Nation's Restaurant News - February 22, 2010

oped a “value-engineered” version of the remodel at a corporate unit in Inglewood, Calif., which is reporting sales increases of about 25 percent.

The redesign also includes a new menu, which has been simplified. In addition, more food preparation is being done in-house — from soups to salad dressings — which helps bring down food costs.

Hand-cut steaks, shrimp and salmon remain core items, but the new menu includes a grilled pork chop and value-focused combination meals. For example, a meal of steak, lobster, a baked potato and one trip to the salad bar is priced at $17.99.

Sizzler moved away from its buffet format years ago, but the extensive salad bar remains a key selling point at a time when consumers are looking for more for their money, Kramp said.

Consultant Dennis Lombardi, execu-
tive vice president of Columbus, Ohio-
based WD Partners, said Sizzler officials
“are doing absolutely the right things at
the right time for this brand.”
But the challenge for Kramp, he added,
is proving the long-term viability of the
rebranding.

“The test will be how well these unit economics endure 12 months or 24 months after the remodels,” Lombardi said.

In 2004, Shakey’s USA was acquired by Jacmar Cos., which at the time was the brand’s largest franchisee. The new owners revamped the recipes for the signature pizza, as well as the fried chicken and “Mojo” fried-potato rounds.

A round of remodels completed in 2007 boosted sales, Remsa said. Through July last year, Shakey’s had seen 46 consecutive months of same-store sales increases. The company finished 2009 down only 0.8 percent, numbers that many in casual dining might find enviable.

Today Shakey’s has 60 corporate and franchised locations, the newest of which is scheduled to open in Hawaii this week.

Over the past five years, Remsa said the company has closed about 15 “brand destroyers,” older units that were not run well.

Now the company is looking at further upgrades. In November, Shakey’s debuted a new prototype — what they are calling “Shakey’s 3.0” — which includes a new beer-and-wine bar and multiple large flat-screen TVs to draw sports-watching adults.

Kids can still play in adjacent game rooms, but the goal is to position the brand as a family-oriented sports bar where a “meal deal” combo of pizza, chicken and Mojos can feed five to six for $36.

“At the end of the day, we’re not a pizza
business, we’re an experience business,”
Remsa said. “That’s always been part of
the brand.”
Though still young, the new location
is exceeding expectations and will be the
model for new units going forward, Remsa
said. Three domestic franchise units are
scheduled to open in 2010.

Both Shakey’s and Sizzler may be benefiting from the recession as both offer a value message inherent in the brand, observers noted.

with its rebranding effort, which began in 2006 and continues to evolve.

Founded in 1972 in Kansas City, Mo., Houlihan’s grew into a national chain but faltered in the 1990s, when casual dining became crowded with similar concepts.

Chief executive Bob Hartnett bought the company out of bankruptcy in 2002 and private-equity firm Goldner Hawn, based in Minneapolis, took a controlling position in 2006 with $68 million in growth capital.

Soon after, the “Houlihan’s of the 21st Century” debuted, attempting to carve out a niche that was more stylish and upscale than previous incarnations, with a bigger focus on the bar, Gulvik said.

“We called it hip casual,” she said.

Last year the now 97-unit chain took
it a step further with a new menu that
included the introduction of 25 new small-
plates dishes that Gulvik said appealed to
Millennials, who tend to be social diners,
sharing plates and grazing.

ljenning@nrn.com

Shakey’s stirs up sales
with remodels

Shakey’s faces the same challenge as it considers yet another remodel phase.

Founded in 1954, Alhambra, Calif.-based Shakey’s USA also has struggled under multiple owners. In its heyday of the early 1970s, when the pizza concept was known for Dixieland bands and servers in pin stripes and straw hats, Shakey’s had 535 units nationwide, said Joe Remsa, president and chief executive.