There’s a lot to be said for sledgehammers, especially if we’re talking mental health. Or economics. Think about it: Despite a calamitous scene right out of “Batman,” not a single restaurant chain went postal this recession. Oh, sure, there were a few eyebrow-raising moments from Quiznos and Burger King. But sanity, and profitability, more or less prevailed.
And for that, you have to acknowledge the role of the sledgehammer. If you don’t believe me, consider the words of Hudson Riehle, statistician and economist for the National Restaurant Association and definitely a Commissioner Gordon kind of guy. “The recessionary environment is fundamentally rewriting boundaries of market and brand definitions,” he said during a confab held last week by NASDAQ.
The translation for those of us who giggle when we hear “standard deviation”: Frustrated by the drop in business within their usual strongholds, savvy restaurateurs took a sledgehammer to the walls that once defined their segments. They busted out.
Fine-dining chefs opened burger joints. Quick-service burger places focused on coffee and raided the full-service sector for items like ribs, Teriyaki bowls and mac and cheese. Taco Bell crowed that it was now a place for the health-minded, and revealed in recent days that it would develop family style meals like the casseroles now offered by sister concept Pasta Hut—er, Pizza Hut.
It’d be like a pizza chain going into the sandwich business. Which, of course, Domino’s did as a way of cultivating a lunch trade. Beforehand, execs said, many of its outlets didn’t even bother to open until dinnertime.
Kentucky Fried Chicken went the other way. Buckets are what move at dinner, so it added Kentucky Grilled Chicken in hopes of selling more buckets to families.
Some operators needed a sledgehammer dropped on their toes to get hoppin’. A number of McDonald’s franchisees opposed the burger giant’s multi-million-dollar effort to recast itself as beverage specialist. Now, USA president Don Thompson told CNBC, 40% of the customers who buy a coffee drink where stopping at a unit specifically for that reason. It’s incremental business in a big, big way. No wonder the field-level opposition seems to be waning, at least here in the New York market.
The smash-and-charge approach definitely seems to be working. Jamba Juice, a chain whose products once all came in a cup, tested solid food in just six units before deciding to roll the wrap, salad and flatbread array into all of its California stores. The reception was enough to prompt CEO James White to predict the menu could generate as much as 20% of an outlet’s sales.
Yet, Riehle asserted, returns will likely surge as the economy improves. He explained that the diversifiers are winning “credibility” from consumers who might once have seen the brands as a one-trick pony. Now they’re being viewed as brands with a variety of viable options, which promises to expand the concepts’ scope and foster more frequent visits.
“We used to call it ‘the veto vote,’ where someone in a party would say, ‘No, I don’t want to go there because they don’t have whatever,’” Riehle said, no doubt making some bloggers feel old. The diversifiers are smashing that common objection, he suggested.
The industry might also stand to gain handsomely from the biggest boundary smash of all: Licensing, a sleeper part of the business that’s currently surging into a major trend. By moving beyond ready-to-eat food, into products as strange as body cologne (Burger King), pajamas (BK as well), casual wear (BK and Chuck E. Cheese's), and toys (Jamba Juice and McDonald’s), the chains are erecting their own Alaskan pipeline into new revenue sources.
And the key: Once again, the sledgehammer, used this time to smash pre-conceptions and limited forms of thinking about what a brand represents. The new perspective is to view a restaurant-chain brand name as more of a lifestyle badge, which adds considerable topspin to the licensing movement.
But it all comes back to that sledgehammer. So, please, stop drooling over your Blackberry and give heavy construction tools their due. Make this today Sledgehammer Appreciation Day.