being suspect or overfished and raw fish prices high, noodles make complete sense. If there's no ramen, udon, or soba shop in your neck of the woods,there probably will be soon.
3. "Value" is the new "sustainable": These days, the economy dictates our cooking and shopping decisions. Bargains are in, no matter where they come from.
4. Ginger is the new mint: Move over, mojitos. Ginger beers and ginger cocktails (like the Ginger Rogers, Gin-Mule, and Ginger Smash) are bubbling up at places like the Violet Hour in Chicago, the Clock Bar in San Francisco, and Matsugen in New York.
5. Smoking is the new frying: You know how everything tastes better fried? Well, almost everything tastes better smoked, too, and that includes cocktails. Bartenders (Eben Freeman at Tailor in New York, for example) are smoking their bourbons, and chefs, recognizing the national craze for BBQ flavor, are smoking more than just salmon and ribs: nuts, salts, even smoked steelhead roe (at Chicago's Alinea). Who says smoking's bad for you?
6. Regional roasters are the new Starbucks: It's come full circle. What started as a local coffee phenomenon migrated to other cities and turned Americans into java junkies. Then the chain overexpanded, and the little neighborhood coffee roasters thrive again, like Stumptown (Portland, Oregon), Blue Bottle (San Francisco), and La Colombe (Philadelphia).
7. Portland (Maine) is the new Portland (Oregon): Abundance of great chefs, restaurants, and local foodies? Check, check, and check. Want examples? Visit Five Fifty-Five, Hugo's, and Fore Street to start.
8. Rustic food is the new molecular gastronomy: Wacky weird-science cuisine that requires fancy-schmancy equipment doesn't necessarily make food taste better, and more often than not it adds needless complexity (there are exceptions). Most importantly, no one really wants to do this at home. Expect to see comfort food stage a comeback again.
9. "Top-Rated" is the new "Critic's Pick": Power to the people; single critics are a dying breed. Why believe what one person says when you can read and reflect on what hundreds think?


From McCormick:

1. Toasted sesame and root beer: An iconic soda is rediscovered for its versatility as a cooking ingredient, paired with the bold nuttiness of toasted sesame seed.
2. Cayenne and tart cherry: The flavors of two superfoods -- the heat of cayenne and sweet-sour tang of tart cherry -- pack a multi-layered punch.
3. Tarragon and beetroot: The hip pair creates a sensory feast that is anything other than predictable or restrained.
4. Peppercorn melange and sake: Japan's notable rice wine finds a new partner in the quintessentially French unison of multicolored peppercorns.
5. Chinese five spice and artisan-cured pork: Hand crafted artistry merges with a harmonious Asian blend to create an innovative taste sensation.
6. Dill and avocado oil: Mild avocado oil finds an elegant partner in clean, minty dill -- reflecting the healthy goodness that comes from pure, natural ingredients.
7. Rosemary and fruit preserves: Fresh-picked fruit flavors fuse with aromatic rosemary for a progressive interpretation of sweet and savory.
8. Garam masala and pepitas: A beautifully matched global combination of an intoxicating spice blend from India and a prized seed popular in Latin America.
9. Mint and quinoa: Nutritious, whole-grain quinoa is taken to new heights when paired with the exhilarating, cool taste of mint.
10. Smoked paprika and agave nectar: Smoky sweetness from the purity of nature celebrates a union of Spanish and Mexican ingredients.

Thursday, December 4, 2008

Trying to cook up the next Restaurant Week

Zagat is rallying 17 of New York’s most worshipped chefs for an off-beat promotion that one coordinator likened to Restaurant Week, the business booster now used by restaurants from coast to coast.

Stanley Lobel, the Babe Ruth of butchers, said the Vintage Dinner Series could give a lasting lift to the bottom lines of restaurants everywhere by teaching the public to eat low-cost meats that haven’t been seen in kitchens for 100 years.

The promotion calls for a series of banquets featuring dishes, drinks and cocktails from the 19th century. Various signatures of that age will be served—apparently in copious quantities—at the participating restaurants on different nights from Jan. 12 through March 25.

“Each restaurant will hold its own banquet inspired by the 19th century,” with menus varying from feast to feast, explained Tim Zagat, co-publisher of the merlot-colored bibles of sport dining. Seating will be limited, and participants will be charged an all-inclusive price consistent with the host restaurant’s regular menu prices. Translation: Something stratospheric for Per Se, where a normal meal costs the equivalent of a Caribbean vacation, but only skyscraper high at a place like Le Bernardin, chef Eric Ripert’s celebrated outpost.

Lobel, who helped Zagat hatch the idea, cited such banquet menu possibilities as a stuffed calf’s heart. “We all know that’s a round piece of meat that looks like a heart,” explained Lobel, whose family runs Lobel’s of New York, the DeBeers of proteins. But, he conjectured, what if it was stuffed and baked into something delicious? “The cost on that is extremely reasonable and can be given away at a very attractive price.”

“We’re going to see unusual cuts of beef and lamb that are going to be a lot more economical,” he said. “I think that’s going to trickle down to all restaurants.”

He also cited beef liver as a Gilded Age favorite—“not calf’s liver, which is what you usually see. I’m talking beef liver, baked, finished off on the grill so there’s a charred outside, topped with my favorite spice, garlic.”

In addition, “one of the things I’m going to ask the chefs to look into is the blood of the animal,” he said, noting that it was used as “a healer” during the 1800s. He explained that the chefs may want to use it “as gravies, as dippings, as sauces.”

“We’re going to have some meals we haven’t seen in 100 years,” said Zagat. He noted such possible components as game, or, on the drinks side, punches and vintage cocktails. In addition, the banquets might resurrect the sort of presentation showmanship that dazzled Diamond Jim Brady—wows like Cherries Jubilee.

Zagat said the Vintage promotion was conceived as a way of bringing back classic dishes “that have disappeared from American culture.

“This is not just to have a series of parties,” he said. “This is to bring back a lot of what we have lost.”

Lobel, who is working with the chefs to craft authentic 1800s menus, was more straightforward about the potential business payback. “The last time the restaurant industry got a kick was Restaurant Week a few years ago,” he said.

Actually, Restaurant Week began more than a few years ago. A number of restaurants in the city decided in the 1980s to give their lunch traffic a boost during the heat of summer by all offering three-course meals for a price base don the year--$19.88, $19.89, etc. It’s now held twice a year in New York, in winter as well as summer, and has been copied by restaurateurs from coast to coast.

As part of the Vintage Dinner Series, participating restaurants will be asked to donate one table to a charity of their choice. Presumably the seats will be auctioned off or someone be used as a money-raising prize.

Zagat said reservations for the dinners would be handled individually by each place. “I think a lot of the restaurants will be sold out by the end of the day,” he said.

The participating chefs include such marquee-topping stars as Jean-Georges Vongerichten, Mario Batali and Lidia Bastianich of Del Posto, Thomas Keller of Per Se, Alain Ducasse of Adour, Charlie Palmer of Aureole, David Bouley of Bouley, Tom Valenti of Ouest and David Barber of Blue Hill. The complete list is available at Zagat’s web page for New York restaurants.

Wednesday, December 3, 2008

A boon and he's not even President yet

The District of Columbia's governing Council has agreed to allow bars and other alcohol-serving establishments to keep the drinks flowing until 5 a.m. during the four days the city is likely to be packed from Barack Obama's inauguration, according to the National Restaurant Association and the The Washington Post. The NRA's SmartBrief newsletter reported that restaurants can also keep their doors open 'round the clock, though only food can be sold after the early-morning last call.

The report said the concession was granted at the request of the Restaurant Association of Metropolitan Washington, which apparently hoped to help its members capitalize on the historic occasion.

Bars in the city usually have to close their taps by 2 a.m. The mandated closing time will be pushed back from Jan. 17-21.

Losing a credit card

San Francisco Chronicle scribe Michael Bauer writes today in his blog about restaurants misplacing customer credit cards or mixing up what plastic should be returned to which table, so two payers end up with cards that aren't theirs. His beef is that the place at fault often expects the customer to pick up their cards after the situation is resolved. He recounts a time when his card wasn't returned with the bill, and he didn't notice it until later. The restaurant acknowledged that it had the card and invited him to come by and get it. Bauer said he asked them to send it to him, prompting the staffer to inquire about how he planned to pay for the postage.

But Bauer's missing the real problem in that situation. In the era of identity theft, a credit card should never stray from the customer-server-processor-server-customer path. Any detour is a serious security rift mandating at the very least that the card be cancelled and re-issued by the bank or American Express. Usually they'll even mail it to you at no charge, and often overnight.

Tuesday, December 2, 2008

Burger King's weird new viral campaign

I’m functioning here as a patsy in Burger King’s latest viral marketing ploy, but I plead professional obligation. The chain is slyly spreading the message that it’ll break a campaign in a little over five days to divulge the results of unprecedented tastes tests between its Whopper and McDonald’s Big Mac.

The twist is that the subjects are supposedly “Whopper virgins”—people from remote nooks and crannies of the globe who had never tried either burger, or maybe a sandwich of any sort, before the tests. They’re the sort of people you’d see in National Geographic, standing next to their trusty yak or llama.

“If you want a real opinion of a burger, ask someone who doesn’t even have a word for burger,” explains a looped teaser running on a special website, whoppervirgins.com. “No kings. No clowns…See what people think when no one has told them what to think.”

I know the campaign will commence in less than a week because a counter on the site is ticking off the seconds, minutes, and days until a documentary based on the tests will make its debut.

The relatively sparse copy stresses that this is all real—that the tastes did indeed require 13 planes, two dog sleds and one helicopter to reach subjects in Greenland, Thailand and Romania.

I couldn’t find a word about it on BK’s website, and I don’t recall any mentions of the campaign during officials most recent conference call with investors. That’s so Old World marketing. This appears to be something new altogether.

Drinking for a healthier planet. That's my story.

I’m pleased to report you can now drink and save the planet, too. As a restaurateur revealed during the National Restaurant Association’s webinar this afternoon on ways of being more ecologically minded in a bleeding-out economy, there are such things as “green drinks.”

“We devised a green drink menu,” explained Laura Wood Hber of Croc’s 19th Street Bistro in Virginia Beach. “We have organic beer, organic wine, organic vodka, organic nectors. We have a Sugar Plum Martini where we use organic sugar on the rim.”

Pardon me as I wipe a tear from my eye.

Even more arresting—and that's not easy for me to say—was the common sense demonstrated by Hber and her fellow presenters in the green steps they’ve taken. Right now there’s a feeling, reality-based or not, that restaurants’ green efforts may be sidelined by the industry’s financial straits. How can you save the environment when you’re focused full-bore on saving the business?

And does a thin-walleted public even care anymore? According to epicurious.com’s forecast of next year’s major food trends, “‘value’ is the new “sustainable.’”

That notion was swatted down during the webinar, “Making 2009 a ‘Greener’ Year for Your Restaurant.” The title may have used "greener" in the environmental sense, but it could just as readily been referring to dollars. The speakers stressed that you don’t have to loom your own uniforms or adopt a polar bear to demonstrate an environmental consciousness. A few simple changes, they reported, will please both green-minded customers and a dollar-fixated business manager.

Chris Dahlander, proprietor of the two-unit Snappy Salads fast-casual chain, said his operation has cut its water bill by $1,600 a year by installing low-flow sprayer nozzles in the kitchen. He estimated the cost of the nozzles at under $80, and noted that his utility provided them to Snappy Salads free of charge as part of its conservation program.

He’s also cutting down on paper—and how much he spends on it—by refusing to use a fax machine. “I say, ‘Well, I have e-mail,. Why not just e-mail it to me?’”

Jeffrey Clark, a consultant with ICF International who spoke on behalf of the Environmental Protection Agency’s Energy Star program, noted that keying restroom lights to motion sensors costs less than $85. Yet by ensuring the lights stay off until someone enters, the gizmos cut a room’s electricity use by 25% to 75%. Similarly, fluorescent bulbs, despite their higher costs, use only about 25% as much electricity as incandescents do, and they last appreciably longer.

Dahlander cited such other economical green moves as using vegetable scraps to make soup stocks instead of throwing them out, and cleaning glass surfaces with just vinegar and water.

But not all of the green measures he’s taken are as economical as standard practices. He noted that Snappy Salads uses cups and other disposables that are made from corn starch, which biodegrades. But they also erode his bottom line a bit.

“The corn-based cups cost about 16 cents each,” he said. “So we decided to charge people for water.”

Dahlander explained that he put up a sign in each of his restaurants, alerting patrons that a glass of water would now cost them 25 cents, and explaining why. The message explains that “we’re not going to make any money on it,” and that the charge merely defrays the cost of the cup.

“I’ve had three people say to me, ‘Hey, you’re crazy for doing this.’ They paid it. They just said I was crazy.’”

He noted that each of his fast-casual outlets gross about $1 million a year in sales. Crazy, indeed.

You can catch a replay by looking here on the NRA's environmental site, Conserve.

New look for Jack in the Box?

Jack in the Box is testing some new exteriors and logos. You can see them here.

During a conference call with investors a few weeks ago, Jack CEO Linda Lang spoke about a new upscale prototype that included a nicer dining room, a fireplace, a more efficient kitchen and self-service ordering kiosks. She noted that the units featuring the new look (she cited Denver and Corpus Christi as the sites, not San Diego) tended to have more dine-in patrons.

A restaurant money-laundering scam?

Michael Bauer, restaurant critic and food writer for the San Francisco Chronicle, has stumbled across what appears to be a money-laundering scam involving restaurants. Read about the specifics in his blog.

A seal of security for gift cards

Sales of gift cards are expected to be bah-humbugged this year by fears the issuing restaurants will go bankrupt, leaving card holders with worthless plastic. Today several major chains revealed they’re hoping to allay those worries by promoting what amounts to a Good Shopping Seal of Approval.

They’ve formed a self-policing trade group, the Retail Gift Card Association, that will extend membership solely to restaurant and retailing brands with “longevity in the marketplace” and a commitment to “customer friendly practices.”

In addition, participants are required to meet “a set of principles” that protect card buyers, according to the announcement.

The charter members include Applebee’s, Subway and Marriott. Their partners are the retailing giants Best Buy and Home Depot.

The association said it will be strict in enforcing its membership requirements, but expressed hopes that all retailers will meet those standards and qualify for inclusion.

Research from the National Retail Federation indicates that 3.1 percent of shoppers are cutting back their gift card purchases this year because of fears that the issuing store or restaurant will go out of business. The NRF is forecasting that sales of cards will drop 5% overall from last year’s levels, to about $24.9 billion.

Monday, December 1, 2008

What hath Al Gore wrought?

The complexities of the restaurant business continue to deepen, courtesy of the medium you're using to read this. Consider a few of the advantages and complications the fast-changing internet presented to the industry in the last few weeks alone, starting with the scandal of the naked-woman photos.

In case you missed the news reports, McDonald's recently found itself in the center of a controversy that would've been a slice of bad science fiction ("Flesh Gordon," maybe?) to Ray Kroc. A customer reportedly left his cell phone in an Arkansas unit and was contacted to come pick it up. The staff had apparently poked through the info stored on the phone to track down its owner. The patron apparently thought nothing more about it until his wife started getting e-mail messages about nude photos of her that had been posted without her knowledge on the internet.

It seems the woman had e-mailed the shots in a fit of naughtiness to her husband, who'd kept them stored on his, um, hand-held. According to the slew of coverage, employees of the restaurant found the pics, uploaded them, and never said a word about it to the phone's owner. Now he's said to be suing the franchise, the unit's manager and McDonald's Corp. for more than $3 million. McDonald's is certainly one of the more progressive chains in the business, but it's doubtful the operation has a section in its manuals about how to handle that situation.

About the same time that mess was starting to stink, news arose from Australia of another unprecedented development involving restaurants and the web. A fish house in Melbourne had reportedly been skunked on a $520 (Australian) bill by a party of five indulgent youngsters. According to the news coverage, proprietor Peter Leary remembered that one of the deadbeats knew a waitress at the place. Leary spoke with the woman, who provided the name of her acquaintance. It dawned on Leary that he might be able to find the young man by looking on Facebook, the social network that's all the rage with young people. Sure enough, after a few searches, Leary found a photo of the offender and the information he needed to track down the chew-and-screw group. He got his money--plus the tip.

Those might've been extraordinary, newsworthy events. Less noticeable but more profound is the change that's slowly taking place in restaurant marketing. Clearly a new internet medium is arising, and restaurants will have to master it if they want to stay competitive with places up and down the street. If you doubt it, consider a few of the "tweets" I fielded today from Twitter:

--From Dunkin' Donuts, at about 9 a.m.: Good time for a cup of coffee. It was followed up at 3 p.m. with, "Dare I say, it's another good time for a cup of coffee?" Talk about keeping a possible purchase top-of-mind.

--From Rickshaw Truck, the mobile version of Rickshaw Dumpling Bar, a popular concept in New York City, right before lunch: "RickshawTruck Is in the financial district on Wall and Williams Street. We've got those dreamy dumplings and a brand new addition to our sides, miso soup"

--From Riley's Cafe, an independent in Cedar Rapids, Iowa, at about 3: "Twitter Tuesday Special: free coffee, pop, ice tea or lemonade with meal purchase"

Anyone familiar with Twitter and its competitors would probably agree that they're the new frontier in restaurant marketing. The key phrase there is, "anyone familiar." If you're not, I'd strongly suggest that you take the plunge and visit Twitter.com ASAP.