Never mind the fireworks. The boom that should’ve had restaurant executives covering their ears last week was the bombshell observation by the company that runs Olive Garden.
The comment slipped past almost unnoticed during a routine presentation to Wall Street analysts. That’s ironic, since the aside was a DefCon 4 alert for casual dining to reassess what market it serves.
Most of that sector stands in awe of Olive Garden, a concept whose middle American take on Italian fare generates $4.8 million in sales per restaurant, much of it from high-margin pasta choices. But lately, the bloom has been off the rosè.
Sales have uncharacteristically stagnated for the brand, while sister concepts like Red Lobster, LongHorn and Capital Grille have enjoyed the sort of same-store sales increases (3.8%, 6% and 7.9%, respectively) that make you suspect steroid use.
“It’s worth noting,” observed Darden president and COO Drew Madsen, “that we’re continuing to see a narrowing in the casual-dining user base.”
He explained that the percentage of customers from households with an annual income of at least $75,000 “has significantly increased their share of traffic, both during the recession and after.” Not coincidentally, patrons from homes with paychecks of $60,000 now account for an appreciably smaller part of Darden’s clientele.
Madsen didn’t specify if the rising share of traffic was the result of an increase in visits by the higher-income group, or of a drop-off by the lower-income crowd. Even when pressed by financial analysts participating in the call, he and other Darden officials would only talk in terms of “share of traffic,” not absolute changes in visits by either group.
They were more forthcoming about the implications of the shift. To appeal to both the higher-income customer and the one with less than $60,000 in annual income, Olive Garden will strive to deliver what the execs termed “price certainty,” or a clearer idea of what a customer will pay.
“Customers aren't looking for a discount,” explained Clarence Otis, Darden’s CEO. “But they want to kind of know a little bit more, with a little bit more precision, what they're going to spend when they choose to go out.”
The execs noted that a similar strategy has worked well for Red Lobster. They cited the example of the seafood chain’s current promotional deal, a four-course meal for $15 per person.
Madsen noted that Olive Garden will take a more tactical approach with its advertising in the near future, delivering more of a “short-term call to action” than “longer-term equity building.” Deals will also give a set price, rather than the “starting at” level of past promotions.
Showing posts with label Red Lobster. Show all posts
Showing posts with label Red Lobster. Show all posts
Tuesday, July 5, 2011
Saturday, October 9, 2010
Ruby Tuesday's new seafood concept
As if Ruby Tuesday didn’t have enough choices on its menu of development options, the casual-dining giant is prepping one more type of restaurant it can use to replace weak namesake stores. The company alerted investors earlier this week that it will open a “seafood health concept” later this year.
Management didn’t divulge the name or many particulars about the venture, saying only that it would be one more option for salvaging underperforming Ruby Tuesday sites. Executives lumped it together with the two replacement concepts that were identified earlier, Jim ‘n Nicks and Truffles.
Like those, they explained, the seafood restaurant could replace a played-out Ruby Tuesday at a cost of under $500,000, and generate annual revenues of more than $1 million.
CEO Sandy Beall explained that 23% of a Ruby Tuesday’s guests, or roughly one in four, already order seafood. “It’ll just be a more seafood-oriented Ruby Tuesday, really,” he said during the conference call with analysts. “And it’s very relevant based on what people are eating and their health and so forth.”
The big benefit, he said, would be differentiation from all the other so-called grill-and-bar concepts, like Chili’s, T.G.I. Friday’s and Applebee’s
An analyst voiced his concern that Ruby Tuesday would be entering a sector where even long-established brands are facing considerable challenges. “We can all think of the biggest fish in the sea who is struggling with difficult trends,” said Robert Derrington, the restaurant analyst for Morgan, Keegan. He didn’t name that brand, Red Lobster, by name.
He noted, however, that Ruby Tuesday had experience with seafood restaurants.
Yes, said Beall. The company ran the L&N Seafood Grill chain when both casual-dining brands were part of Morrison, a large contract-feeding company.
Investors also heard the Ruby’s plan to use several young concepts as its expansion vehicles. It recently secured rights to develop units of Lime Fresh Mexican Grill, a fast-casual chain that currently has six stores open.
“As far as the economics go, it's really very, very similar to Chipotle,” said chief marketing officer Mark Young.
Wok Hay, a fast-casual brand that Ruby’s acquired several years ago and subsequently upgraded into a full-service operation, wasn’t mentioned. Ruby had cited it several months ago as a possible replacement concept for tired Ruby Tuesday outlets. It also cited it at that time as a restaurant that could be built on new sites.
Meanwhile, management noted that the first Jim ‘n Nicks is open and generating sales that should top $1.5 million on an annual basis.
They said Ruby’s first Truffles, an upscale casual format, would open next month.
Management didn’t divulge the name or many particulars about the venture, saying only that it would be one more option for salvaging underperforming Ruby Tuesday sites. Executives lumped it together with the two replacement concepts that were identified earlier, Jim ‘n Nicks and Truffles.
Like those, they explained, the seafood restaurant could replace a played-out Ruby Tuesday at a cost of under $500,000, and generate annual revenues of more than $1 million.
CEO Sandy Beall explained that 23% of a Ruby Tuesday’s guests, or roughly one in four, already order seafood. “It’ll just be a more seafood-oriented Ruby Tuesday, really,” he said during the conference call with analysts. “And it’s very relevant based on what people are eating and their health and so forth.”
The big benefit, he said, would be differentiation from all the other so-called grill-and-bar concepts, like Chili’s, T.G.I. Friday’s and Applebee’s
An analyst voiced his concern that Ruby Tuesday would be entering a sector where even long-established brands are facing considerable challenges. “We can all think of the biggest fish in the sea who is struggling with difficult trends,” said Robert Derrington, the restaurant analyst for Morgan, Keegan. He didn’t name that brand, Red Lobster, by name.
He noted, however, that Ruby Tuesday had experience with seafood restaurants.
Yes, said Beall. The company ran the L&N Seafood Grill chain when both casual-dining brands were part of Morrison, a large contract-feeding company.
Investors also heard the Ruby’s plan to use several young concepts as its expansion vehicles. It recently secured rights to develop units of Lime Fresh Mexican Grill, a fast-casual chain that currently has six stores open.
“As far as the economics go, it's really very, very similar to Chipotle,” said chief marketing officer Mark Young.
Wok Hay, a fast-casual brand that Ruby’s acquired several years ago and subsequently upgraded into a full-service operation, wasn’t mentioned. Ruby had cited it several months ago as a possible replacement concept for tired Ruby Tuesday outlets. It also cited it at that time as a restaurant that could be built on new sites.
Meanwhile, management noted that the first Jim ‘n Nicks is open and generating sales that should top $1.5 million on an annual basis.
They said Ruby’s first Truffles, an upscale casual format, would open next month.
Friday, June 25, 2010
It's the service, stupid
Industry savants often tout better service as casual dining’s best defense against challengers like fast-casual chains and retail food outlets. Certainly it’s now the front-and-center strategy of dress-down dining’s biggest and perhaps savviest combatant, the parent of the Red Lobster and Olive Garden chains.
Darden Restaurants explained to investors yesterday that service enhancements will figure prominently in near-term efforts to boost the sales performances of Red Lobster, Olive Garden and the company’s starched-linen concept, Capital Grille. But the initiatives vary greatly in their focus and what aspect of the customer experience they aim to improve.
Olive Garden, for instance, will try to do a better job of estimating and minimizing the wait times for a table. You can infer that part of the mission is sparing guests the teeth-gnashing experience of waiting an hour for a table that was supposedly 20 minutes away from being reset. But the overriding goal is serving more customers during peak periods.
Red Lobster’s program, called VIP Service, is more focused on the customer, judging from the description served up by Darden president Drew Masden. The objective there is discerning why a party is dining with the chain on any particular night and adjusting service accordingly.
That customized approach is similar to the strategy Brinker International set for its Chili’s chain in a recent service overhaul. As Brinker executives explained beforehand, sometimes a couple is rushing to make a movie and appreciate speed of service more than anything. Other times they’re kicking back and looking to enjoy a few drinks and a leisurely meal, with no sense of urgency about rescuing the baby sitter. The art is catering to the guest’s state of mind.
The emphasis on attitude-reading might be termed the Danny Meyer Method, after the famed New York restaurateur. His servers say they’re coached on deciphering the body language of customers to discern who’s in a rush, who’s hunkering down, who’s ready for the check, and who needs another drink.
Different still is the program being undertaken by Capital Grille, Darden’s Eden for meat eaters in suits. The objective there, explained chain chief Gene Lee, is alleviating unpleasant surprises for the chain’s top 10,000 customers. Step One, he indicated, is identifying who those patrons are. Phase II is making sure they have a consistent experience as they dine in Capital Grilles throughout the world.
That initiative might be a tip of the hat to Morton’s, a direct competitor that’s renowned for its consistency, to the point of being dubbed by some as the McDonald’s of steak.
Lee also cryptically cited an effort to communicate with those VIP customers in the ways they prefer. Without saying as much, he strongly suggested that their reservations would be confirmed through methods like e-mail or texting, rather than a phone call.
The execs comments came in yesterday’s conference call with analysts, as reported in a transcript provided by SeekingAlpha.com.
Darden Restaurants explained to investors yesterday that service enhancements will figure prominently in near-term efforts to boost the sales performances of Red Lobster, Olive Garden and the company’s starched-linen concept, Capital Grille. But the initiatives vary greatly in their focus and what aspect of the customer experience they aim to improve.
Olive Garden, for instance, will try to do a better job of estimating and minimizing the wait times for a table. You can infer that part of the mission is sparing guests the teeth-gnashing experience of waiting an hour for a table that was supposedly 20 minutes away from being reset. But the overriding goal is serving more customers during peak periods.
Red Lobster’s program, called VIP Service, is more focused on the customer, judging from the description served up by Darden president Drew Masden. The objective there is discerning why a party is dining with the chain on any particular night and adjusting service accordingly.
That customized approach is similar to the strategy Brinker International set for its Chili’s chain in a recent service overhaul. As Brinker executives explained beforehand, sometimes a couple is rushing to make a movie and appreciate speed of service more than anything. Other times they’re kicking back and looking to enjoy a few drinks and a leisurely meal, with no sense of urgency about rescuing the baby sitter. The art is catering to the guest’s state of mind.
The emphasis on attitude-reading might be termed the Danny Meyer Method, after the famed New York restaurateur. His servers say they’re coached on deciphering the body language of customers to discern who’s in a rush, who’s hunkering down, who’s ready for the check, and who needs another drink.
Different still is the program being undertaken by Capital Grille, Darden’s Eden for meat eaters in suits. The objective there, explained chain chief Gene Lee, is alleviating unpleasant surprises for the chain’s top 10,000 customers. Step One, he indicated, is identifying who those patrons are. Phase II is making sure they have a consistent experience as they dine in Capital Grilles throughout the world.
That initiative might be a tip of the hat to Morton’s, a direct competitor that’s renowned for its consistency, to the point of being dubbed by some as the McDonald’s of steak.
Lee also cryptically cited an effort to communicate with those VIP customers in the ways they prefer. Without saying as much, he strongly suggested that their reservations would be confirmed through methods like e-mail or texting, rather than a phone call.
The execs comments came in yesterday’s conference call with analysts, as reported in a transcript provided by SeekingAlpha.com.
Friday, March 12, 2010
Who should be buying Carl's Jr.
I’m sure the Vegas odds-makers are already taking action on who'll be the next owner of Carl’s Jr. and Hardee’s, the two main brands in the portfolio of CKE Restaurants. Thomas H. Lee is the favorite, with a deal already on the table to buy it for about $928 million, including debt. Then came word yesterday that Nelson Peltz, the bwana who deftly bagged Wendy’s in 2008, was giving CKE’s slightly bald radials a kick.
They may be the most likely buyers. I keep thinking about who might be the most appropriate buyer, from the standpoint of all parties concerned.It makes me wonder if the big casual-dining companies have the Poppers to reconsider their longstanding pledge never to veer out of that market.
It’s almost a reflex with concerns like Darden, Brinker and OSI (the parents of Red Lobster, Chili’s and Outback Steakhouse, respectively). Ask what new businesses might be a worthwhile acquisition or start-up and they’ll invariably conclude with, “…and of course it’d have to be something in casual dining, since that's where we want to stay.”
Meanwhile, they’re having their turnips mashed by quick-service and fast-casual concepts.
They should consider the bold move of buying a quick-service brand and supercharging it with their casual know-how to create the ultimate fast-casual player—a contender genetically engineered to provide cloth-napkin-caliber service and food, with the value, speed and less-processed foods that have established concepts like Panera and Chipotle as the brands of choice among younger consumers. It’d be the veritable Mike Tyson of the sector.
Carl’s would be the perfect subject for the experiment. It’s been trash-talking for years that it offers a burger comparable to what patrons would find in a casual restaurant, for less than two-thirds of the price. To launch the Six Dollar Burger (it actually sells for under $4), the chain even set up a fake restaurant where patrons were charged $6 for the sandwich. Patrons paid without complaint.
Sure, the acquisition would put those casual-dining giants squarely in franchising, a realm where they’ve at most dabbled before, preferring to grow through corporate development and joint ventures. But their current business models aren’t exactly the envy of the business world. Becoming full-fledged franchisors would really open the valve on cash flow.
Meanwhile, the Carl’s and Hardee’s systems would greatly benefit from the training, research and awesome support services provided by the likes of Darden and Brinker.
It’s a deal casual-dining hunter and quick-service should pursue, especially when you consider that CKE might change hands for just over $1 billion. It’s a buyer’s market, to be sure.
They may be the most likely buyers. I keep thinking about who might be the most appropriate buyer, from the standpoint of all parties concerned.It makes me wonder if the big casual-dining companies have the Poppers to reconsider their longstanding pledge never to veer out of that market.
It’s almost a reflex with concerns like Darden, Brinker and OSI (the parents of Red Lobster, Chili’s and Outback Steakhouse, respectively). Ask what new businesses might be a worthwhile acquisition or start-up and they’ll invariably conclude with, “…and of course it’d have to be something in casual dining, since that's where we want to stay.”
Meanwhile, they’re having their turnips mashed by quick-service and fast-casual concepts.
They should consider the bold move of buying a quick-service brand and supercharging it with their casual know-how to create the ultimate fast-casual player—a contender genetically engineered to provide cloth-napkin-caliber service and food, with the value, speed and less-processed foods that have established concepts like Panera and Chipotle as the brands of choice among younger consumers. It’d be the veritable Mike Tyson of the sector.
Carl’s would be the perfect subject for the experiment. It’s been trash-talking for years that it offers a burger comparable to what patrons would find in a casual restaurant, for less than two-thirds of the price. To launch the Six Dollar Burger (it actually sells for under $4), the chain even set up a fake restaurant where patrons were charged $6 for the sandwich. Patrons paid without complaint.
Sure, the acquisition would put those casual-dining giants squarely in franchising, a realm where they’ve at most dabbled before, preferring to grow through corporate development and joint ventures. But their current business models aren’t exactly the envy of the business world. Becoming full-fledged franchisors would really open the valve on cash flow.
Meanwhile, the Carl’s and Hardee’s systems would greatly benefit from the training, research and awesome support services provided by the likes of Darden and Brinker.
It’s a deal casual-dining hunter and quick-service should pursue, especially when you consider that CKE might change hands for just over $1 billion. It’s a buyer’s market, to be sure.
Tuesday, November 10, 2009
Is salmon the new twofer?
Forget sliders, bundled meals and mini desserts. The hook for restaurant bargain hunters is being re-baited these days with lobster, crab and salmon.
Those are among the lures Ruby Tuesday is flycasting with its much-publicized new menu (the bill of fare landed lengthy features from The New York Times and AOL). The dinnerhouse chain added a lobster tail in late summer. Now it’s mixed the pricey protein into several dishes, including a classic surf and turf platter. Two tails share the plate with a seven-ounce sirloin, vegetables and a potato. This isn’t your two-dinners-for-$20 draw.
Nor is the new lump-meat crab cake, or the just-added Salmon Florentine platter. The chain is betting that a special-occasion dinner priced at an everyday rate—relatively speaking—will still be taken as a deal by consumers obsessed with economy.
It’s the credo being followed with considerable success by Panera Bread Co. Not coincidentally, the bakery-café chain has also used lobster as a draw, albeit a regional one. This summer units in the New England area offered a half-pound lobster salad sandwich for about $17 (at least in my area). CEO Ron Shaich explained at the time that the chain was focusing on the 90% of consumers who were employed, not the 10% that lost or couldn’t find a job.
Now, Shaich told investors last month, the chain is adding salmon, both as a sandwich and salad ingredient. He noted that the addition will boost profits while presenting customers with another high-quality choice.
Salmon is already on the menu of Panera’s arch-competitor (and Shaich’s former charge), the Au Bon Pain bakery-café chain. It recently added a sandwich of smoked salmon, egg and guacamole. Already on the menu was a breakfast sandwich of smoked salmon and wasabi, served on an onion dill bagel.
Touting quality in a pitch for deal hunters is a risky strategy, as Cheesecake Factory can attest. It’s a casual-dining leader in quality and portion size, yet it had to re-engineer the tome it calls a menu to include more straightforward bargains. Virtually every other casual chain has done the same, to varying degrees.
But there are signs the approach can work. Ruby Tuesday’s lobster tails, for instant, were generating 3% of a typical restaurant’s sales at the end of August, according to CEO Sandy Beall. That’s at a price falling between $17 and $19, he noted to financial analysts a few weeks ago.
He noted at the time that the chain’s emphasis on quality was helping to boost check averages, the Holy Grail for an industry limping through a steep drop off in customers.
Panera told the Wall Street Journal for a mid-August feature that its hefty lobster sandwich was selling well, but balked at disclosing the specifics.
Will it work? Well, there’s a reason chains have to give away new menu items to get them tasted. A quality item for a reasonable price has its appeal. But the absolute dollars are still going to be a yellow light for those of us who no longer find ourselves in a position to dine out regularly.
Those are among the lures Ruby Tuesday is flycasting with its much-publicized new menu (the bill of fare landed lengthy features from The New York Times and AOL). The dinnerhouse chain added a lobster tail in late summer. Now it’s mixed the pricey protein into several dishes, including a classic surf and turf platter. Two tails share the plate with a seven-ounce sirloin, vegetables and a potato. This isn’t your two-dinners-for-$20 draw.
Nor is the new lump-meat crab cake, or the just-added Salmon Florentine platter. The chain is betting that a special-occasion dinner priced at an everyday rate—relatively speaking—will still be taken as a deal by consumers obsessed with economy.
It’s the credo being followed with considerable success by Panera Bread Co. Not coincidentally, the bakery-café chain has also used lobster as a draw, albeit a regional one. This summer units in the New England area offered a half-pound lobster salad sandwich for about $17 (at least in my area). CEO Ron Shaich explained at the time that the chain was focusing on the 90% of consumers who were employed, not the 10% that lost or couldn’t find a job.
Now, Shaich told investors last month, the chain is adding salmon, both as a sandwich and salad ingredient. He noted that the addition will boost profits while presenting customers with another high-quality choice.
Salmon is already on the menu of Panera’s arch-competitor (and Shaich’s former charge), the Au Bon Pain bakery-café chain. It recently added a sandwich of smoked salmon, egg and guacamole. Already on the menu was a breakfast sandwich of smoked salmon and wasabi, served on an onion dill bagel.
Touting quality in a pitch for deal hunters is a risky strategy, as Cheesecake Factory can attest. It’s a casual-dining leader in quality and portion size, yet it had to re-engineer the tome it calls a menu to include more straightforward bargains. Virtually every other casual chain has done the same, to varying degrees.
But there are signs the approach can work. Ruby Tuesday’s lobster tails, for instant, were generating 3% of a typical restaurant’s sales at the end of August, according to CEO Sandy Beall. That’s at a price falling between $17 and $19, he noted to financial analysts a few weeks ago.
He noted at the time that the chain’s emphasis on quality was helping to boost check averages, the Holy Grail for an industry limping through a steep drop off in customers.
Panera told the Wall Street Journal for a mid-August feature that its hefty lobster sandwich was selling well, but balked at disclosing the specifics.
Will it work? Well, there’s a reason chains have to give away new menu items to get them tasted. A quality item for a reasonable price has its appeal. But the absolute dollars are still going to be a yellow light for those of us who no longer find ourselves in a position to dine out regularly.
Sunday, September 27, 2009
A new concept headed for Darden's menu?
Is Darden considering an addition to its restaurant empire?
The parent of Red Lobster is moving this Wednesday into new headquarters elsewhere in Orlando, its home turf for the last 40 years, according to an Orlando Sentinel story. Included in the facility, says the article, are six test kitchens and the space to house a seventh. Each will serve a different concept, the piece notes.
In addition to Red Lobster, Darden’s holdings include Olive Garden, Capital Grille, LongHorn Steakhouse, Bahama Breeze and Seasons 52. Their R&D facilities will be firing up their grills in a few days. But why reserve space for a seventh? Is Darden shopping for an acquisition, or perhaps starting the in-house development of something new?
Setting aside space for expansion is hardly proof an addition is a “go.” It’s more like a young family buying a house with a spare bedroom, just in case.
But the article also notes that Darden has to add 400 positions at the new building by 2014 to earn the full tax benefits of the relocation. That’s on a base of 1,260 jobs currently housed there.
That would be a tremendous amount of organic growth, even if Seasons 52, the company’s youngest concept, really zooms cross-country.
And there’s no shortage of acquisition candidates in this buyer’s market. The last expansion of Darden’s portfolio was the purchase of Rare Hospitality, the parent of Capital Grille and LongHorn.
Speculating on possible additions is tough with Darden. Although the company is very conservative, its new concepts have been downright bold. Few would have bet it’d try a healthful concept featuring fresh, seasonal produce, as it did—undoubtedly with great success—with Seasons 52. Ditto with Bahama Breeze, still one of the industry’s few chained Caribbean concepts.
But who can resist making their wild-haired predictions. If Darden were looking to add concepts, I wonder if a burger concept, an everyday grill sort of place, would be one of types on the list. Ditto for an upscale Mexican place, with bold flavors and simple, even healthful preparations.
So, if you live in Orlando, please give a shout if catch the aroma of chipotles wafting out of the new headquarters.
The parent of Red Lobster is moving this Wednesday into new headquarters elsewhere in Orlando, its home turf for the last 40 years, according to an Orlando Sentinel story. Included in the facility, says the article, are six test kitchens and the space to house a seventh. Each will serve a different concept, the piece notes.
In addition to Red Lobster, Darden’s holdings include Olive Garden, Capital Grille, LongHorn Steakhouse, Bahama Breeze and Seasons 52. Their R&D facilities will be firing up their grills in a few days. But why reserve space for a seventh? Is Darden shopping for an acquisition, or perhaps starting the in-house development of something new?
Setting aside space for expansion is hardly proof an addition is a “go.” It’s more like a young family buying a house with a spare bedroom, just in case.
But the article also notes that Darden has to add 400 positions at the new building by 2014 to earn the full tax benefits of the relocation. That’s on a base of 1,260 jobs currently housed there.
That would be a tremendous amount of organic growth, even if Seasons 52, the company’s youngest concept, really zooms cross-country.
And there’s no shortage of acquisition candidates in this buyer’s market. The last expansion of Darden’s portfolio was the purchase of Rare Hospitality, the parent of Capital Grille and LongHorn.
Speculating on possible additions is tough with Darden. Although the company is very conservative, its new concepts have been downright bold. Few would have bet it’d try a healthful concept featuring fresh, seasonal produce, as it did—undoubtedly with great success—with Seasons 52. Ditto with Bahama Breeze, still one of the industry’s few chained Caribbean concepts.
But who can resist making their wild-haired predictions. If Darden were looking to add concepts, I wonder if a burger concept, an everyday grill sort of place, would be one of types on the list. Ditto for an upscale Mexican place, with bold flavors and simple, even healthful preparations.
So, if you live in Orlando, please give a shout if catch the aroma of chipotles wafting out of the new headquarters.
Thursday, January 22, 2009
New trend in marketing: Flipping lawyers the bird
Another day, another restaurant commercial that plays off a cease-and-desist letter. This one has Domino’s CEO David Brandon refusing to comply with a directive from lawyers for Subway, whose sandwiches fared poorly in taste comparisons with the pizza chain’s new oven-baked subs. The new spot shows Brandon incinerating the demand that his chain stop airing commercials based on the taste tests. Fittingly, he uses one of the ovens in which the new Domino’s subs are baked.
“This is as much fun as a good, old-fashioned school cafeteria food fight,” Brandon declares in a statement, even though you can sense he’s never tossed a hotdog or flung a dish of Jello in his life. I’d bet his idea of high school hijinks was reading in bad light.
But you have to give him (or his PR person) credit for adding, “I think I did what any red-blooded American always wants to do with a letter from a lawyer: burn it to a crisp.”
Indeed, rebellion against lawyers is very “in” in restaurant marketing right now. Yesterday brought Captain D’s new anti-C-and-D spot, where a spokesman shreds a cease-and-desist communication from counselors for Darden Restaurants, parent of the Red Lobster sit-down seafood chain. Captain D’s has been featuring Lobster patrons in a spot that unfavorably compares the full-service chain’s value to what’s offered at the smaller fast-food operation. The ad, like the new commercial that shows the letter being destroyed, is shot in front of a Red Lobster.
Like Captain D’s, Domino’s is refusing to pull its comparative spots, which assert that consumers preferred its sandwiches 2-to-1 over Subway’s specialties in a taste comparison.
If this keeps up, lawyers are going to start levying a creative-services fee. And then sue if they don't get it.
Subway has not yet publicly responded to the new Domino's commercials, which started airing last night on "American Idol."
“This is as much fun as a good, old-fashioned school cafeteria food fight,” Brandon declares in a statement, even though you can sense he’s never tossed a hotdog or flung a dish of Jello in his life. I’d bet his idea of high school hijinks was reading in bad light.
But you have to give him (or his PR person) credit for adding, “I think I did what any red-blooded American always wants to do with a letter from a lawyer: burn it to a crisp.”
Indeed, rebellion against lawyers is very “in” in restaurant marketing right now. Yesterday brought Captain D’s new anti-C-and-D spot, where a spokesman shreds a cease-and-desist communication from counselors for Darden Restaurants, parent of the Red Lobster sit-down seafood chain. Captain D’s has been featuring Lobster patrons in a spot that unfavorably compares the full-service chain’s value to what’s offered at the smaller fast-food operation. The ad, like the new commercial that shows the letter being destroyed, is shot in front of a Red Lobster.
Like Captain D’s, Domino’s is refusing to pull its comparative spots, which assert that consumers preferred its sandwiches 2-to-1 over Subway’s specialties in a taste comparison.
If this keeps up, lawyers are going to start levying a creative-services fee. And then sue if they don't get it.
Subway has not yet publicly responded to the new Domino's commercials, which started airing last night on "American Idol."
Wednesday, January 21, 2009
Splash fight!!!
After rankling Red Lobster by telling its patrons they’re wasting money, the Captain D’s fast-food chain is kicking more sand in the full-service giant’s face. It announced today that it’s defying a cease and desist letter issued by the larger chain’s parent, the mega-sized Darden Restaurants Inc., to halt a commercial that enlists Red Lobster customers in a slam of the brand’s higher prices.
Captain D’s even set up a website, http://www.irefusetoceaseanddesist.com, to rub it in—and ride whatever publicity it can generate with the David-versus-Goliath ploy. The webpage promises a “I refuse to cease and desist” T-shirt to the first 1,000 visitors who register their sympathies with Captain D’s.
“All we wanted to do was show that you could get delicious sit-down quality seafood at a much lower price,” says the star of a video on the site. The spokesman then rips up a copy of the letter. Throughout the video, he’s standing in front of a Red Lobster.
The crux of the dispute is a commercial where the same Captain D’s spokesman intercepts people as they come out of a Red Lobster. He invites them to a nearby screened-off area where they’re shown what they could’ve gotten at Captain D’s for what they just paid at Red Lobster. The people are invited to taste the platters spread before them. “That’s the same thing we just ate,” said one of the Red Lobster customers, pointing to the unit behind him.
Captain D’s doesn’t mention that it refused to participate in a review of the commercial by the National Advertising Division of the Better Business Bureau, a step requested on the basis of Darden’s objections. The full-service giant pointed out to NAD that the spot cites what the patrons paid in total at the Red Lobster, including taxes, beverages and tips. Those additional charges aren’t factored into what Captain D’s asserts the Red Lobster customers could’ve gotten at the quick-service chain for the same tab.
The NAD reportedly referred the matter late last year to the Federal Trade Commission.
Captain D’s is a holding of Sagittarius Brands, which also owns Del Taco.
Captain D’s even set up a website, http://www.irefusetoceaseanddesist.com, to rub it in—and ride whatever publicity it can generate with the David-versus-Goliath ploy. The webpage promises a “I refuse to cease and desist” T-shirt to the first 1,000 visitors who register their sympathies with Captain D’s.
“All we wanted to do was show that you could get delicious sit-down quality seafood at a much lower price,” says the star of a video on the site. The spokesman then rips up a copy of the letter. Throughout the video, he’s standing in front of a Red Lobster.
The crux of the dispute is a commercial where the same Captain D’s spokesman intercepts people as they come out of a Red Lobster. He invites them to a nearby screened-off area where they’re shown what they could’ve gotten at Captain D’s for what they just paid at Red Lobster. The people are invited to taste the platters spread before them. “That’s the same thing we just ate,” said one of the Red Lobster customers, pointing to the unit behind him.
Captain D’s doesn’t mention that it refused to participate in a review of the commercial by the National Advertising Division of the Better Business Bureau, a step requested on the basis of Darden’s objections. The full-service giant pointed out to NAD that the spot cites what the patrons paid in total at the Red Lobster, including taxes, beverages and tips. Those additional charges aren’t factored into what Captain D’s asserts the Red Lobster customers could’ve gotten at the quick-service chain for the same tab.
The NAD reportedly referred the matter late last year to the Federal Trade Commission.
Captain D’s is a holding of Sagittarius Brands, which also owns Del Taco.
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.
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.
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