Monday, December 31, 2012

Gee, thanks, Santa

Complaint Department
Santa Enterprises LLP
North Pole

Dear Obesity Statistic,

You totally screwed up this year, Fat Man. My pre-holiday letter could not have been clearer: Bring. Better. Times. Instead, here we sit cliff-side, waiting for the world to sour for restaurants and virtually every retail business except pawnshops. Maybe I should add bankruptcy lawyers to the list, too.

If Congress fails to do its job today, and that appears all but inevitable as of noon, disposable income is going to take a short-term hit as tax rates automatically climb. But that’s sort of academic, isn’t it, White Beard? The real economic calamity will be the blow to consumer confidence, which will dash what had been the restaurant industry’s best hope for a rosier 2013.

As the National Restaurant Association noted in its 2013 business forecast, consumers want to buy more of their meals from restaurants, but are too uptight about their financial situations to indulge. Smart restaurateurs will figure out how to “unlock that pent-up demand,” in the words of the Association’s economic Obi-Wan Kenobe, Hudson Riehle.

Now, thanks to the fakers who profess to be the nation’s leaders and public servants, consumers are going to get their biggest fright since 2007. And the dollars fueling the economy will be in shorter supply because the IRS will take significantly more of them. That kicks off a vicious cycle of consumers spending less, businesses cutting staff to protect profits, and the downsized meting out their savings just to survive.

But the damage for restaurants doesn’t end there. The federal food safety and public health watchdogs will have their budgets cut, which obviously means less oversight. The industry has been largely spared food-safety crises like the lettuce and spinach contaminations of 2006. What happens if that lull should end? How weakened will our safeguards be?

The list of aftershocks from the cliff dive is long and sobering. Santa, isn’t there a Naughty Intervention you can invoke to get some decent behavior from our federal politicians?  Maybe threaten them with the possibility of ugly sweaters under the tree next year? Or use their lawns the next time you take the reindeer for a walk?

Maybe you could let them graze a bit, too. If going over the cliff is as bad as expected, reindeer steaks may be the best treat we could afford next Christmas.

Tuesday, December 18, 2012

Why restaurants should stop hitting themselves in the head with a hammer

If a business repeatedly draws fire for a routine action, it usually realizes the practice needs to be changed. But restaurants apparently have a blind spot, which is making them look like the biggest goobers this side of Honey Boo Boo.

Every week seems to bring another controversy over a thumbnail description some eating establishment printed on its receipts to identify the party. Most recently the publicity storm was ignited by “FAT GIRLS,” typed by a server named Jeff onto the order slip that was given to the women as a receipt by Chilly D’s in Stockton, Calif.

That tag was merely unflattering. Others have been outright racist or just plain dumb, like describing the patron as a bitch or the party as a “100 % shit show,” as if those are identifying characteristic for an order runner dashing through the dining room.
There are so many instances of restaurants blundering in that fashion that has created a standing Receiptrocity tag for stories about Ripley's-caliber I.D.'s that came to light.

It happens so often that you have to wonder why an establishment wouldn’t re-write its procedures to avert any risk. Why, for instance, don’t they use table numbers in full-service places, or take the name and call it in takeout situations?

Years ago, I asked the hostess at a crowded New York hotspot about how she finds parties at the bar when their tables are ready. She explained that she jots down the style and colors of their shoes, then looks at feet as she navigates her way through the lounge area.

There have to be any number of ways of getting away from the use of physical attributes as the identifier. Go by the color of the orderer’s coat, or limit the palate to positive features.

Do anything but print an insult on a piece of paper that’s presented to the guest, as if he or she isn’t going to notice. If an order-taker can’t handle a challenge that small, maybe it’s time to re-think the whole receipt-I.D. system. Or maybe who you’re paying to take orders.

Thursday, December 13, 2012

Restaurants' best bet: The frustrated consumer

The silver lining of an otherwise grey-skies outlook for the restaurant business may be the public’s pronounced frustration, according to new research (and maybe a dash of psychoanalysis) from the National Restaurant Association.

In the words of NRA statistical guru Hudson Riehle, the Average Joe isn’t getting enough, and the Average Jill is even more unsatisfied. Observes Riehle: “You can see as a result of the weaker economic environment a substantial pent-up demand that exists among consumers to use restaurants.”

As he explained Tuesday in delivering the association’s 2013 sales forecast, about 40% of adult consumers would like to frequent a restaurant more often than they currently do. That compares with a frustration index of 31% in 2007.

The unfulfilled desire runs higher in women. “One out of every two adult women in America are not eating in restaurants as much as they would like,” comments Riehle. Since women are still the primary meal preparers for families, that finding suggests how much restaurant-meal replacement is happening in America today.

“Obviously those customers, as a result of what’s going on with their net worth and uncertainty over the economic outlook, have moderated their dining-out behavior,” Riehle says.

But he’s a table-half-full kind of guy. People are denying themselves the pleasure of dining out, but “the savvy restaurant operators know [how] and will continue to execute to unlock this pent-up demand.”

And, he notes, “the industry is fortunate in that consumers love to go to restaurants. Ninety-three percent, over nine out of every 10 American adults, report that they enjoy going to restaurants.

“This is a very important competitive hallmark of the industry,” he stresses.

The NRA is forecasting a sales increase for 2013 of 3.8%, or just under 1% if menu price increases are factored out. It expects menu prices to rise by 2.9% on a rise in wholesale food prices of 4.2%, meaning that margins will take a hit.

Monday, December 10, 2012

Restaurants' new new-revenue source

Once upon a time, restaurants were places where you ate a meal. Then takeout, delivery and catering transformed them into outlets that sold meals with or without serving them. Now come unmistakable signs of another evolutionary advance for the business. Believers call it pack-and-go, but it amounts to mothballing the home stove during weekends and holidays.
The most familiar example is Thanksgiving dinner to go, where the establishment does everything but plate the food. It cooks the turkey and possibly the sides, which the customer picks up and serves at home. Popeyes’ Cajun turkeys have been a boon for the chain for sometime, and countless gourmet shops in the New York area have been sparing Mom or Dad that wear and tear almost since the days of the Pilgrims.
Now restaurants are pushing harder for that big-meal bonanza. Part of the effort is varying what’s offered. Boston Market said it saw a 10% increase this Thanksgiving in the sale of what it calls Heat & Serve, or meals that are sold chilled rather than hot and ready to eat.
At the same time, places are chasing other pack-and-go occasions. Mimi’s, for instance, just added a new option called Brunch Feast To Go, a $39.99 meal that serves at least six people. The components include six muffins and six quiches.
Special-occasion or holiday meals for up to 100 people can be ordered from the casual chain via a special website.
 Bad Wolf Bar B Q in Roanoke, Va., is one of the many restaurants, and barbecue places in particular, that offers tailgate party packs (for four, eight or 24 people).
Rancho A Go Go Barbecue in Orange, Calif., will slow-roast a turkey or prime rib for your Christmas meal. You can also buy one of its party packs for a bachelorette party (no extra-sauce jokes, please)  or wedding rehearsal dinner.
And need we mention Super Bowl pack-and-go’s?
You can argue that this is just catering in a different form. But it’s different in that the food is more ambitious—a slow-roasted turkey, not an eight-foot-long hero—and serves a different need. This is a matter of replacing the holiday meal, or a version of the family dinner that seemed safe from restaurant rivalry.
No matter how you categorize it, pack-and-go has the feel of a major new revenue stream for restaurants. It’s furthering their evolution from a getaway to a replacement kitchen. And that’s a very good thing for the business.

Monday, December 3, 2012

Restaurants' newest LTO: Design

To understand a shift underway in the chain restaurant business, consider that you can sip a martini at the bar of Denny’s newest restaurant while waiting to get married in the on-premise wedding chapel.
Then re-watch “All About Eve,” the classic film about an understudy who eventually grabs the spotlight from the established star. Restaurant design is growing beyond its supporting role to rival menus as the marquee draw.
Less noticeable is how that’s affecting headquarters’ fundamental strategy. Once, renovations were something a chain undertook maybe every five years, more likely every seven or 10, and quite often not for more than a decade. Now a concept’s layout and look are getting tweaked on a refresh cycle that’s closer to the constant updating of menus.
A case in point: Kona Grill ended its recent announcement of a new “swanky” design with the promise to adjust the look as the chain fields reactions from customers. "We are excited for our guests to come and see our new design and will incorporate their feedback as we utilize this new look for future restaurants and remodels," said CEO Berke Bakay.
The 23-unit polished-casual brand isn’t alone in trying to deliver a more sophisticated setting to customers. TCBY is trumpeting a new format that includes a Live Culture Bar where patrons can sip smoothies made with anti-oxidant-packed juices and Greek-style yogurt.
O’Charley’s turnaround efforts pivot on a new look that includes a showcase bar called The Charles, after founder Charles Watkins. Also included are what the chain calls “signature rooms,” like The Porch and The Piedmont. “Signature,” of course, is a term that’s usually reserved for distinctive menu items.
Denny’s is quick to note that its newest restaurant, in the downtown area of Las Vegas, is a one-of-a-kind. Indeed, it even has its own name, Denny’s on Fremont, the street it fronts.
Sounds as if the chain may be borrowing a page from Starbucks’ strategy plan. The coffee giant has also started naming its outlets by location. Each differs from the other—not necessarily in menu, but in design.

Monday, November 12, 2012

Food for thought from the Best Practices confab

After a night of trick or treating, my usual M.O. as a kid was to empty the bag on my bed and stare at the contents for a while, dazed by the abundance of what was mine to savor for days, even weeks. It was almost too much to comprehend.
I’m feeling sort of that way about the People Report Best Practices Conference now that I’m back in my office. There’s just so much to digest and act upon.
To mine it all, I’m reverting to the proven post-Halloween method of sorting the take by delectability.
Whole Candy Bars
--If you think the cultivation of a higher business purpose for your employees and organization is a lot of kumbaya for latent hippies, consider how often the topic was cited during the conference as the new key to differentiation. If your employees feel they’re working for more than just a wage, if they can be proud of what they’re doing because they’re contributing to more than just the owner’s bottom line, they’ll care and feel good about what they’re doing.
You’d have snapped the automaton syndrome, where carbon life forms go through the motions to get a check until they can find something with meaning or more zeroes in their checks. That theme was sounded repeatedly, not just from the podium but in casual conversations during meals, breaks, receptions and unofficial bar time.
--Stories are the new mission statement. Companies once tried to capture their essence in lofty declarations of purpose and style, the all-important mission statements that hung prominently in headquarters. The new method of illustrating the soul of a business is through stories—narratives from real people about their experiences as employees or guests. Stories about the uniqueness of Chili’s were a big part of the turnaround effort of that chain, as COO Kelli Valade emphasized in her presentation at PRBPC. Anecdotes about guests’ experiences are the basis for Chili’s current ad campaign, More Life Happens Here.
Red Robin’s Bill Streitberger used the story of how employees reacted to the shooting of seven colleagues at the Batman premier this summer to illustrate the franchisor’s caring culture (see the delectable on higher purposes, above).
Kent Taylor’s account of how he founded Texas Roadhouse gave a hologram-grade depiction of what that concept is all about, as did George McKerrow’s recollection of the early days of Ted’s Montana Grill.
Twizzlers, candied apples and Goobers
--Male white Republicans no longer rule. Because the conference convened on Election Day, there was considerable talk about the results. The tenor would have surprised any longtime member of the industry. When politics typically come up at a restaurant gathering, the rhetoric can sound like the cheers of a Tea Party rally.  Usually the moderates are Republicans who’ve finally come to terms with the direct election of senators.
Not at this conference. Attendees spoke with relief that sanity had prevailed in the voter’s booths about women’s health and choice, and rabid Capitol Hill obstructionists were resoundingly blasted, regardless of party affiliation. A video gently poked fun at both presidential candidates for claiming that God, history and justice were on their side.
There was talk about working with the Obama Administration, not demonizing it, and comments that the industry had to shape Obamacare, not resist it at all costs.
Clearly there was more diversity in political orientation than any conference I can remember. Or maybe attendees just felt more comfortable this time around at letting their divergent views be known.
Candy corn and bite-size Tootsie Rolls
Here, in completely random order, are pearls that I heard during the two-plus days of the conference. I identify the source here if I knew it and the attribution wouldn’t land them in trouble, or probably wouldn’t
--Places that sell more than ready-to-eat food could have an advantage over conventional grab-and-go or sit-down establishments because consumers have another reason to stop. Hudson Riehle, the head of research for the National Restaurant Association, cited such possibilities as retailers promoting their foodservice offerings through discounts on other products they sell, like gasoline.
--“ For those under age 45, their expectation of a restaurant experience involves technology. That will be another point of engagement for them.”—the NRA’s Riehle again.
--“One out of every 5 restaurateurs regards government as the biggest issue facing the business.”—Riehle once again.
--“Pro Start,” the National Restaurant Association’s program for steering disaffected high school students into a foodservice career path, “is the way our industry can change its image.”
--“This financial collapse, it has changed us.” –People Report’s Joni Doolin.
--On the industry’s handwringing over Obamacare: “Are we creating a panic within our own industry? Are we raising fears that we’re going to cut hours?”—Tina Hebert, senior director of HR for Le Madeleine. 
 For more information on the conference, scroll down to the live posts from last week.

Friday, November 9, 2012

Our national shame

Now that Mrs. Obama can shoo away the moving van, supporters of the First Lady’s efforts to curb childhood obesity don’t have to fear a backslide into broader backsides. The problem of over-eating will continue to get the spotlight.
Too bad some of the attention couldn’t be redirected to the other nutrition crisis threatening our children. Sure, many youngsters suffer from a gross imbalance in how much they eat and how many calories they burn. More disturbing is the huge but little-noticed issue of kids not getting enough calories in the first place.
We’re not talking about too many empty calories or not enough solid nutrition. We’re talking about children going hungry, period. They can’t eat because there’s insufficient money within their families to buy food..
In January, my editorial duties were expanded to include oversight of FoodService Director, a publication for the managers of high-volume feeding operations in colleges, hospitals, office buildings and schools. Speaking to readers from the latter sector, I’ve heard story after story about youngsters virtually living off the free or reduced-cost meals they’re served at school.
The accounts are heartbreaking: A young boy who’d eat half his meal, then wrap up the other half to bring home to his pre-school-aged sister.
The parent who asked a teacher to wrap up anything her child didn’t finish at lunch, so the kid would have something for that night.
The countless stories of teachers who’d call a student up to their desk, then open a drawer so the child could take a packaged snack home for dinner.
Share our Strength, the charity devoted to ending childhood hunger, surveyed teachers to see how often they dip into their own pockets to get food into their students’ mouths. The average contribution: Just over $26 per teacher.
Worst of all, the new school-feeding regulations that were put in place by the Obama Administration are aimed at curbing obesity. Toward that end, they put a cap on how many calories a youngster can be given in a free or reduced-price meal.
That’s a painful reality to teachers who know a student may at best get a meal or two over a weekend—and often won’t get anything.
Then there’s the wallop of the regulations’ requirement that student be served a piece of fresh fruit. The kids have to put the orange or two kiwis on their trays, whether they’re going to eat it or not. And often, that’s a not; a fairly costly item ends up in the trash.
It’s a national disgrace, a shame that should mobilize us all to put Share our Strength out of business.
Michelle Obama deserves high praise for underscoring the problem of childhood obesity and trying to turn that heightened awareness into action. She used the White House publicity machine well.
But all of us, from houses of all colors, have to work right now, with all we’ve got, to ensure our next generation doesn’t go to bed hungry.

Thursday, November 8, 2012

Red Robin talks about the Colo. shootings

Here at People Report Best Practices Conference, Red Robin's Bill Streitberger is talking about the culture of the resurging casual dining chain. The vice president of HR offered up the illustration of how the chain responded to the shootings at the Batman screening in Aurora, at a movie theater in the same shopping mall that houses a Red Robin.

"We had 17, 18 [crew members] who went to that premier," Streitberger exlained. "We had seven of our team members who were hit, who were shot. Sully, the one who had the birthday, didn’t make it out."
Streitberger said he got a call at 4 a.m. that morning about the shooting. One of the victims was a British woman, Christine, and he tried to track down her family in the U.K. to let them know she was alive.
In the days afterward, he continued, the rest of the system rallied around the crew members from the unit. "The team members wanted to be at the hospitals, checking on their friends. So we had bartenders coming in from other restaurants...They were able to raise a little over three hundred grand to help those individuals with their bills."
Afterward, "we had a first-responder night to thank all the EMTs, firefighters, the police, the people who were at the scene. And all the kids [who'd been shot and survived] were there to say thank you. Christine was there to give a rose to the guy who carried her out. He saved her life.
"It’s a tragic story, but it also has its silver lining on how everyone pulled together," Streitberger observes.

Live from the People Report Best Practices Conference

That crash you may be hearing from Dallas is the sound of a long-taboo topic finally breaking into sunlight. One of the most respected and principled men to ever grace foodservice, Lou Kaucic, is talking from the stage about the personal cost he paid as a closeted gay man in the chain restaurant business.

"I had to face my reality," he said. "I had three things I could do about it. I could outright lie, making up stories about fictional females. I could avoid the issue--'oh, I'm just going to be hanging out with some friends.' Or I could tell the truth. Not an option. I knew I could be fired for being gay."

"I decided I would withhold any information about my personal life," he continued. "I just wanted my closet door shut."

Once, Kaucic recalled, he went to the only gay bar in Wichita, Kan., and bumped into a director from another department of the company where he was working at the time. Both looked at the other in sheer panic. Then they both ran away and never said a word about it afterward.

Another time, Kaucic was driving with his partner of eight years, Bill, when they saw someone from his company in a nearby car. Kaucic shoved his significant-other down in  his seat so the co-worker would remain oblivious to the situation. "Billy forgave me," said Kaucic. "But I haven't forgiven myself."

Another time, Kaucic and his partner were at a B&B in the Northeast, sitting in a hot tub. Lou spied the CFO of his then-employer walking toward the tub with his wife. Kaucic sank down into the water and held his breath for as long as he could. When he re-emerged, the CFO had passed.

"Just another vacation day for a man in the closet," remarked Kaucic.

Ten years ago, Kaucic decided to "out myself" as a gay man at a meeting of Applebee's GMs. Afterward, he received a note from a colleague who was there for the revelation. The writer explained that he'd been maintaining the same painful secrecy about his orientation, but no longer. The communication was the man's way of coming out.

There are undoubtedly a slew of executives who are still in the closet, fearful that they could lose their jobs despite their abilities because they don't have the same protections as a hetero job holder.

"I want to introduce you to a term that I don't think many of you know: heterosexual privelege," said Kaucic. "There are privileges you take for granted that aren't shared with my gay brothers and lesbian sisters. I want to give you a few examples:

"Putting photos of our spouses or significant other on our desks at work. Freely embracing our partners or significant others. Freely talking about our musical preferences or cultural interests without fearing ridicule."

In 30 years of attending industry conferences, I've never seen anything as courageous as this. Lou has opened the audience's eyes to a problem that it might not have even noticed. It's there, he suggested. He's aired his personal and obviously painful recollections to raise the industry's sensitivity. Talk about being heroic.

But Lou is not just complaining. As I write this, Kaucic is giving the audience practical suggestions about how to counter hostility toward gay and lesbian associates.

He even painted scenarios and worked out solutions with the audience. In one, a prized customer or key franchisee has just made a disparaging remark about a same-sex couple.

"So what do you do?" asked Kaucic. "Anybody?"

"You tell them, 'it's a shame you feel that way.'"

"Good, good," said Kaucic.

If that doesn't feel comfortable, and you're loath to go that far when you hear a disparaging remark, "just say 'ouch,'" advised Kaucic. "It sends a clear signal."

Wednesday, November 7, 2012

Live from the People Report Best Practices Conference

I'm blogging live today from the People Report Best Practices Conference in Dallas. It's best to read the thread from the bottom up.

4:58: There are those of us who believe casual dining's biggest problem is the loss of rock and roll. A segment that rose to prominence by taking the starch out of full-service dining has settled into a mayonnaise-on-white-bread blandness. Add in the lack of differentiation and you have a pretty good diagnosis of what's wrong with the sector.

Every CEO in that sector should be tied to one of their concept's bar stool and forced to watch the videos that Kent Taylor showed to illustrate the culture he's cultivated at Texas Roadhouse. How often do you see a promotional clip that features an executive giving the competition the finger? Of execs doing some serious damage at the bar? Of using air horns and joke recordings a la Howard Stern at a meeting with the concept's main bank?

Rock on, Kent.

4:17: Three issues keep arising here at the conference: Obamacare, usually mentioned with pronounced disgust; fears of our economy falling off the fiscal cliff, which one speaker noted is already dampening traffic at Burger King and McDonald's, but not Wendy's (no reason was given); and, most surprising, the business importance of serving a purpose higher than the profit motive.

If you're puzzled by the latter, see the story we ran last May about Panera Bread's commitment to conscious capitalism. Here at the conference, a similar philosophy, Changers of Commerce, will be the subject of a session on Friday.

But those well-developed, comprehensive philosophies aren't the only higher purposes getting talk time. There seems to be an agreement among attendees that what engages recruits and employees is pursuing an end that's loftier than mere profits. That objective can be striving to be a better environmental steward, helping co-workers in need of help, or trying to combat social ills like childhood hunger.

If the Old Guard doubts that a new sensitivity to social issues is taking hold, they should book now for next year's PRBPC.

4:06: George McKerrow, the founder of LongHorn Steakhouse and head of the Ted's Montana Grill bison burger chain, is talking about what's next for restaurants that want to be green. For instance, he's talking about a building's co-mingled garbage being turned into clean water and energy in a system being tested in Green Bay, Wisc. He also mentioned disposable coffee cups that consist 40% of recycled fiber.

3:05: Hudson Riehle, the National Restaurant Association's master of statistics, offered this takeaway from his crystal ball: " What you’ll see is a much more rapid integration of technology into the front of the house and the back of the house. For those under age 45, their expectation of a restaurant experience involves technology. That will be another point of engagement for them."

2:55:  Lots of talk at the conference about the effects of Hurricane Sandy on dining out. The gist of it: Definitely a negative impact short term, but a prompt for consumers to treat themselves a few days down the road to the indulgence of dining out. As one speaker put it, we'll likely see a bump.

1:15: Let Harvard Business School keep its snooty reputation and blue-blood degrees. I’m listening to Kelli Valade, COO of Chili’s, and hifalutin educational systems have nothing on her.
She’s talking about what makes a successful employer. It’s not a coincidence that remaking Chili’s into a better employer led to a resurgence of the brand three years ago, as she’s proving with her riveting account of how the company changed its employment culture. That’s what made the difference to guests.
“It started with people and changing our culture,” she explained. “If you do focus on people, and you do focus on culture, you can make a remarkable difference.”

As Valade recounted, Chili's intensified that focus about three years ago, during what she termed a Perfect Storm: Declining traffic, declining sales, seemingly more dissatisfaction on the part of employees as well as guests.

Trying to pinpoint what went wrong, the chain decided to get back to the vision of its builder, the man who gave his name to the company, Normal Brinker. "'WWND"--What Would Norman Do?--"was what we talked about," recounted Valade.
 That approach led the chain to address its employees, affectionately known as Chiliheads. 
They were told, "We will get better at how we treat you. We will get better at what brought you here," she continued. 
That led to stories from the employees about why the brand was special and what they enjoyed about working at a Chili's. That, in turn, led to stories from customers about their experiences.
 The upshot was what's now Chili's marketing slogan, "More life happens here."
It's a restatement of the magic that made Chili's different at its start back in the mid-1970s.
Listening to Valade, you clearly got the sense that it's been recaptured.

Friday, November 2, 2012

Post-Sandy restaurant sensibilities

Here at Ground Zero, the most appreciated post-Sandy restaurant amenity has been the multi-socket power strip. Customers are bringing them into establishments so they can recharge a cell phone, tablet and laptop all at once.

If there’s no wall outlet available, the proper etiquette is to ask someone using a socket if the power strip can be plugged in place of whatever single device the occupant is charging. That phone or laptop gets a slot on the power strip, along with the phone, tablet or whatever of the strip’s owner. Strangers are also welcome to use any vacant socket on the strip.

Other behavioral mores are still forming. For instance, if you’re sitting at a table for hours in a Starbucks or Panera, pulling free electricity and Wi-Fi service, what’s a reasonable “rent” you should be paying? Is a coffee and bagel enough of a purchase? Are you obliged to buy breakfast and lunch if you’re there for both meals? If you’ve not bought anything in awhile, and a customer who just made a purchase is looking for a table, should you vacate yours?

Spending an inordinate amount of time in restaurants these last three days, I can attest that customers were clearly wrestling with those ethical matters. From what I could see, people more or less behaved themselves. There were some freeloaders here or there, but most would periodically buy something to eat or drink, if not a full meal.

Unbelievably, a whole party unplugged its phones and laptops to make way for us when we’d just purchased breakfast and were looking for a place to park. They vacated two wall sockets, which is kind of like giving someone an Eat Free pass.

I was going to brave the scene at gas station grab-and-go facilities, to see how the world of pre-made subs and roller dogs was faring. But the scenes outside were too ugly and obviously risky. I saw a gas line that was easily three miles long, extending from one town (East Quogue) all the way east to the next one (Hampton Bays).

I didn’t want to be around when the station ran out of gas, leaving perhaps 250 cars with nothing but the bad taste of wasted time.

You non-sufferers must be sick by now of hearing about the hardships and damage of Hurricane Sandy. But let me leave you with some perspective: The 20-plus story building that houses Restaurant Business’ editorial offices is located in southern Manhattan. It was filled with 35 feet of water, from the lobby through the basement and sub-basement.

The latter, which houses many of the building’s support features, is still under water.

The landlord says an assessment of the damage won’t be completed until a week from this writing at the earliest. Even if we wanted to go take a look, we couldn’t get in.

We’re not talking about a cabin next to a marina. This is a mid-rise building in Manhattan, not far from Wall Street.

So imagine what it was like for the hundreds of thousands of people who lived in one or two-story places along the coastlines.

Monday, October 29, 2012

A bird's-eye view of Sandy watch

Greetings from pre-Sandy New York, where we’re hunkered down in anticipation of a storm that’s growing scarier by the moment. The real wallop isn’t supposed to hit us until late afternoon, at the earliest, but you wouldn’t think that after looking outside and hearing the wind howl.

Low-lying areas of my town (Port Washington, on the north coast of Long Island) and the three surrounding towns have already been evacuated, and the sirens haven’t stopped this morning, which means trees and power lines are already falling. You can’t help but wonder, How can this get any worse?

But, obviously, it will. The offices of Restaurant Business, at the southern tip of Manhattan, lie in an evacuation area. The building’s management has alerted us that the windows have been secured, the doors have been locked, and the heat is off. Con Ed, the city’s utility company, plans to turn off all electricity in the area to limit the damage to generators if the brackish waters of the East and Hudson Rivers cover the tip of Manhattan as expected.

But enough about me. What about restaurants and how they’re fairing?

I’ve yet to venture out this morning to check the ones in my neighborhood, but I did make the rounds last night. They were expecting to shut for at least two days, but not because of a lack of customers. The problem was getting enough employees to form even a skeleton staff. All public transportation, as you probably heard on the news, has been shut.

There’s also the issue of getting supplies. Last night our takeout choice was practically pushing freebies on us, knowing the food would probably just rot over the next few days if power is lost. Many have also taped or boarded over their windows, so dining out was like eating in a war zone.

Stay tuned. I’ll try to post dispatches for as long as I still have power and an internet connection.

And wish us well.

Friday, October 26, 2012

Restaurant what-if's

Covering developments in the restaurant industry can be like chasing a pack of greyhounds after they’ve spotted a squirrel. With five of the former racers at home, I speak from experience.

Almost as challenging is contemplating what might happen in the business—how things could transpire if conditions, attitudes and variables were just a hair different. Some might say those scenarios are the preferable course.

Consider, for instance, these what-if’s:

What if Homeland Security is what puts the brakes on food trucks? The whistleblower website Public Intelligence got its hands on a PowerPoint presentation the Fire Department of New York (City) recently drafted about the potential dangers of food trucks. FDNY aired concerns that the wheeled kitchens could be used by terrorists because the vehicles are typically parked in high-value sites where a lot of damage could be inflicted.

At the very least, the department noted, yahoos could use the trucks as “an excellent surveillance platform” because they’re on the street for long stretches.

The audience for the presentation wasn’t identified. But a credible terrorism threat usually draws prompt and forceful action, regardless of who’s hearing the message.

What if chains have been wrong about the practicality of serving fresher, less-processed foods? The argument has always been that, first, customers don’t want it, and, second, that a multi-unit operation can’t afford the caliber of raw ingredients and prep talent to feature choices like seasonal produce. It’s just too pricey and time-consuming.

Yet Chipotle, Pizza Fusion, Jason’s Deli and a number of other freethinkers are proving the prevailing wisdom is inaccurate. Chipotle, for instance, recently revealed that it’s testing a GMO-free rice oil as a potential replacement for soybean oil because the environmental profile is preferable. In most instances, it’s already using sunflower oil.

Or consider the new prototype from LYFE Kitchen, the better-for-you quick-service concept that’s being developed by several McDonald’s alumni. The new design features an interior wall where 25 varieties of herbs and spices are grown, and a second growing area where vegetables are grown hydroponically.

The operation is already identifying the family-run farms that supply the concept.

Remember, this is quick-service, and the goal is to make it a multi-unit operation.

What if the outrage over Pizza Hut’s goofy presidential ploy is a sign the industry's marketing should grow up? In case you missed it, the chain was offering prize to any wiseass who’d use his question at the recent town hall-style presidential debate to ask the candidates about type of pizza they prefer.

The chain justifiably drew a storm of protest for trivializing an important event. It was offering a bribe to anyone who’d turn an education system into a publicity ploy. To its credit, the chain backed off and stopped promoting the offer, though it didn’t kill it altogether.

Contrast that with the most recent marketing tactic used by McDonald’s Canadian operations. That branch of the burger empire is airing a video that traces how its French fries are sourced, from farm to fryer.

The account isn’t sugarcoated. At one point a processor notes that the fries are rinsed in the plant with a solution to preserve their whitish color.

But overall the vid demonstrates that the fries are less processed than many customers might think. For instance, dispelled is the urban myth that the fries are formed from some kind of potato meal instead of being cut from peeled whole potatoes.

It’s serious input to the dialogue about food integrity.

What if the dominance of the CIA’s cross-country team is confirmation that tomorrow’s chefs are being trained to consider their own health along with the wellbeing of patrons? Yes, we’re talking here about our CIA, the Culinary Institute of America. The school’s women’s running team has finished first in its conference for three consecutive years.

If this what-if comes true, it’d be the end of a longstanding irony that reaffirmed the old adage about the cobbler’s children having holes in their shoes. While commercial kitchens were re-gearing to foster healthier eating habits among customers, many chefs still looked like the Before picture in an ad for a dieting aid. They weren’t practicing what they were passively preaching.

Okay, back to chasing those hounds now.

Wednesday, October 24, 2012

Restaurants' new opportunities

Opportunism is crucial to the ongoing success of a restaurant or chain. So where are operators hunting opportunities today?

Buffalo Wild Wings can’t seem to slosh a beer without hitting a way to boost sales. Next month the chain will add six “share-a-bowl” snack items that patrons can dip into as they watch college or pro football games.

The wings specialist is also about to try a new restaurant design that showcases televised sporting events and “feels like being in a stadium,” CEO Sally Smith told investors yesterday. The layout will encourage customers to settle into a game—sipping beers and sharing snacks or apps as they do, of course.

Adaptation is not underappreciated by the casual darling, either. As Smith explained, poultry producers are growing bigger birds today, which means the wings are meatier, too. A pound will contain fewer wings, yet the price is also rising because of feed-cost issues. That means BWW would have to really jack up its prices for a six- or 12-wing order if it wanted to protect margins.

Instead, it’s experimenting with a new wing formation. Instead of selling a certain number of wings, the chain is testing a variable count. You might get five in one order, six in another, or even four in yet another.

It’s the same approach seafood places take when they sell crab legs or other pricey proteins by the pound. Guests are told that an order typically ranges from four to six legs, say, but there’s no set count.

Of course, BWW can’t turn every challenging situation into an opportunity. Last year the franchisor’s stores in Texas greatly benefited from the playoff and World Series appearances of the Texas Rangers. This year the four teams that made it to the league championship series weren’t in company-run markets, though the franchisees in those areas still got a payoff.

Elsewhere in the industry, a new term is cropping up: pack-and-go, the tag for selling holiday meal packages at Thanksgiving, Christmas, Easter and the like.

I’m on the hunt for chains that are taking that approach to the booming tailgate market this football season. Alumni of big colleges tell me I’m chasing a snape; any true-blooded tailgater would never dream of putting out a store-bought pre-game spread in the parking lot.

Still, I wonder if that’s an opportunity waiting to be exploited.

Monday, October 8, 2012

New chapter in the marketing handbook?

Regardless of what you sell, don’t miss the splendid marketing battle that’s forming between two giants of casual dining. It’s an education in how the behemoths of a segment can change the competitive dynamics for all players through volume alone. And don’t be surprised if it leaves a lasting influence on the whole industry, just as one of the tactics forever changed the shoe and eyeglass businesses.

The fracas started late last week when Olive Garden forged ahead with a strategy to re-invigorate the don of the casual Italian market. In recent months, the Darden Restaurants brand had struggled as consumers gave more weight to quality, healthfulness and other considerations in their assessments of a dining-out value. Olive Garden decided that it had to be more things to more people, instead of just targeting bargain-hunters.

The result was a passel of new initiatives trumpeted through the chain’s first new ad campaign in a decade. Themed Go Olive Garden, the program addresses splinters of the market that the brand might have drifted away, like the health-conscious, or the more sophisticated wine drinker.

But it didn’t forget the value-sensitive patrons who made the chain such a stellar success. They were informed of a new limited-time deal that sounds conspicuously like the one arch-rival Maggiano’s has been offering for three years: Buy an entrée from a certain section of the menu and you can choose a second selection at no extra cost to take home. The price of the Dinner Today & Dinner Tomorrow promo: $12.95.

Just as the ads for the limited-time offer started to air, Maggiano’s countered with a noteworthy twist to its two-for-one, dine in/take-home deal. For a limited time, the Brinker International chain will provide a third meal to a charity for every two-for-one Classic Pasta dish that’s purchased. The offer will run until 1 million meals have been given away, Maggiano’s explained.

The new age BOGO—Buy One, Give One—was the point of differentiation that turned the online retailer TOMS Shoes into a major force in the footwear business. So many consumers warmed to the idea of doing good while buying a pair of loafers that other shoe sellers had to copy the idea.

TOMS has since branched into the eyeglass business, taking its One for One slogan with it. It has company there in Warby Parker, an online retailer that similarly donates a pair of frames for every set that’s sold. If the popularity of those glasses within our offices are any indication, the strategy has been a slam-dunk.

Which leaves us with several important questions for restaurants: Will buy one/take one become a new standard for broad-market Italian chains—the ante they’ll have to absorb if they want to compete with Olive Garden, Maggiano’s, and whatever other national chains follow suit?

And what about the buy one/donate one tactic? Will that proven draw be the next two-entrees-for-$20 deal for casual chains? And why wouldn’t the same offer work for virtually any restaurant?

'McDonald's on aisle 9'? Really?

The business world caught a caffeine buzz last week when fellow blogger Scott Hume broke the story that McDonald’s had trademarked the use of its name for ground and whole-bean coffee. Did that mean we’d soon see McDonald’s-brand coffee on store shelves, next to the brew-at-home options of Starbucks, Dunkin’ Donuts and Peet’s?

There wouldn’t have been such an outpouring of coverage if market watchers weren’t leaning strongly toward a yes. If they’re right, we’re witnessing an historic departure for McDonald’s, a company that learned the pratfalls of entering new businesses just a few years ago.

Remember Hearth Express, McDonald’s answer to Boston Market? How about McDonald’s with a Diner Inside, the chain’s foray into full service? Don’t forget Aroma, the British coffee chain that was briefly a part of its portfolio—along with controlling interests in Chipotle Mexican Grill, Boston Market, Pret A Manger and Fazoli’s.

Today the company laments that period of experimentation as the time its focus shifted from being the best to being merely bigger. Investors know the price that was paid in sales and profits.

Entering the grocery business, even though a third-party licensing deal, is more of a departure than any of those alternate restaurant plays. Yes, McDonald’s has licensed its name before, but for use on toys, clothes and merchandise, not food.

This time, the name would not only go on a consumable, but something that customers consume in McDonald’s-brand restaurants. And that could sour what insiders agree is really the fast-food giant’s secret sauce: Its franchisees.

Carvel learned the risk several decades ago when the franchisor started selling frozen cakes through supermarkets. Franchisees grabbed a noose and started looking for a stout branch outside the chain’s headquarters at the time (the brand was subsequently sold.) They felt the home office was raiding their protected turf. Wouldn’t consumers feel less of a need to visit units if shoppers could buy the brand’s products along with their cornflakes, bread and lettuce?

The same thing happened when chains of all stripes started shoehorning corporate stores into non-traditional sites like sports arenas, colleges and airports. As franchisees explained to their lawyers, they supposedly had the exclusive rights to sell the brand’s food in their area. What was this “captive site” malarkey?

I have trouble believing that McDonald’s would risk a similar outcry and revolt from its franchisees, truly the backbone of the chain.

Maybe it’s developed a new licensing model where franchisees would get a significant share of grocery proceeds. But a more likely explanation is that the chain wants to hold open the possibility of selling bagged coffee through its own stores, not a Kroger or a Piggly Wiggly.

McDonald’s, after all, is a global-scale toy retailer. Those transactions take place in the chain’s units, not in a Toys “R” Us.

It’s also an avid student of Starbucks. Witness the McCafe coffee program, or new designs that encourage customers to hang out for awhile and enjoy a beverage as they surf the internet. Why not follow the coffee giant’s lead in merchandising and selling products for home-use, too?

All in all, I’ll put my money on in-store sales, not a McDonald’s section of your local supermarket.

Wednesday, October 3, 2012

When the message gets pissy

Looks like all those negative campaign ads are having an effect on restaurant advertising. Consider, for instance, the mud that’s slung in the new commercials from Arby’s and Domino’s.  

Both chains take aim in the spots at supposedly anonymous competitors that even a dim-witted hermit from the planet Zargon couldn’t mistake as anything but what they are. The target for Arby’s, for instance, is obviously a sandwich chain, with a green logo that’s blurred out but still easy identifiable as “Subway.”

On camera is a retired New York City police detective who explains that he’s uncovered the truth about deli-meat slicing.  The real-life detective then takes viewers to a Midwestern factory-like facility to show where the sandwich meats for the not-so-anonymous green-logged chain is actually sliced. Cut to visuals of turkey being sliced in-store for Arby’s currently promoted sandwich line.

Domino’s is a bit slyer in its approach. Commercials for the delivery giant’s new pan pizzas, a product pitted directly against Pizza Hut’s signature pie, play up Domino’s use of hand-tossed freshly made dough, not the frozen globs that competitors use. The radio commercial acknowledges that frozen dough has its place; you hear a skeet shooter talking about the viability of using the frozen dough balls as clay pigeons.

Comparative advertising is of course not new to the restaurant business. But with sales still proving sluggish at best, and share of market still reigning as a goal, it’s not surprising that us-vs.-them campaigns would gain favor. The difference is the edge evident in campaigns like Arby’s, and the focus on aspects of a meal that are truly back-of-the-house factors, like the state of pizza dough or how meat is sliced.

In both case, the emphasis is on freshness, which infers a better taste, rather than on the taste per se.

And the spots are consistent with the overriding trend in chain foodservice: Better, in this case defined as fresher and more artisanal in a way.

Look for more brands to follow a similar strategy.