We had an earthquake this week in New York City, but the restaurant business likely felt a few tremors of its own, judging from recent developments.
In short order, we had the most significant executive change in years; further proof the business can be one big hurt for the unwary; and a strong reminder of why you should always wear clean underwear while dining out in the city, if you wear any at all.
Temblor 1: First, the personnel shift. It wasn’t shocking that California Pizza Kitchen named a new CEO after being acquired by a private-equity firm. The surprise was the selection: G.J. Hart, the longtime range boss at the Texas Roadhouse casual chain.
I always figured he owned too much Roadhouse stock to leave. The only way he’d exit would be if a P.E. firm took the company private and installed its own honcho.
Turns out Hart only holds 289,000 shares, or less than 1% of shares outstanding, according to last year’s proxy.
Which will undoubtedly work in CPK’s favor. Roadhouse was a standout among the crowded field of casual faux-honkytonks, a group that also includes LongHorn, Lone Star and at least seven or eight strong regional chains.
The other national brands went through some significant retrenchment. Roadhouse has been the steady ride in the field, the result of what strikes me as a customer as an intense focus on operations and the integrity of the brand. You have a sense of what the concept is all about.
Sometimes when I visit a CPK, I feel as if I’m in a Sbarro with waitress service. Is it a pizza place, a casual restaurant, an Italian dinnerhouse, a café? Hart’s skills will likely play directly into the chain’s needs.
Temblor 2: The MaggieMoo’s mix-in ice cream chain is led behind the barn. The concept will be absorbed into its sister brand (and what most observers cite as the originator of the format), Marble Slab.
Moo’s wasn’t exactly an industry powerhouse. But it did have its moments of interest as a franchise option, particularly when arch-rival Cold Stone Creamery was growing so quickly.
That wouldn’t be such a big deal on it’s own. But there’s also…
Temblor 2.5: A new flurry of media reports about Quiznos financial plight. The Wall Street Journal reported some time ago that the chain was struggling under a whopper of debt. New coverage, including in the Journal, suggest that the problem hasn’t eased at all.
Quiznos is no MaggieMoo’s. It made a splash in the sandwich market, both by growing at head-turning speed and undercutting competitors on price. It was also one of the franchise chains that everyone seemed to be talking about.
Franchise relations within the chain soured long ago. Not the operators are watching a train-wreck of a situation, and one that many of them predicted when the advertised price of sandwiches left crumbs for margins.
The moral here: Restaurant franchising has stepped up appreciably in recent years as franchisors sold off company stores, displaced white-collar workers decided to start their own businesses, and fast-casual emerged as a hot area of growth. Activity increased, but the risk didn’t decline.
Choosing the wrong franchise can still be disastrous, even though the emphasis today is on finding experienced operators who might already have other chain concepts in their brand portfolios.
Temblor 3: New Yorkers have turned their city’s exalted restaurants into one big orgy, according to a story in the most believable tabloid this side of The Onion, the New York Post.
“Tableside naughtiness is so widespread, the issue’s no longer whether you’ve had a dalliance at an NYC eatery; it’s when, where and how,” reported the Ruppert Murdoch-owned daily.
Bragging about where you’ve had sex is now as much of a status setter as being able to namedrop where you ate, or what celebrity works out at your gym, according to the piece.
My favorite quote, from Joseph Couture, the author of a book on public sex: “The only thing people drop faster than their inhibitions after a bottle of wine is their pants.”
Which makes you wonder how many restaurant patrons took the earth moving beneath their feet this week as a completely routine experience.
Showing posts with label casual dining. Show all posts
Showing posts with label casual dining. Show all posts
Thursday, August 25, 2011
Tuesday, August 16, 2011
Bankruptcy courts are busy again with restaurants
The restaurant industry is still analyzing the effects of last week’s funhouse ride on Wall Street. But one scream of fright should’ve been audible before the white-knuckle trading began: There’s been another wave of restaurant bankruptcies, this time of franchisees.
The busts tend to get less attention than the filings of a brand’s parent company, which themselves have been less than high-profile in recent weeks (the most recent chain to put creditors at arm’s length: Bill Johnson’s Big Apple, a five-unit chain of family restaurants in the Phoenix area).
Taken together, the bankruptcies prove the industry shakeout is still underway, this time on a market-by-market basis.
It’s tough to read a pattern in the failures. On first glance, fast food is the source for a disproportionate number. This Wednesday, an auctioneer in Dallas will sell off the Burger King units of a bankrupt franchisee. A bankrupt El Pollo Loco operator has nine units on the block in southern California. The weekend brought news that a Rally’s franchisee in Birmingham, Ala., was throwing in the paper napkin.
But the full-service sector has seen its share of failures, too. Chevys, a low-ticket casual chain, lost two stores in St. Louis when an eight-unit franchisee there couldn’t cut the mustard.
A number of family restaurants, including franchises of bankrupt Perkins & Marie Callender’s, have provided the bankruptcy courts with considerable business from that segment.
Here and there, a common element does crop up: Locations rendered unfeasible by the economic downturn. It’s often less a matter of a traffic freefall than a function of a rent that’s tough to cover.
The outcome should be healthier local markets. Supply usually dips, to some degree, and the shuttered stores provide an expansion opportunity if the landlord is more realistic going forward about the lease.
The question, underscored by last week’s roller coaster, is how all this uncertainty is going to affect consumers and lenders.
The busts tend to get less attention than the filings of a brand’s parent company, which themselves have been less than high-profile in recent weeks (the most recent chain to put creditors at arm’s length: Bill Johnson’s Big Apple, a five-unit chain of family restaurants in the Phoenix area).
Taken together, the bankruptcies prove the industry shakeout is still underway, this time on a market-by-market basis.
It’s tough to read a pattern in the failures. On first glance, fast food is the source for a disproportionate number. This Wednesday, an auctioneer in Dallas will sell off the Burger King units of a bankrupt franchisee. A bankrupt El Pollo Loco operator has nine units on the block in southern California. The weekend brought news that a Rally’s franchisee in Birmingham, Ala., was throwing in the paper napkin.
But the full-service sector has seen its share of failures, too. Chevys, a low-ticket casual chain, lost two stores in St. Louis when an eight-unit franchisee there couldn’t cut the mustard.
A number of family restaurants, including franchises of bankrupt Perkins & Marie Callender’s, have provided the bankruptcy courts with considerable business from that segment.
Here and there, a common element does crop up: Locations rendered unfeasible by the economic downturn. It’s often less a matter of a traffic freefall than a function of a rent that’s tough to cover.
The outcome should be healthier local markets. Supply usually dips, to some degree, and the shuttered stores provide an expansion opportunity if the landlord is more realistic going forward about the lease.
The question, underscored by last week’s roller coaster, is how all this uncertainty is going to affect consumers and lenders.
Wednesday, July 27, 2011
Sandy Beall's different drummer
Give one of those inaudible dog whistles a blast and see if Sandy Beall cocks an ear. The Ruby Tuesday CEO must be picking up signals other restaurant executives can’t detect. Why else would he be reading the marketplace so differently?
Almost every chain, from McDonald’s to Applebee’s, has cut back its company-run restaurants to free up capital and lower risk. Not Ruby, the operation that Beall founded while he was still in college. In the past year it’s purchased 109 stores from franchisees.
So how’s that working out? From April through June, Ruby’s net income was depressed by a 24.3% drop in franchise revenues, which typically have a profit margin just this side of legal. The offset was a 12.6% increase in revenues.
But Beall’s not budging. “No, no, no,” he told financial analysts during a conference call. “We run company-owned operations. We sure as hell wouldn't have bought them back, if we're going to refranchise them.”
That wasn’t the only time during the call that portfolio managers asked about Ruby’s recent tactics. Several wondered aloud about the direction of the chain’s menu. For direct competitors, the watch words have been value and nostalgia. Witness their reliance on burgers and their slider variants.
What’s new on Ruby’s bill of fare? Trout almondine and spaghetti squash,” which I personally find appealing,” said Jeff Omohundro, the restaurant analyst for Wells Fargo Securities. “But I just wonder if there might be some overreach relative to a broader Ruby Tuesday audience.”
Beall responded that the dishes are a choice for 3 or 4% of guests, and “it didn't hurt us to have it.”
But the analysts didn’t let the point drop. “There was a period in which you had kind of tweaked the business around, put some emphasis against appetizers and your burgers, and it seemed like the business really took off,” noted Morgan Keegan’s Robert Derrington. “Is there anything to be gained as we look back in time about that relative to your dinner house strategy?”
“We do not plan to turn back into a burger joint,” answered Beall.
Some of the moves seemed to have analysts doodling question marks as they listened to Beall and his team. For instance, EVP Kimberly Grant observed that most of Ruby’s recent sales decline has come during weekday dinnertimes.
Didn’t the chain run a Tuesday steak and lobster promotion to counter that trend? Is that tactic still being tried?
“No, we shifted that to being all-weekend promotion,” Beall said in response to the question.
Almost every chain, from McDonald’s to Applebee’s, has cut back its company-run restaurants to free up capital and lower risk. Not Ruby, the operation that Beall founded while he was still in college. In the past year it’s purchased 109 stores from franchisees.
So how’s that working out? From April through June, Ruby’s net income was depressed by a 24.3% drop in franchise revenues, which typically have a profit margin just this side of legal. The offset was a 12.6% increase in revenues.
But Beall’s not budging. “No, no, no,” he told financial analysts during a conference call. “We run company-owned operations. We sure as hell wouldn't have bought them back, if we're going to refranchise them.”
That wasn’t the only time during the call that portfolio managers asked about Ruby’s recent tactics. Several wondered aloud about the direction of the chain’s menu. For direct competitors, the watch words have been value and nostalgia. Witness their reliance on burgers and their slider variants.
What’s new on Ruby’s bill of fare? Trout almondine and spaghetti squash,” which I personally find appealing,” said Jeff Omohundro, the restaurant analyst for Wells Fargo Securities. “But I just wonder if there might be some overreach relative to a broader Ruby Tuesday audience.”
Beall responded that the dishes are a choice for 3 or 4% of guests, and “it didn't hurt us to have it.”
But the analysts didn’t let the point drop. “There was a period in which you had kind of tweaked the business around, put some emphasis against appetizers and your burgers, and it seemed like the business really took off,” noted Morgan Keegan’s Robert Derrington. “Is there anything to be gained as we look back in time about that relative to your dinner house strategy?”
“We do not plan to turn back into a burger joint,” answered Beall.
Some of the moves seemed to have analysts doodling question marks as they listened to Beall and his team. For instance, EVP Kimberly Grant observed that most of Ruby’s recent sales decline has come during weekday dinnertimes.
Didn’t the chain run a Tuesday steak and lobster promotion to counter that trend? Is that tactic still being tried?
“No, we shifted that to being all-weekend promotion,” Beall said in response to the question.
Tuesday, July 5, 2011
The $75,000 question
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.
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.
Monday, May 2, 2011
Party on, Mariano
Never mind the buzz about Osama Bin Laden. The frozen-margarita machine is about to turn 40!
The official anniversary is May 11, according to a press release issued this morning. It noted that the Smithsonian Museum spent a year verifying the date and the identify of the inventor, a Dallas restaurateur named Mariano Martinez, who, like Fergie and Adele, usually goes by his first name.
The Smithsonian—as far as I can tell, an institution supported by our tax dollars—pointed out that the frozen dispenser placed tenth on a list of American inventions. Number One was the light bulb, and you have to presume the slider and the straw were in their someplace.
"No, it's not the Model T, but we have a lot of little things in the museum that are little innovations that became important,” said Smithsonian curator Dr. Rayna Green.
She doesn’t need to convince me. When the kitchen of my current house was renovated, I argued passionately for replacing the stove, a worthless dust collector, with a genuine margarita dispenser. But apparently that concession to reality fell beyond the “for worse” provision of the marital vow, as my wife (who refers to herself as my first wife) sharply pointed out at the time.
If only I'd had the data point that was released this morning: Americans drink 185,000 frozen margaritas in a typical evening hour. Think of how many more Facebook friends we'd have landed with an in-house margarita machine!
I don’t mean to trivialize the historic news of this day. But let’s give it up for the frozen drink machine. Without it, what would a dozen Tex-Mex chains serve with their nachos and chips?
The official anniversary is May 11, according to a press release issued this morning. It noted that the Smithsonian Museum spent a year verifying the date and the identify of the inventor, a Dallas restaurateur named Mariano Martinez, who, like Fergie and Adele, usually goes by his first name.
The Smithsonian—as far as I can tell, an institution supported by our tax dollars—pointed out that the frozen dispenser placed tenth on a list of American inventions. Number One was the light bulb, and you have to presume the slider and the straw were in their someplace.
"No, it's not the Model T, but we have a lot of little things in the museum that are little innovations that became important,” said Smithsonian curator Dr. Rayna Green.
She doesn’t need to convince me. When the kitchen of my current house was renovated, I argued passionately for replacing the stove, a worthless dust collector, with a genuine margarita dispenser. But apparently that concession to reality fell beyond the “for worse” provision of the marital vow, as my wife (who refers to herself as my first wife) sharply pointed out at the time.
If only I'd had the data point that was released this morning: Americans drink 185,000 frozen margaritas in a typical evening hour. Think of how many more Facebook friends we'd have landed with an in-house margarita machine!
I don’t mean to trivialize the historic news of this day. But let’s give it up for the frozen drink machine. Without it, what would a dozen Tex-Mex chains serve with their nachos and chips?
Tuesday, January 25, 2011
Snapshot from southern Cal
Restaurant veteran John A. Gordon was kind enough to pass along what he saw and heard at the recent ICR XChange Conference, a powwow in southern California for restaurant companies and investors specializing in the field. The meeting is different from most financial conferences because the presenters include private companies as well as public ones. In this case, that meant a peek inside such interesting up-and-comers as Le Pain Quotidien, a bakery-café concept, and Ignite Restaurant Group, the multi-concept parent of Brick House Tavern + Tap and Joe’s Crab Shack.
Gordon proved to be as astute in observing as he is in analyzing restaurants’ financial situations, a skill that has made him a popular source for those of us who write about the industry. He passed along these insights from the conference:
The mood of the conference was upbeat, with most of the presenters citing positive sales trends. Generally, they indicated that traffic is still weak, but the damage is being tempered by rising guest tabs.
Smashburger drew the most probing by the investors in attendance, despite the concerns voiced by some that the “better burger” segment may be overcrowded.
One extreme down note: Participant Steve West asserted that casual dining traffic will never rebound to pre-Great Recession levels, a result of the shakeout being too anemic.
Domino’s CEO Patrick Doyle noted that many of the chain’s franchisees are unable to grow because of a funding drought. The stores aren’t throwing off sufficient cash flow to justify a rubber-stamped loan, and banks are reluctant to touch any franchisee except the larger ones with whom they’ve done business over a long stretch.
A Sonic executive offered the hindsight that the drive-in chain should have included fewer items on its dollar menu, and promoted them in a more nuanced fashion. The budget line translated in some patrons’ minds into diminished quality.
Chipotle and BJ’s Restaurants, two of the industry’s high achievers, cited a lack of desirable real estate sites and a shallow pool of labor talent as curbs on growth. Others cited rising gasoline prices and escalating food costs.
Texas Road House, Chipotle and Krispy Kreme all cited an effort to shrink their back-of-the-house areas, part of an overall effort to reduce the footprint of new units.
My thanks to John, a principal in Pacific Management Consulting Group, for passing along his observations. You can get more of his food from thought at John's blog,
Gordon proved to be as astute in observing as he is in analyzing restaurants’ financial situations, a skill that has made him a popular source for those of us who write about the industry. He passed along these insights from the conference:
The mood of the conference was upbeat, with most of the presenters citing positive sales trends. Generally, they indicated that traffic is still weak, but the damage is being tempered by rising guest tabs.
Smashburger drew the most probing by the investors in attendance, despite the concerns voiced by some that the “better burger” segment may be overcrowded.
One extreme down note: Participant Steve West asserted that casual dining traffic will never rebound to pre-Great Recession levels, a result of the shakeout being too anemic.
Domino’s CEO Patrick Doyle noted that many of the chain’s franchisees are unable to grow because of a funding drought. The stores aren’t throwing off sufficient cash flow to justify a rubber-stamped loan, and banks are reluctant to touch any franchisee except the larger ones with whom they’ve done business over a long stretch.
A Sonic executive offered the hindsight that the drive-in chain should have included fewer items on its dollar menu, and promoted them in a more nuanced fashion. The budget line translated in some patrons’ minds into diminished quality.
Chipotle and BJ’s Restaurants, two of the industry’s high achievers, cited a lack of desirable real estate sites and a shallow pool of labor talent as curbs on growth. Others cited rising gasoline prices and escalating food costs.
Texas Road House, Chipotle and Krispy Kreme all cited an effort to shrink their back-of-the-house areas, part of an overall effort to reduce the footprint of new units.
My thanks to John, a principal in Pacific Management Consulting Group, for passing along his observations. You can get more of his food from thought at John's blog,
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.
Wednesday, January 27, 2010
Copycat killers?
Have some mercy, fast-food chains.
You’ve already swiped a horde of customers from casual dining. Do you have to steal the sector’s best defense, too?
Yet there’s no denying the recent raids by higher-end brands. Consider the newest offer from Qdoba: Craft 2, a mix-and-match deal for bargain-hunters who prize variety as much as volume. The offer invites customers to build a meal by combining two Qdoba favorites, all for $5.99.
Sounds a little like Applebee’s 2 for $20 deal, doesn’t it? Or is it Chili’s 3 for $20? T.G.I. Friday’s 3 for $12.99, maybe?
Mix-and-match deals have become as commonplace in casual dining as deep-fried onion product, bloomin’, straws or otherwise. They’ve been a leading way—perhaps the leading way—for big brands to provide the value that consumers now regard as a non-negotiable.
Fast-food chains could offer better prices on products common to both segments, like burgers or salads. But filling platters or serving up multiple courses was something only the full-service chains seemed able to pull off.
Well, not anymore. A few weeks before Qdoba started hawking its mix-and-match deal, Quiznos lifted the napkin off its new Choose Two deal. Patrons are invited to make a meal of any two items off the sandwich chain’s menu, all for $5.
Is there any doubt that other fast feeders will follow?
You’ve already swiped a horde of customers from casual dining. Do you have to steal the sector’s best defense, too?
Yet there’s no denying the recent raids by higher-end brands. Consider the newest offer from Qdoba: Craft 2, a mix-and-match deal for bargain-hunters who prize variety as much as volume. The offer invites customers to build a meal by combining two Qdoba favorites, all for $5.99.
Sounds a little like Applebee’s 2 for $20 deal, doesn’t it? Or is it Chili’s 3 for $20? T.G.I. Friday’s 3 for $12.99, maybe?
Mix-and-match deals have become as commonplace in casual dining as deep-fried onion product, bloomin’, straws or otherwise. They’ve been a leading way—perhaps the leading way—for big brands to provide the value that consumers now regard as a non-negotiable.
Fast-food chains could offer better prices on products common to both segments, like burgers or salads. But filling platters or serving up multiple courses was something only the full-service chains seemed able to pull off.
Well, not anymore. A few weeks before Qdoba started hawking its mix-and-match deal, Quiznos lifted the napkin off its new Choose Two deal. Patrons are invited to make a meal of any two items off the sandwich chain’s menu, all for $5.
Is there any doubt that other fast feeders will follow?
Wednesday, January 20, 2010
My pick for Best Turnaround Story
If Kona Grill’s past year had been recorded in 3-D, people would be bailing out of “Avatar” to catch the more engrossing tale.
The story could’ve been lifted from a Hollywood western: A frontier boss decides he’s going to make his own rules, public be damned. In this case, that includes selling a million shares of stock to his father at a sweetheart price to raise working capital after cutting the staff. Meanwhile, the easterners on Wall Street worry about how this range lord is running the ranch they’ve staked. Shots are exchanged, albeit verbally, when they ask for an accounting during a routine phone chat with management. You could almost hear the derringers being cocked.
Enter our hero, his white hat almost glistening. Marc Buehler, best known as the marketing sure-shot who deftly used his spurs at Applebee’s, is brought in as the new honcho to fix the muck-up that the 24-unit chain had become.
He starts assembling a posse to run off the fusion concept’s problems. Because bar business is essential to Kona, Buehler recruits Rachel Phillips-Luther, a former hand at the Chammps and Fox & Hounds sports-bar chains, to serve as vice president of marketing and brand innovation.
The appointment came after one of the last key figures from the last regime, an operations specialist, had been sent galloping into the sunset.
If you want to go get a refill on the popcorn, I’ll wait.
Yesterday, Buehler showed what kind of firepower he intends to put behind Kona, a concept old enough to need some updating. This time his lariat fell on Larry Ryback, president and chief operating officer of Dean Vlahos’ Redstone American Grill, one of the most popular and admired concepts at the high end of casual dining. Ryback is serving Kona, characterized by Buehler as “polished casual,” as senior vice president of operations.
Now comes the hard work of proving the viability of Kona, a decidedly quirky fusion concept. Its signatures include a sushi bar, a 2,000-gallon aquarium, a hopping bar, a menu that stretches from pizza to noodle dishes, and 40 made-from-scratch sauces. “We have a saucier in every restaurant,” Buehler recently boasted to investors.
Buehler has suggested that those idiosyncrasies will serve Kona well by differentiating the brand from other casual concepts, or what he calls “a sea of sameness” featuring “a lot of brown food on plates.”
Yet he also notes that Kona is popular with consumers aged 21 to 35, hardly the older, more affluent customers sought by other upscale concepts like Seasons 52. Checks average $24, and units are typically running “north of $4 million” in annual sales, says Buehler.
With only 24 restaurants, the chain also lacks the marketing wherewithal of competitors. Those stores are also scatter-gunned across 15 states, so even pocket marketing is a challenge.
Instead, Buehler says he’ll rely on social media and word-of-mouth. His revised team is in the process of forming a new loyalty marketing program, a club for “Konavores.”
He also plans to blaze new opportunities for Kona in catering, delivery and takeout, while opening only one restaurant in 2010.
The job has to be a daunting one. But the dramas leading into it have made this one of my favorite turnaround efforts to watch.
After all, would the Na’vi dare to combine sushi with calamari, meatloaf and a swimming-pool sized aquarium?
The story could’ve been lifted from a Hollywood western: A frontier boss decides he’s going to make his own rules, public be damned. In this case, that includes selling a million shares of stock to his father at a sweetheart price to raise working capital after cutting the staff. Meanwhile, the easterners on Wall Street worry about how this range lord is running the ranch they’ve staked. Shots are exchanged, albeit verbally, when they ask for an accounting during a routine phone chat with management. You could almost hear the derringers being cocked.
Enter our hero, his white hat almost glistening. Marc Buehler, best known as the marketing sure-shot who deftly used his spurs at Applebee’s, is brought in as the new honcho to fix the muck-up that the 24-unit chain had become.
He starts assembling a posse to run off the fusion concept’s problems. Because bar business is essential to Kona, Buehler recruits Rachel Phillips-Luther, a former hand at the Chammps and Fox & Hounds sports-bar chains, to serve as vice president of marketing and brand innovation.
The appointment came after one of the last key figures from the last regime, an operations specialist, had been sent galloping into the sunset.
If you want to go get a refill on the popcorn, I’ll wait.
Yesterday, Buehler showed what kind of firepower he intends to put behind Kona, a concept old enough to need some updating. This time his lariat fell on Larry Ryback, president and chief operating officer of Dean Vlahos’ Redstone American Grill, one of the most popular and admired concepts at the high end of casual dining. Ryback is serving Kona, characterized by Buehler as “polished casual,” as senior vice president of operations.
Now comes the hard work of proving the viability of Kona, a decidedly quirky fusion concept. Its signatures include a sushi bar, a 2,000-gallon aquarium, a hopping bar, a menu that stretches from pizza to noodle dishes, and 40 made-from-scratch sauces. “We have a saucier in every restaurant,” Buehler recently boasted to investors.
Buehler has suggested that those idiosyncrasies will serve Kona well by differentiating the brand from other casual concepts, or what he calls “a sea of sameness” featuring “a lot of brown food on plates.”
Yet he also notes that Kona is popular with consumers aged 21 to 35, hardly the older, more affluent customers sought by other upscale concepts like Seasons 52. Checks average $24, and units are typically running “north of $4 million” in annual sales, says Buehler.
With only 24 restaurants, the chain also lacks the marketing wherewithal of competitors. Those stores are also scatter-gunned across 15 states, so even pocket marketing is a challenge.
Instead, Buehler says he’ll rely on social media and word-of-mouth. His revised team is in the process of forming a new loyalty marketing program, a club for “Konavores.”
He also plans to blaze new opportunities for Kona in catering, delivery and takeout, while opening only one restaurant in 2010.
The job has to be a daunting one. But the dramas leading into it have made this one of my favorite turnaround efforts to watch.
After all, would the Na’vi dare to combine sushi with calamari, meatloaf and a swimming-pool sized aquarium?
Thursday, October 8, 2009
Ruby Tuesday to roll 'best menu ever'
Ruby Tuesday is testing a new menu that “should lead to increased frequency,” marketing SVP Mark Young told investors Wednesday.
That, in turn, will help the chain attain its objective of raising guest tabs into the $12.50 to $14.50 range, from the current average of about $11.50, Young said during a conference call with financial analysts.
He did not disclose what selections will be featured on the new bill of far, but noted that they will include “several new items with bold flavors and more variety.” He also mentioned that the design spotlights an extended array of appetizers and “dinner-type items.”
The chain has been trying to boost sales in a two-pronged strategy of increasing guest counts, sometimes by offering deals, while also showcasing premium selections like a new lobster tail entree. Young said the concept will pare back its deal-making to facilitate a rise in the average check.
Beverage upgrades will also figure into that effort, he indicated.
Although Young said the new menu is still in a test phase, CEO Sandy Beall said the line-up is already set for a Nov. 3 rollout. He described it as “by far the best menu ever,” and said it was the result of “two or three years” of research and design.
Beall disclosed that the chain he founded 35-plus years ago now generates about 45% of sales with dinner-sized items, compared with a mix of 25% in past years. And that’s throughout the day—“we sell, gosh, probably 40% of all our dinners at lunchtime,” he said.
The chain’s objective, he added, is to raise that proportion to 65% of sales.
The new lobster entrée already accounts for 3% of sales, he commented. That compares with the 8% that comes from burgers, a signature of the chain, the executives indicated.
The chain’s officials noted that the recent rollout of Sunday brunch service to all but 100 stores has helped in drawing more visits from established customers.
That, in turn, will help the chain attain its objective of raising guest tabs into the $12.50 to $14.50 range, from the current average of about $11.50, Young said during a conference call with financial analysts.
He did not disclose what selections will be featured on the new bill of far, but noted that they will include “several new items with bold flavors and more variety.” He also mentioned that the design spotlights an extended array of appetizers and “dinner-type items.”
The chain has been trying to boost sales in a two-pronged strategy of increasing guest counts, sometimes by offering deals, while also showcasing premium selections like a new lobster tail entree. Young said the concept will pare back its deal-making to facilitate a rise in the average check.
Beverage upgrades will also figure into that effort, he indicated.
Although Young said the new menu is still in a test phase, CEO Sandy Beall said the line-up is already set for a Nov. 3 rollout. He described it as “by far the best menu ever,” and said it was the result of “two or three years” of research and design.
Beall disclosed that the chain he founded 35-plus years ago now generates about 45% of sales with dinner-sized items, compared with a mix of 25% in past years. And that’s throughout the day—“we sell, gosh, probably 40% of all our dinners at lunchtime,” he said.
The chain’s objective, he added, is to raise that proportion to 65% of sales.
The new lobster entrée already accounts for 3% of sales, he commented. That compares with the 8% that comes from burgers, a signature of the chain, the executives indicated.
The chain’s officials noted that the recent rollout of Sunday brunch service to all but 100 stores has helped in drawing more visits from established customers.
Wednesday, August 12, 2009
P.F. Chang's bets $10M on new 'balance' concept
Food with integrity, the effective rallying cry of Chipotle Mexican Grill, has a high-profile new proponent. P.F. Chang's announced today that it's providing a $10-million loan to fund expansion of True Food Kitchen, a restaurant concept aimed at consumers who want a "more balanced lifestyle," in Chang's words. Among the new brand's signatures is the use of ingredients grown locally or at least within the store's region.
In announcing the deal, Chang's noted that it has an option to buy a controlling interest in the now-single-unit concept.
True Food was developed by Phoenix concept creator Sam Fox and the popular author Andrew Weill, an M.D. who runs a Tempe health facility called the Arizona Center for Integrative Medicine. He's the parent of integrative medicine, which holds that true wellness entails balance in mind, body and spirit. No doubt he burns a lot of incense.
The relationship is probably making Chang's feel better already. The parent of a namesake casual chain and a fast-casual sidekick, Pei Wei Asian Diner, has been struggling with those brands as of late, as have most of its competitors.
True Food sounds like shares more in common with Seasons 52, Darden Restaurants' smash hit of a casual concept, than with any other chain restaurant out there. And the name suggests it professes the same aversion to heavily processed food that has set Chipotle apart in the limited-service sector.
True Food's menu includes pastas, pizzas, salads, tuna sliders, house-made sodas sweetened with agave nectar or honey, 13 vegetarian selections, and 10 gluten-free choices.
It's a mix that Chang's apparently finds irresistible.
In announcing the deal, Chang's noted that it has an option to buy a controlling interest in the now-single-unit concept.
True Food was developed by Phoenix concept creator Sam Fox and the popular author Andrew Weill, an M.D. who runs a Tempe health facility called the Arizona Center for Integrative Medicine. He's the parent of integrative medicine, which holds that true wellness entails balance in mind, body and spirit. No doubt he burns a lot of incense.
The relationship is probably making Chang's feel better already. The parent of a namesake casual chain and a fast-casual sidekick, Pei Wei Asian Diner, has been struggling with those brands as of late, as have most of its competitors.
True Food sounds like shares more in common with Seasons 52, Darden Restaurants' smash hit of a casual concept, than with any other chain restaurant out there. And the name suggests it professes the same aversion to heavily processed food that has set Chipotle apart in the limited-service sector.
True Food's menu includes pastas, pizzas, salads, tuna sliders, house-made sodas sweetened with agave nectar or honey, 13 vegetarian selections, and 10 gluten-free choices.
It's a mix that Chang's apparently finds irresistible.
Sunday, May 24, 2009
Has the sizzle gone out of their fajitas?
Casual-chain execs should stop worrying about when the recession might end and turn their attention to the real issue of their segment: Has casual dining jumped the shark?
There’s a mindset taking hold that young people in their late teens are forsaking the Chili’s, T.G.I. Friday’s and Applebee’s of the world. As a longtime veteran of that sector observed, his 19-year-old daughter wouldn’t be caught dead in one of those places. She and her friends prefer fast-casual specialists like Panera, Pei Wei or Chipotle—concepts that promise better, less-processed food at a more affordable price, without the complications of sit-down service.
Drinks, a big part of casual restaurants’ appeal for Baby Boomers, aren't that much of a draw to the younger set. You can get a water, tea or Red Bull just about anywhere.
Fellow blogger and casual-dining stalwart Lane Cardwell has similarly heard the rumblings. As he wrote in a recent posting…
It appears from conversations with a large number of restaurant operators that there is a generational divide that exists between fast casual and casual dining. The younger Gen X'ers and older Millennials (ages 18-35 ) seem to prefer fast casual and Baby Boomers seem to prefer casual dining.He speculates that younger patrons are drawn by the newness, faster pace and pricing of fast casual, while those of us with a few more miles on the chassis appreciate the familiarity of the big casual brands and the comfort of table service.
It’s a generational divide the industry has seen before, ironically when casual dining really caught fire in the 1980s. Beforehand, one of the dominant chain sectors of the business had been family dining, populated by brands like Howard Johnson, Denny’s, Coco’s/Carrows, Village Inn/Bakers Square, Bob Evans, Big Boy, Shoney’s, JB’s and a host of others.
It’s no secret that those concepts had the sort of experiences in the 1990s that could fuel a thousand blues songs. They had their fans, but their fans were growing older and older. The diehards' sons and daughters just didn't have the same regard for the brands.
Some are altogether gone today, and the others are far different animals than they were in their heyday. The market moved on to other concepts, and they were left behind.
Is the same thing happening to casual dining? No one really knows. But it’s a much more deserving target of mental energy than trying to guess when consumers will spend again.
Friday, April 24, 2009
At a time of menu makeovers, BJ's resets the bar
It looks as if restaurant chains have been pumping espresso into their menu development staffs again. A current project requires me to study recent changes in the bills of fare for several dozen major concepts, and the turnover is astounding. An OSHA crackdown may be in the offing, because some test-kitchen crews are clearly being worked 'round the clock.
Next month could bring a new standard to beat. Yesterday the CEO of BJ’s Restaurants ticked off the changes that’ll be evident in the casual chain’s May menu—as “many as 25 to 27,” said Jerry Deitchle.
Included, he said, will be “10 to 12 new bar drink recipes,” an effort that complements BJ’s ongoing efforts to add more craft beers, upgrade its wine selection, and adopt a “more contemporary” non-alcoholic beverage program.
Other changes include the addition of two new full-size pizzas, a flatbread appetizer pizza, an “absolutely terrific” Thai shrimp lettuce wrap, a new version of Texas-style chicken-fried steak, an updated pot roast, a revamped an renamed Italian chopped salad, and new presentations of its crispy potato skins and meatloaf.
The overhaul was based on a what officials described as a gap analysis of what competitors didn’t offer.
“We didn’t look and say, gee, we need to have a $5.95 lunch bowl or some $5.95 lunch item or a $9 item that we could bring in there,” CFO Greg Levin told analysts during the conference call. It's not "a value perspective that maybe you’re seeing from of [our] peers."
Meanwhile, a store in Austin is testing BJ’s gamble that it can become “the premiere retailer of craft beer in casual dining,” in Deitchle’s words. He explained that BJ’s proprietary brews are “surrounded” by 24 craft beers on tap. The set-up increased the likelihood that patrons would order beer, and boosted the overall average check, he disclosed.
The extended array has already been rolled into at least 20 more stores, Deitchle indicated. “We’re still learning a bit from it,” he said, but “every economic and consumer indication has been very, very positive.”
At the same time, just to keep corporate chef Ray Martin busy, BJ’s is working on a new kids’ menu.
Deitchle mentioned that Martin would be rewarded for his work with a free nine-month cruise around the world. Actually, he didn’t say that, but I figured I’d plant the idea. I feel for you, Ray.
Next month could bring a new standard to beat. Yesterday the CEO of BJ’s Restaurants ticked off the changes that’ll be evident in the casual chain’s May menu—as “many as 25 to 27,” said Jerry Deitchle.
Included, he said, will be “10 to 12 new bar drink recipes,” an effort that complements BJ’s ongoing efforts to add more craft beers, upgrade its wine selection, and adopt a “more contemporary” non-alcoholic beverage program.
Other changes include the addition of two new full-size pizzas, a flatbread appetizer pizza, an “absolutely terrific” Thai shrimp lettuce wrap, a new version of Texas-style chicken-fried steak, an updated pot roast, a revamped an renamed Italian chopped salad, and new presentations of its crispy potato skins and meatloaf.
The overhaul was based on a what officials described as a gap analysis of what competitors didn’t offer.
“We didn’t look and say, gee, we need to have a $5.95 lunch bowl or some $5.95 lunch item or a $9 item that we could bring in there,” CFO Greg Levin told analysts during the conference call. It's not "a value perspective that maybe you’re seeing from of [our] peers."
Meanwhile, a store in Austin is testing BJ’s gamble that it can become “the premiere retailer of craft beer in casual dining,” in Deitchle’s words. He explained that BJ’s proprietary brews are “surrounded” by 24 craft beers on tap. The set-up increased the likelihood that patrons would order beer, and boosted the overall average check, he disclosed.
The extended array has already been rolled into at least 20 more stores, Deitchle indicated. “We’re still learning a bit from it,” he said, but “every economic and consumer indication has been very, very positive.”
At the same time, just to keep corporate chef Ray Martin busy, BJ’s is working on a new kids’ menu.
Deitchle mentioned that Martin would be rewarded for his work with a free nine-month cruise around the world. Actually, he didn’t say that, but I figured I’d plant the idea. I feel for you, Ray.
Monday, March 23, 2009
Why guns shouldn't be permitted in restaurants
As I've reported here and in my Fohboh blog, gun advocates contend that it's ridiculous to prohibit restaurant patrons from toting concealed weapons into a place that serves alcohol. In jurisdictions stretching from Virginia to Arizona, they're hell bent on changing the laws.
Here are a few recent news developments that they may want to consider before resuming their crusade:
Here are a few recent news developments that they may want to consider before resuming their crusade:
A man displaying a gun in a restaurant accidentally fired it early Saturday morning, killing an acquaintance who was there with him, according to Phoenix police.--AZCentral.com
A man who had a concealed-weapons permit accidentally fired his gun inside a Provo restaurant, hitting his chair. Police say they cited Ernest Fichler for discharging the weapon in city limits. They seized his 9 mm automatic pistol and turned in his license to carry a concealed weapon for state review.--Salt Lake City Tribune
Last year, eight people were slain at bars or clubs in Orlando and unincorporated Orange County, often in disputes with people they barely knew. In one case from east Orange, the deadly brawl literally started over spilled beer and ended with gunfire.--OrlandoSentinel.com
Monday, March 16, 2009
Blue Sage gives patrons final say in pricing
Coming from a restaurant family, Chris Dussin presumably knows all the tricks for pulling first-time customers into a place. But the one he started using last week at The Dussin Group’s two Blue Sage Cafes in Portland, Ore., is probably a first for the son of Old Spaghetti Factory founder Gus Dussin. Indeed, the ploy is novel enough to snag headlines in several local media outlets, helping to achieve the desired end without a separate outlay for marketing or public relations.
Not that the technique is unkonwn. At least one restaurant in the United States has similarly let patrons set the price of what they’re served. The approach has more recently snagged publicity for restaurants in Toronto and the United Kingdom. It may be a matter of time until places embrace the name-your-price tactic as a standard promotional device for the Great Recession, similar to product giveaways in fast-food or the bundling that’s now widely evident in casual dining.
Dussin’s approach has a little more structure than some of the early pay-what-you-want incarnations. In at least a few of those pioneering efforts, patrons were asked after eating to fork over whatever they felt the meal was worth.
Dussin provides guests with what amounts to a manufacturer’s suggested retail price for food items. Customers are presented after the meal with a tab listing the prices of what they ordered. They in effect decide whether that price was worth it. If not, they counter with their final offer. Dussin told OregonLive.com that some guests had indeed penciled in a zero for their charge, but that others had volunteered to pay more than the listed price.
The Your Price is Right promo is scheduled to run at the two casual restaurants until early next month.
The Dussin Group also operates the Old Spaghetti Warehouse chain and another full-service concept called Fenouil.
Not that the technique is unkonwn. At least one restaurant in the United States has similarly let patrons set the price of what they’re served. The approach has more recently snagged publicity for restaurants in Toronto and the United Kingdom. It may be a matter of time until places embrace the name-your-price tactic as a standard promotional device for the Great Recession, similar to product giveaways in fast-food or the bundling that’s now widely evident in casual dining.
Dussin’s approach has a little more structure than some of the early pay-what-you-want incarnations. In at least a few of those pioneering efforts, patrons were asked after eating to fork over whatever they felt the meal was worth.
Dussin provides guests with what amounts to a manufacturer’s suggested retail price for food items. Customers are presented after the meal with a tab listing the prices of what they ordered. They in effect decide whether that price was worth it. If not, they counter with their final offer. Dussin told OregonLive.com that some guests had indeed penciled in a zero for their charge, but that others had volunteered to pay more than the listed price.
The Your Price is Right promo is scheduled to run at the two casual restaurants until early next month.
The Dussin Group also operates the Old Spaghetti Warehouse chain and another full-service concept called Fenouil.
Wednesday, March 4, 2009
Restaurant bars: The devil's YouTube?
I don’t know why the nation is preoccupied with fluff like the economy or wars when our very future is being threatened—-by Chili’s, no less. Our youths are probably imperiled by the likes of Applebee’s, T.G.I. Friday’s and Ruby Tuesday, too, but they weren’t singled out by the president of Utah’s senate, who wants walls built between restaurants’ bars and the areas used by the public. Otherwise, fears Republican Michael Waddoups, youngsters can see drinks being made! Why not just sit ‘em down and slide a cosmo their way?
In any other state, such a suggestion would be dismissed as outlandish showboating for the fundamentalist right. But not in Utah, where headlines announced yesterday that full-strength beer can now be sold. Because of the Mormon population, drinking can be as contentious there as abortion is elsewhere.
Places that serve liquor already have to isolate drink prep areas with a partition, known locally as a Zion curtain. But it can be a short partition made of glass, which still exposes young people to the glamour of alcohol, in the view of abundant pro-temperance forcese.
Waddoups learned that firsthand when he visited a Chili’s in January, according to The Salt Lake Tribune. The paper reported that a bill introduced this week would require the construction of a wall at least 10 feet high between bartenders' work areas and where patrons mill about. It was introduced not by Waddoups but by a fellow Republican, state Sen. John Valentine.
The initiative does provide for an alternative: Mix and pour the drinks away from public view in a back room. Which, in at least some instances, might have to be constructed.
The measure has already been approved by the Senate Business and Labor Committee, according to the Trib.
The proposal to halt public drink preparation was filed as Utah pols were considering a measure that would eliminate the need for even the Zion curtain. Proponents like the governor argue that Utah has to catch up with the times if it wants to foster tourism, and that means loosening up the state’s serving laws. For instance, restaurants’ bars would be acknowledged for what they are, not private clubs nestled check-to-jowl with dining rooms, as the law currently regards them. Visitors wanting a beer would not have to go through the charade of joining a “club.”
The Senate is debating the perils of drinks being mixed in full view after passing a measure Tuesday that permits employees to bring guns into the parking lots of the places where they work.
Seems to me they may want to rethink priorities.
In any other state, such a suggestion would be dismissed as outlandish showboating for the fundamentalist right. But not in Utah, where headlines announced yesterday that full-strength beer can now be sold. Because of the Mormon population, drinking can be as contentious there as abortion is elsewhere.
Places that serve liquor already have to isolate drink prep areas with a partition, known locally as a Zion curtain. But it can be a short partition made of glass, which still exposes young people to the glamour of alcohol, in the view of abundant pro-temperance forcese.
Waddoups learned that firsthand when he visited a Chili’s in January, according to The Salt Lake Tribune. The paper reported that a bill introduced this week would require the construction of a wall at least 10 feet high between bartenders' work areas and where patrons mill about. It was introduced not by Waddoups but by a fellow Republican, state Sen. John Valentine.
The initiative does provide for an alternative: Mix and pour the drinks away from public view in a back room. Which, in at least some instances, might have to be constructed.
The measure has already been approved by the Senate Business and Labor Committee, according to the Trib.
The proposal to halt public drink preparation was filed as Utah pols were considering a measure that would eliminate the need for even the Zion curtain. Proponents like the governor argue that Utah has to catch up with the times if it wants to foster tourism, and that means loosening up the state’s serving laws. For instance, restaurants’ bars would be acknowledged for what they are, not private clubs nestled check-to-jowl with dining rooms, as the law currently regards them. Visitors wanting a beer would not have to go through the charade of joining a “club.”
The Senate is debating the perils of drinks being mixed in full view after passing a measure Tuesday that permits employees to bring guns into the parking lots of the places where they work.
Seems to me they may want to rethink priorities.
Thursday, February 12, 2009
What're the pacesetters trying next?
Three of the industry’s most closely monitored performers conferred with their investors yesterday in quarterly conference calls. Apparently the SEC has quietly changed its regulations to require that each confab include questions about bundled meals and other ways of coaxing open tightly clutched wallets. Here are some of the highlights:
McDonald’s is the indisputable king of fast-food, based on its consistently strong financial results. By the same gauge, you’d have to give the crown in casual dining to Buffalo Wild Wings.
Comp sales for the first three months of Wild Wings' fiscal 2009 are running at 7% for franchises, 8% for company stores, CEO Sally Smith told investors yesterday. No one else in the sector is coming close to those sorts of gains.
Smith also detailed some of the new products slated for rollouts, and they’re absolutely brilliant—because they’re so simple. For instance, one of the new items is merely a twist on chicken fingers, quite literally. Twisted Chicken is exactly that.
Those products are being readied after the introduction late last year of flat-bread items that intended to be dipped before they're munched. Sauces, developed for BWW’s wings, are one of the chain’s signatures.
The other new items—barbecue-flavored nachos and Pepperoni Kickers, presumably a type of appetizer—are also simple extensions, which promise to keep serving times tight.
Executives noted that BWW opened 67 stores last year, and has $44.5 million in cash and marketable securities on hand.
Chipotle clearly feels it’s no bank in a bailout situation. The chain said categorically that it would not cut 2008 bonuses across the board for restaurant managers, a reflection of that position’s importance and the stellar performance of many doing the job. If they excelled, execs indicated, they’ll be collecting their promised incentive pay-outs.
Nor is the chain following the lead of Starbucks and virtually the rest of the industry by bundling menu items into bargain-priced packages. The approach would work against Chipotle’s founding principle of customizing each order, executives explained.
But, they acknowledged, the chain is experimenting with new menu boards that may be less intimidating to first-time visitors. A new set-up might also help regulars discover new flavor or meal combinations, they added, though they weren’t forthcoming with details.
P.F. Chang’s is testing several ways to underscore value at its Pei Wei Asian Diner fast-casual concept, including portion cuts with an accompanying price rollback, executives said during their conference call yesterday.
“We’re looking at offering some of the existing products in a smaller portion, smaller price opportunity. We are looking at the possibility of doing some more all-inclusive dining opportunities. And then we are also evaluating the general format of the menu as it sits today in relationship to its current price,” said co-CEO Rick Federico.
He also cited the possibility of doing bundled meals, where a drink, cup of soup, side salad or spring roll could be offered as part of the meal. And, he said, nine stores are offering certain meals as bowls instead of a plated offering.
Federico said the concept has evolved into more of a low-priced alternative to casual restaurants instead of a true quick-casual place, which has been “a bit of a competitive disadvantage.” Part of the remedy, he said, will be a step-up in the development of new menu items.
He also acknowledged under questioning that the company may hire someone out of the fast-casual sector to lead Pei Wei, which has been without a president since Russell Owens resigned late last year.
P.F. Chang’s closed 10 Pei Weis last year.
McDonald’s is the indisputable king of fast-food, based on its consistently strong financial results. By the same gauge, you’d have to give the crown in casual dining to Buffalo Wild Wings.
Comp sales for the first three months of Wild Wings' fiscal 2009 are running at 7% for franchises, 8% for company stores, CEO Sally Smith told investors yesterday. No one else in the sector is coming close to those sorts of gains.
Smith also detailed some of the new products slated for rollouts, and they’re absolutely brilliant—because they’re so simple. For instance, one of the new items is merely a twist on chicken fingers, quite literally. Twisted Chicken is exactly that.
Those products are being readied after the introduction late last year of flat-bread items that intended to be dipped before they're munched. Sauces, developed for BWW’s wings, are one of the chain’s signatures.
The other new items—barbecue-flavored nachos and Pepperoni Kickers, presumably a type of appetizer—are also simple extensions, which promise to keep serving times tight.
Executives noted that BWW opened 67 stores last year, and has $44.5 million in cash and marketable securities on hand.
Chipotle clearly feels it’s no bank in a bailout situation. The chain said categorically that it would not cut 2008 bonuses across the board for restaurant managers, a reflection of that position’s importance and the stellar performance of many doing the job. If they excelled, execs indicated, they’ll be collecting their promised incentive pay-outs.
Nor is the chain following the lead of Starbucks and virtually the rest of the industry by bundling menu items into bargain-priced packages. The approach would work against Chipotle’s founding principle of customizing each order, executives explained.
But, they acknowledged, the chain is experimenting with new menu boards that may be less intimidating to first-time visitors. A new set-up might also help regulars discover new flavor or meal combinations, they added, though they weren’t forthcoming with details.
P.F. Chang’s is testing several ways to underscore value at its Pei Wei Asian Diner fast-casual concept, including portion cuts with an accompanying price rollback, executives said during their conference call yesterday.
“We’re looking at offering some of the existing products in a smaller portion, smaller price opportunity. We are looking at the possibility of doing some more all-inclusive dining opportunities. And then we are also evaluating the general format of the menu as it sits today in relationship to its current price,” said co-CEO Rick Federico.
He also cited the possibility of doing bundled meals, where a drink, cup of soup, side salad or spring roll could be offered as part of the meal. And, he said, nine stores are offering certain meals as bowls instead of a plated offering.
Federico said the concept has evolved into more of a low-priced alternative to casual restaurants instead of a true quick-casual place, which has been “a bit of a competitive disadvantage.” Part of the remedy, he said, will be a step-up in the development of new menu items.
He also acknowledged under questioning that the company may hire someone out of the fast-casual sector to lead Pei Wei, which has been without a president since Russell Owens resigned late last year.
P.F. Chang’s closed 10 Pei Weis last year.
Tuesday, January 13, 2009
Simon didn't say 'do that'
The following is a public service announcement to the nation’s casual restaurant chains.
Have you lost your minds?
Part of the reason you’re currently living a blues tune is a lack of differentiation in your menus. Every concept could rename itself That Place Serving a Bloomin’ Onion, Nachos, Fajitas, Burgers, Spinach Dip and Margaritas, and it wouldn’t be lying. A follow-the-leader approach led everyone toward a cliff.
So how are you trying to right the situation? Consider the latest promotion from Applebee’s: A $9.99 sirloin served with two sides. In a stunning coincidence, the LongHorn casual chain is also featuring a $9.99 steak dinner as of this month. And Outback has been selling a 6-oz. sirloin as part of a dinner for a penny less than $10 for a number of weeks. What are the odds???
At least Ruby Tuesday and T.G.I. Friday’s, two concepts that had their starts as “fern bars” (youngsters, ask your folks, but DO NOT bring up leisure suits), are resisting the temptation to copycat. As Ruby CEO Sandy Beall told investors last week, “We believe our burgers offer [an] incredible, differentiated and value category that resonates well with our guests.”
Okay, the chain also noted during the conference call that it was pushing a $5.99 burger with all-you-can-eat fries. But it’s sticking with a key point of differentiation. I mean, what other casual chain offers burgers? It’s not like Chili’s or Red Robin are known for that item.
And Friday’s? Well, consider the promotional head-turner it started pushing yesterday. Here’s the headline from the announcement: “T.G.I. Friday's Restaurants Unleash The 'Ultimate' Burger.”
I think I need a margarita. Or a ‘Rita. Or maybe a Lobsterita.
What are the odds???
Have you lost your minds?
Part of the reason you’re currently living a blues tune is a lack of differentiation in your menus. Every concept could rename itself That Place Serving a Bloomin’ Onion, Nachos, Fajitas, Burgers, Spinach Dip and Margaritas, and it wouldn’t be lying. A follow-the-leader approach led everyone toward a cliff.
So how are you trying to right the situation? Consider the latest promotion from Applebee’s: A $9.99 sirloin served with two sides. In a stunning coincidence, the LongHorn casual chain is also featuring a $9.99 steak dinner as of this month. And Outback has been selling a 6-oz. sirloin as part of a dinner for a penny less than $10 for a number of weeks. What are the odds???
At least Ruby Tuesday and T.G.I. Friday’s, two concepts that had their starts as “fern bars” (youngsters, ask your folks, but DO NOT bring up leisure suits), are resisting the temptation to copycat. As Ruby CEO Sandy Beall told investors last week, “We believe our burgers offer [an] incredible, differentiated and value category that resonates well with our guests.”
Okay, the chain also noted during the conference call that it was pushing a $5.99 burger with all-you-can-eat fries. But it’s sticking with a key point of differentiation. I mean, what other casual chain offers burgers? It’s not like Chili’s or Red Robin are known for that item.
And Friday’s? Well, consider the promotional head-turner it started pushing yesterday. Here’s the headline from the announcement: “T.G.I. Friday's Restaurants Unleash The 'Ultimate' Burger.” I think I need a margarita. Or a ‘Rita. Or maybe a Lobsterita.
What are the odds???
Sunday, December 28, 2008
A genetically altered Cheesecake Factory?
Cheesecake Factory opened the first of its new downsized restaurants this month, a departure from the pricey cathedrals that’ve been a hallmark of the concept since its earliest days. Now it has a smaller, less-expensive prototype, just like everyone else in casual dining.
That concession to the times follows the addition of a menu section consisting solely of bargains, an asterisk to the chain’s positioning as a place of indulgence, as its luscious cakes or huge portions attest. Now deal hunters will find the same sort of values they might seek on other Friday or Saturday nights at Red Lobster, McCormick & Schmick’s, Outback or Mortons.
Point by point, the once high-flying chain is addressing the issues that have tempered its phenomenal financial success. But, in the process, is it engineering its way into one of casual dining’s biggest problems? Is it sacrificing dramatic points of differentiation to become like everyone else in the pack?
If I’m typical of Cheesecake’s fan base, patrons go there because the experience is over-the-top, from the 200-item menu to the portions, the unusual choices (Navajo Sandwich, anyone?) and the dramatic settings (insider’s note: Look for a sky scene in your local unit, a concession to the religious orientation of longtime leader David Overton). It’s not an overstatement to say it provides a sense of awe.
But awe doesn’t sell in this tight-walleted environment. Bargains, economy and accessibility are today’s stock in trade. Still, by curbing what’s been in its DNA to embrace those head-turning qualities, is Cheesecake thinking merely for the short term? Certainly this economic situation is a crisis, and hence by definition a passing pain.
I’ll be the first to admit that it’s easy for me to second guess one of the industry’s most successful executive teams. I don’t have investors, executives, landlords and employees looking to me to pull the concept out of the doldrums.
But I hope Cheesecake doesn’t sacrifice the counter-intuitiveness that made that brand a stellar success. When everyone was going for streamlined menus, it maintained a tome of fare. When nods to healthfulness were the order of the day, it continued to serve selections that could have fed whole Caribbean islands. When competitors shotgunned units into the market like space invaders focusing on street corners and malls, it grew slowly and with painstaking selection of sites (to the best of my recollection, it’s never had to close a restaurant).
It needs to think in evolutionary terms—how to tailor the brand to the times. Merely co-opting what’s worked for other casual-dining concepts is de-evolution of the worst kind. I hope the folks in Calabasas Hills are careful about how they navigate these perilous times. Otherwise, they’ll just be jumping the shark.
That concession to the times follows the addition of a menu section consisting solely of bargains, an asterisk to the chain’s positioning as a place of indulgence, as its luscious cakes or huge portions attest. Now deal hunters will find the same sort of values they might seek on other Friday or Saturday nights at Red Lobster, McCormick & Schmick’s, Outback or Mortons.
Point by point, the once high-flying chain is addressing the issues that have tempered its phenomenal financial success. But, in the process, is it engineering its way into one of casual dining’s biggest problems? Is it sacrificing dramatic points of differentiation to become like everyone else in the pack?
If I’m typical of Cheesecake’s fan base, patrons go there because the experience is over-the-top, from the 200-item menu to the portions, the unusual choices (Navajo Sandwich, anyone?) and the dramatic settings (insider’s note: Look for a sky scene in your local unit, a concession to the religious orientation of longtime leader David Overton). It’s not an overstatement to say it provides a sense of awe.
But awe doesn’t sell in this tight-walleted environment. Bargains, economy and accessibility are today’s stock in trade. Still, by curbing what’s been in its DNA to embrace those head-turning qualities, is Cheesecake thinking merely for the short term? Certainly this economic situation is a crisis, and hence by definition a passing pain.
I’ll be the first to admit that it’s easy for me to second guess one of the industry’s most successful executive teams. I don’t have investors, executives, landlords and employees looking to me to pull the concept out of the doldrums.
But I hope Cheesecake doesn’t sacrifice the counter-intuitiveness that made that brand a stellar success. When everyone was going for streamlined menus, it maintained a tome of fare. When nods to healthfulness were the order of the day, it continued to serve selections that could have fed whole Caribbean islands. When competitors shotgunned units into the market like space invaders focusing on street corners and malls, it grew slowly and with painstaking selection of sites (to the best of my recollection, it’s never had to close a restaurant).
It needs to think in evolutionary terms—how to tailor the brand to the times. Merely co-opting what’s worked for other casual-dining concepts is de-evolution of the worst kind. I hope the folks in Calabasas Hills are careful about how they navigate these perilous times. Otherwise, they’ll just be jumping the shark.
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