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.

Wheels are turning in Sonic's new thinking

Don’t tell Sonic Drive Ins that skating carhops are some old-timey gimmick. As executives recently explained to investors, putting servers on skates is an important element of the chain’s revised business strategy, along with revamps of menu classics like burgers, hot dogs and ice cream.

Sonics where meals are delivered to cars by roller skaters score considerably higher on guest satisfaction surveys than do units where the servers are flat-footed, explained CEO Cliff Hudson. Customers are not only more pleased, but visit more often and tend to spend more when they do. “We do see a sales differentiation,” he said.

Profits are also higher, though Hudson didn’t reveal if that was a function of better margins or merely the higher expenditures.
“So it's higher level of transactions, higher sales, higher profitability,” Hudson said.

He noted that more than half of all company-run Sonics currently feature skating carhops, and that “just below 50%” of franchises offer the service.

“WE continue to grow this,” Hudson said. “It's an opportunity for continued improvement and the customer experience and one that we think further differentiates us versus the competition.”

During Monday’s conference call with financial analysts, Hudson also noted that Sonic will take the silver dome off a revised hamburger this fall. It plans to advertise an improved, bulked-up Coney, or oversized hotdog, he indicated.

Merci! Are they kidding?

The sanctimonious guardians of family values almost lunged out of their jackboots when McDonald’s ran a French commercial suggesting the young male star was more interested in other dudes than he was in girls.

Now the blogosphere is sloshing with indignation because the chain ran the spot only in France. The self-righteous NPR set is blasting the company as a lap dog to the ultra right because it has confirmed publicly that the ad isn’t scheduled for a U.S. airing.

The latest flashpoint was the interview that McDonald’s president Don Thompson gave on Sunday to the chain’s hometown paper, the Chicago Tribune. “You're right, that commercial won't show in the United States,” Thompson blasphemed.

Thompson, the sort of guy you’d love to have at a family barbecue where the big game is on, made that utterance more than a week after the U.S. National Gay & Lesbian Chamber of Commerce alerted McDonald’s that it would have nothing more to do with it. No longer would the burger chain be welcome to sponsor any Chamber functions, or even to be a member. A pro-inclusion group by its very definition was excluding a party from all interactions because of its “blatant geographic pandering.”

McDonald’s just can’t win. It has the McNuggets to run an ad that depicts what’s likely a touchstone experience for millions of gays and lesbians, something 90% of big consumer brands would never dare to try on this planet. The spot wasn’t preachy or showy, an on-air equivalent of professing that some of its best friends are gay. It was just another slice-of-life-type spot—McDonald’s advertising stock in trade—that happened to have a gay protagonist this time around.

Yet the company is blasted for not running the spot in the U.S., a market where ads for erectile dysfunction aids have been attacked for promoting recreational sex.

[Full disclosure: I’m a strong advocate of recreational sex. Especially with a partner.]
Commercials dealing with menstruation have to lapse into safe-speak, like having Mother Nature delivering a “monthly present.”

The damned-if-you-do-or-don’t situation is especially ironic because McDonald’s had the courage several years ago to put an executive on the Chamber’s board. That unambiguous hurrah for inclusion drew considerable heat from Bible thumpers and conspiracy theorists, who accused the chain of pursuing a homosexual agenda.

I remember how one irate group ran a picture of Ronald McDonald interacting with a boy dressed as a pirate and a girl outfitted as a princess. The artwork was clearly intended to suggest that Ronald might’ve considered becoming a priest at some point.

Parties that blast McDonald’s for not being louder in championing inclusion should keep that lapse from reality in mind. Their real opponent isn’t the chain, it’s the extremists who think they can deny the diversity of mankind by assailing any party that so much as suggests there’s no mold for good, right-being folk.

McDonald’s is trying to put some cracks in that thinking. Don’t slam it for foregoing a sledgehammer.

Aren't they supposed to sell the food?

Uh-oh. If the restaurant industry is getting back on its feet, why are so many chains reverting to food giveaways, the traffic builder of choice during the downturn’s darkest days?

Today you can grab a free cup of Popeyes’ new cane-sugared sweet tea (translation for northerners: An iced tea that’s made with sugared water). Then again, maybe you’d prefer one of Taco Bell’s new Limeade Sparklers, available without charge if you download a coupon from the chain’s website.

Diabetics could really be in trouble if they’ve been scouting the deals. Friendly’s recently gave away a scoop of ice cream, and Mimi’s Café offered four free muffins on Wednesday to any patron who bought a breakfast.

Either giveaways are going to remain part of the marketing arsenal, or maybe traffic is softer than the numbers reveal.

Either way, it’s enough to make you hope for a two-for-one cocktail special.

Let's hear it for the old guys

Being of a certain vintage, I took great delight in the two major executive changes of the past week. Old guys, it seems, are making a comeback.

To wit: Phil Hickey, one of the most capable guys ever to grace a restaurant company’s corner office, took over the CEO’s responsibilities at O’Charley’s after the departure of the considerably younger Jeff Warne. It’s not that Phil’s hobbling around on a walker, or that Jeff skateboarded to work each day. But the former is of that generation that’s becoming a rarity in the foodservice executive suite these days, the top-level official who worked his or her way up from a unit-level post.

Along the way, Hickey picked up more than a few bucks by shepherding the sale of his last big company, LongHorn Steakhouse parent Rare Hospitality, to Red Lobster operator Darden Restaurants. I seem to recall some notation in a proxy that the deal turned Hickey’s stock into tens of millions of greenbacks.

In short, he doesn’t have to work anymore. But his wisdom and operational know-how are needed once again to right a chain and steer it forward. Hickey, an O’Charley’s director, will stay at the helm until a new CEO is piped aboard. It’s enough to make me want to turn a cartwheel. If only there wasn’t that danger of throwing out my back or scuffing my spats.

But he’s not the only veteran with a memory of rotary phones to be called off the bench in the last few days. Out on the West Coast, Grill Concepts filled the vacancy left by the departure of Philip Gay with Bob Spivak, the concept’s founder and longtime chief. At age 66, he’s back running the operation he founded in 1984. It now consists of 28 upscale Daily Grill and Grill on the Alley restaurants, along with a lone fast-casual variation, Short Order – Daily Grill.

Could I get a “23 skeedoo!” on that, folks?

A new trend to noodle over

Several weeks ago, the Wall Street Journal reported that two pasta chains were opening their first U.S. restaurants a few blocks from one another in New York City. With all due respect to that august chronicler of business developments, it completely missed the story.

Subtly, with an opening here, an announcement there, a key appointment two cities over, a new restaurant trend is emerging, clad in crisp chef’s whites. It’s actually an echo of what happened with burgers and tacos. When both those products where turned into commodities by the fast-food chains, famous chefs started re-inventing them to great success, using high-quality ingredients and the marquee value of their names. Now we have Marcus Samuelson peddling burgers and celebs like Rick Bayless and Paul Kahan moving more street tacos than whole counties might in Mexico.

All signs say the same thing is beginning with low-end Italian fare, specifically pasta and pizza. We’re seeing the first red tide of places offering fare of the same quality you’d get in a higher-end restaurant, but at prices closer to what the public would pay at a fast-food outlet. It’s affordable high quality, a la Chipotle, Pei Wei and Five Guys.

The development promises to be a powerful riptide in the fast-casual wave.

As the Journal article reported, New York will soon sport outlets of Hello Pasta, an upstart concept started by two Europeans and an American. Prices will range from $6.95 to $12, the story noted.

Its challenger will be the first American outpost of Nooi, an established French chain that specializes in pasta presumably priced in the same range as Hello Pasta’s.

The story failed to note that another European transplant is also looking to snare new Yorkers with its linguini. Vapiano, the German pasta and salad concept, announced plans some time ago to advance northward from its U.S. beachhead of Washington, D.C.

But the list doesn’t stop there. A friend mentioned that she’d crossed paths out at the National Restaurant Association convention with Howard Gordon, a former longtime executive of The Cheesecake Factory. Gordon mentioned that he’s now working with a pasta concept that’s putting its pot to boil on the West Coast.

Meanwhile, one of the emerging segment’s pioneers is hoping to be rejuvenated by its new owners. Pasta Pomodoro, a now-29-unit chain previously owned by Wendy’s, was purchased at the start of the year by several investors from its home turf of northern California. The full-service concept offers quality pasta at a price consistent with a fast-casual place. It was conceived a consideral time ago by fine-dining chef Adriano Paganini to fill the niche all the other upstarts are now targeting.

Then there’s Pitfire Artisan Pizza, the four-unit pizza-and-pasta chain in southern California. The concept’s executive chef is Michael Ainslie, the former culinary chief for Tesco’s Fresh & Easy gourmet food shops in the southwest. All of its pastas are priced under $10, and its most expensive pizzas, including the Greens, Eggs & Ham, cost $10.25.

The Journal article might’ve missed the bigger picture. But its first line was dead-on: “Let the pasta wars begin.”

Like parents, like children

If the restaurant industry truly is a God-awful place to make a living, why does it draw so many youngsters who know exactly the sort of life they can expect? They’re the ones who’ve grown up in the business, witnessing firsthand the tribulations and opportunities it dealt their parents. But instead of driving them to law school or a saner field like engineering, the experience set the ketchup pumping through their veins.

That disproval of conventional wisdom was evident during the industry’s annual gathering last week in Chicago, where second-generation restaurateurs were as plentiful and prominent as Yankees on the All-Star ballot. I participated in a panel discussion with Jerrod Melman, who runs the city’s popular Hub51 restaurant with his brother, R.J. Their dad, Rich, runs a restaurant or two in the Windy City as well. (If you’re in the business and don’t know who Rich Melman is, hold a mirror in front of your nose and mouth to confirm the expiration, then neatly fold both hands atop your chest and await the undertaker).

When I wasn’t enriching the Melman clan during evenings at the show, I was likely milling outside the Purple Pig, wondering if I’d somehow been mistakenly transported to Wrigley Field before a game. The Michigan Ave. restaurant is the new venture of Jimmy Bannos Sr. and Jr. Jimmy the Elder is the proprietor of Heaven on Seven. The other J.B. is his son, also a chef (via New York) and restaurateur. For four nights straight, at all different times, I couldn’t cut through the throng to get a seat at the bar or common tables.

Instead, I amused myself with the latest blog chatter about a dustup in New York involving Marc Forgione, the son of famed chef Larry Forgione. The younger Forgione had scolded an employee within earshot of diners, including a writer for the New York Times. The scribe went into Forgione’s kitchen to express his dismay and ask the chef to stop.

Forgione apologized to customers, but asked the Times writer to leave, saying he wouldn’t be chastised in his own kitchen.

Okay, maybe Larry needed to focus a little more on management styles with his boy. But the point is, Marc followed his famous daddy into the business, and now cooks at a place that plays tribute to the family name, Restaurant Marc Forgione.

They’re prominent examples of a generation following the preceding one, eyes wide open, into what’s popularly portrayed as a career of last resort. Further refutation is provided by succeeding generations of Doolins, Luthers, Pettises, McCormicks, Metzes, Grotes, Thomases, and of course Brennans.

Parents always want their children to do better than they did. It’s remarkable that so many offspring pick the restaurant business as the way to make their parents proud.