Consider how prominently the emerging sector figures into Restaurant Business’ Future 50 report, an annual listing of the fastest-growing small-to-mid-sized chains (defined by Technomic as having $25 million to $50 million in sales.) In past years, the ranking abounded in concepts that are now major parts of the mosaic, like better-burger joints, Korean-style fro-yo shops, or wings-and-beer specialists. None of those were as prevalent this year as polished casual chains. Six were on our just-published list, including Cru—A Wine Bar, Burtons Grill, Stanford’s, and Cooper’s Hawk.
Simultaneously, the greybeards of mainstream casual dining are charging upmarket into the polished tier. Look at the new siblings of Red Lobster and Olive Garden: Eddie V’s (No. 15 on our Future 50 list) and Wildfish Seafood Grille, which Darden Restaurants purchased in a surprise deal. These aren’t the sorts of places where blue collar consumers pack the booths for an all-you-can-eat crab deal.
They’re more in the level of Seasons 52, Darden Restaurants’ California wine bar and seasonal specialist.
Ruby Tuesday, meanwhile, is developing an upscale licensed concept called Truffles Cafe, while switching some of its old and tired namesake restaurants to a new, fresher, more polished brand called Marlin and Ray’s.
Clearly investors are attracted to the sector. Bill Foley, for instance, is purchasing J. Alexander’s after adding Stony River Legendary Steaks to the portfolio through the acquisition of O’Charley’s.
And Centerbridge Partners, a private-equity firm, is in the process of buying P.F. Chang’s.
It’s easy to understand why the action is shifting to the polished strata of casual dining. There’s more of an emphasis on wine and liquor sales, and the food portion of the ticket is considerably higher, yielding better returns on the considerable investment in a sizeable restaurant.
But the real driver might be the trend in consumer tastes, which can be summed up in one word: Better. Better burgers, better coffee, better beer, better cupcakes, better burritos. Why not better dining in a casual setting?
It’s the same dynamic that’s remaking the quick-service sector. Everyone wants to be in fast-casual, even longtime traditionalists like Taco Bell, Fazoli’s and Pizza Inn.
Polished casual truly is the fast-casual of casual.