Study says longer recovery for industry is on the horizon
that respondents indicated they
would be willing to pay also
dropped, from $13.25 in the first
quarter to $11.49 in November.
“That in itself is interesting,
one of our most compelling findings,” Werner said. “That’s a
20-percent reduction in just nine
months. When you translate that
to 950,000 restaurants across the
country, it’s a significant drop.”
Frank Guidara, president and
chief executive of Uno Chicago
Grill, the 200-unit casual dinner-house chain based near Boston,
suggested that pervasive discounts had more to do with the
drop than consumer frugality.
“I think I’m stating the obvious
here, that there is a lot more discounting going on, a lot more meal
deals,” he said. “I’m not even sure
that a reduction in [spending]
would be intentional on the part of
the consumer, but more by virtue
of the couponing that just about
everyone is offering.”
Consumers, inundated with
deals, have come to expect them,
forcing operators to find other ways
to stand out from their competition, said Fleiss of AlixPartners.
“For restaurant operators, to
have [a value promotion] is not a
point of differentiation now — it’s
your ante to get into the game,”
he said. “And because everyone
has one, the differentiation has to
be quality. With all the promotions out there, operators are having to get back to the fundamentals of who’s delivering the best
food.”
Many restaurateurs are trying
to do just that.
Mike Woodhouse, president
and chief executive of Cracker
Barrel Old Country Store, the 588-
unit casual-dining restaurant
company based in Lebanon, Tenn.,
told Nation’s Restaurant News
earlier this year that he is committed to delivering a value proposition that has nothing to do with
discounting.
“What happens in a recession
is that the customer has less money to spend, so he or she is more
careful when they do spend it,
more careful at getting the best
deal,” he said. “Now that’s not necessarily the cheapest or a buy-one-get-one, but it’s the best deal in
terms of great food, great quality
and great service. They know
we’re not going to change things
CONTINUED FROM PAGE 4
on them. We haven’t downgraded
anything we serve on the plate. In
40 years we’ve never had to discount [our prices]. And during this
recession, we’re running better
guest traffic than most of the rest
of the industry.”
But while operators with lower
check averages are finding ways
to navigate the new consumer psy-
che, the casual and fine dining
segments are likely to struggle
into next year, said Fleiss and
Werner.
“That’s the other piece in all of
this,” Werner said. “Fine dining
still hasn’t figured out the equation. Business dining is still way
down and promotions are not
CONTINUED ON PAGE 45
Jim Koch stands behind every
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For the last 25 years, Jim Koch has focused on one thing - Samuel Adams beer. He’s still
obsessed. From tasting a sample from every batch, to hand selecting the hops each year in
Bavaria, Samuel Adams Boston Lager® always has to meet his standards.
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