Ruby Tuesday hasn’t exactly pursued a me-too strategy for the post-Recession, as Restaurant Reality Check noted six months ago. So how’s that contrarian approach working?
Not well, judging from the company’s financial results for the October-through-November period. As you might have heard, Ruby lost $2 million for the quarter, compared with a net income of $4.6 million for the same period of the prior year.
Buying restaurants from franchisees, a 180-degree departure from what most chains are doing today, helped to raise revenues by almost 6 percent. But the gain was far more than offset by debt expenses and a steeper-than-expected decline in unit sales, which came despite new service and value initiatives.
Does that mean the company is scrapping its contrarian views? Well, yes and no.
As we noted here in July, the company’s namesake chain is betting it can win more bargain-hunters by giving customers access to its salad bar without an add-on charge. It’s sticking with that more-is-lots-more approach. In a call with financial analysts, executives spoke cryptically of additional service enhancements that are currently in test at 10% of company-run Ruby units.
They didn’t reveal all the components of the new Surprise & Delight initiative, but did divulge such components as shaking martinis tableside, and having servers grate Parmesan cheese onto patrons’ entrees after they’re served.
But the biggest disclosure was a mention that Ruby plans to follow the herd for a huge savings on routine restaurant upkeep—repair & maintenance, or R&M, in industry parlance. Instead of letting each restaurant handle that function, Ruby is going to centralize control, “which a lot of the QSR chains and some of the other casual dining chains have gone to,” explained CEO Sandy Beall.
Ruby is confident it can deliver millions in savings by consolidating its expenditures for R&M. “It's approximately [a] $40 million spend a year annually, and we believe that through using a consolidated group that we can better monitor our rates and our costs on the actual parts and what have you,” said EVP and operations specialist Kimberly Grant.
“It's basically bulk buying power for the services we're participating with,” added Beall. “It's like a huge co-op, so better pricing.”
Showing posts with label salad bars. Show all posts
Showing posts with label salad bars. Show all posts
Monday, January 9, 2012
Wednesday, December 22, 2010
Is the restaurant industry really at risk?
One of the first conferences I attended after 9/11 was a convention on food safety. The meeting had been planned in the pre-September days when viruses and other micro-pathogens were regarded as the main threats. But the terrorist attacks in New York and Washington hijacked the focus, shifting it to food security. Instead of discussing accidental restaurant poisonings from E. coli and other bugs, speakers spoke of the supply chain’s vulnerability to purposeful contaminations by fanatics looking for a stealth weapon of mass destruction.
In one memorable breakout session, two renowned safety experts worked with the audience to identify the greatest risks. They noted that common ingredients like spices and coffee lent themselves to tampering, and were often harvested in areas known to be at odds with the United States.
Sugar was cited as a particular vulnerability because it wasn’t very regulated and was used in so many processed foods. Poisoning that ingredient sounded so easy that I used a made-up name for the sweetener in a column covering the conference. As crazy as it sounds today, I didn’t want to give terrorists any ideas.
We were all worried about monsters under the bed back then. After awhile, that level of suspicion seemed almost hysterical. Life for the food business remained more normal than the conference might’ve suggested, and bacteria and viruses again emerged as the main threats.
Then came the CBS News report earlier this week that terrorists were planning to poison the salad bars of restaurants and hotels in a coordinated weekend attack. It said an anonymous intelligence official had confirmed the threat as “credible,” and noted that the U.S. Department of Homeland Security had gathered safety officials from the restaurant and lodging industries to brief them on the potential danger.
The report was exclusive to CBS. In the news business, that makes you suspicious. If the account was true, why couldn’t any other medium independently verify it? Certainly they would’ve tried with a story that big.
Nor have other authorities come forward to confirm it.
But they haven’t denied it, either.
Joe McInerney, the straight shooter who heads the American Hotel & Lodging Association, told USA Today that his group wasn’t invited to any security briefing by Homeland Security.
But he did shed some light on the matter. There was what he described as a standing meeting between Homeland and hospitality officials on the Friday before the CBS report. He also noted that the hotel industry has long been considered a “soft target” for terrorists.
And he said the lodging trade is taking precautions. The AH&LA is putting together a webinar for hotel employees on averting an attack on buffets, McInerney explained to USA Today.
It will also provide properties with info cards that can be inserted in employees’ paycheck envelopes, alerting them to say something if they see something suspicious.
The restaurant industry has so far been mute. But it’s just a matter of time until the issue gets a finer, more prodding point. What happens at a salad bar or buffet concept with employees who are believed to be Muslims? Will management try to hide them? Or just dismiss them? It's not a stretch to think buffet places could take a hit, regardless of who's working for them.
Similarly, how will employees and other customers react when they see a possibly Muslim patron head to the buffet?
Clearly there are two issues the industry has to address.
First, there’s the report itself. Is it true?
Second, and perhaps regardless of the answer to that first question, how is the industry going to deal with the suspicions? At the very least, the report poses a very real threat to places with salad bars and buffets, whether the story is accurate or not. Consumers may not be willing to undertake what they see as a risk.
Time extinguished a lot of fears after 9/11. But the restaurant industry shouldn’t count on that remedy this time around.
In one memorable breakout session, two renowned safety experts worked with the audience to identify the greatest risks. They noted that common ingredients like spices and coffee lent themselves to tampering, and were often harvested in areas known to be at odds with the United States.
Sugar was cited as a particular vulnerability because it wasn’t very regulated and was used in so many processed foods. Poisoning that ingredient sounded so easy that I used a made-up name for the sweetener in a column covering the conference. As crazy as it sounds today, I didn’t want to give terrorists any ideas.
We were all worried about monsters under the bed back then. After awhile, that level of suspicion seemed almost hysterical. Life for the food business remained more normal than the conference might’ve suggested, and bacteria and viruses again emerged as the main threats.
Then came the CBS News report earlier this week that terrorists were planning to poison the salad bars of restaurants and hotels in a coordinated weekend attack. It said an anonymous intelligence official had confirmed the threat as “credible,” and noted that the U.S. Department of Homeland Security had gathered safety officials from the restaurant and lodging industries to brief them on the potential danger.
The report was exclusive to CBS. In the news business, that makes you suspicious. If the account was true, why couldn’t any other medium independently verify it? Certainly they would’ve tried with a story that big.
Nor have other authorities come forward to confirm it.
But they haven’t denied it, either.
Joe McInerney, the straight shooter who heads the American Hotel & Lodging Association, told USA Today that his group wasn’t invited to any security briefing by Homeland Security.
But he did shed some light on the matter. There was what he described as a standing meeting between Homeland and hospitality officials on the Friday before the CBS report. He also noted that the hotel industry has long been considered a “soft target” for terrorists.
And he said the lodging trade is taking precautions. The AH&LA is putting together a webinar for hotel employees on averting an attack on buffets, McInerney explained to USA Today.
It will also provide properties with info cards that can be inserted in employees’ paycheck envelopes, alerting them to say something if they see something suspicious.
The restaurant industry has so far been mute. But it’s just a matter of time until the issue gets a finer, more prodding point. What happens at a salad bar or buffet concept with employees who are believed to be Muslims? Will management try to hide them? Or just dismiss them? It's not a stretch to think buffet places could take a hit, regardless of who's working for them.
Similarly, how will employees and other customers react when they see a possibly Muslim patron head to the buffet?
Clearly there are two issues the industry has to address.
First, there’s the report itself. Is it true?
Second, and perhaps regardless of the answer to that first question, how is the industry going to deal with the suspicions? At the very least, the report poses a very real threat to places with salad bars and buffets, whether the story is accurate or not. Consumers may not be willing to undertake what they see as a risk.
Time extinguished a lot of fears after 9/11. But the restaurant industry shouldn’t count on that remedy this time around.
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