Restaurant Trade Area Research

In an excellent marketing move very likely to covert some folks into NEW breakfast users - Subway has made the Bacon, Egg, and Cheese Flatbread - The FOOTLONG 5.00 Sub of the month. One would assume that introducing a new daypart into a long standing competitive marketplace segment, breakfast, as Subway did last year, is a slow go at best. However, this featuring of the breakfast daypart sandwich - ALLDAY- should certainly get lunch and evening trial and therefore potentially stimulate the breakfast daypart. (Hasn’t McDonald’s said in the past that they were going to make their fun menu an allday choice? Burgers before 10:30 and Biscuits in the afternoon?) http://www.subwayfreshbuzz.com/menu/footlong_of_the_month/ GREAT IDEA.

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IS Sbarro going under? - Sbarro Wins Court Approval of $16.5 Million Financing While in Bankruptcy  - http://www.bloomberg.com/news/2011-04-05/sbarro-wins-court-approval-of-16-5-million-financing-while-in-bankruptcy.html - article sites rising cheese costs and slowing consumer sales. Long time brand names going under reflects the real market IMO.

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Carl Jr’s and Hardee’s go ALL IN on Turkey Burgers. - http://www.restaurantnews.com/carls-jr-hardees-first-national-fast-food-chains-offering-charbroiled-turkey-burgers/ - FIVE versions, heath positioning — first to do — great moves. Is TURKEY the next Angus?

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Meanwhile, BK has pulled back on forcing stores to stay open til 2AM - http://www.miamiherald.com/2010/12/15/1973901/burger-king-pulls-back-on-after.html — win for franchisees –  Here’s Saladworks approach to helping new franchisee operators find new site locations - http://www.restaurantnews.com/saladworks-executive-team-searching-for-new-sites/ - excellent reading.  —– My only suggestion would be to have some outside independent person (like myself) who has conducted trade area research at hundreds of FF restaurants - to also provide suggestions, especially if a location of the brand is already in the market and cannibalization is an issue.

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Sometimes it is funny reading employee reactions to various advertising campaigns - like this of an Arby’s employee - http://www.ryanlmueller.com/2011/02/nibble-giggle-repeat.html and here is another opinion - http://makethelogobigger.blogspot.com/2011/03/mcarbys.html

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In more evidence of the `recovery’ being largely spotty, segmented,  and a reflection of `reverse attrition’ from the closing of so many restaurants - Seafood restaurant sales largely in the tank - http://www.orlandosentinel.com/business/os-eating-less-seafood-20110227,0,711787.story and, as I’m sure you are aware - Analysis: U.S. immigration probe fears weigh on Chipotle - http://www.reuters.com/article/2011/03/01/us-usa-immigration-chipotle-idUSTRE72007S20110301

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Just a few posts ago - I suggested that as a result of the new normal for the restaurant segment of American Business - that perhaps we could look for some restaurant chain which currently has tipping as part of the experience to drop it altogether or modify it significantly. http://restauranttradearearesearch.com/2010/09/13/could-new-business-model-for-casual-restaurants-be-no-tipping/ Wondering out-loud if the rise of the fast casual segment (Panera Bread and many other variations) has to do somewhat with the perceived savings involved with tips; especially with party sizes such as families.

A way, seemingly, of giving the family a cooked to order experience usually in what can be described as a busy but fun atmosphere; while still having the image not being fast food to boot. Simply, a less expensive, substitute, for the old `casual’ restaurant experience. A trade down with benefits - both in being `better’ than fast food (heat lamps, uncertainty) and less costly than smiling for a wait person.

Also, one has to wonder if the new normals overall effect of bringing the range of travel somewhat towards home if not at home for vacations - the so-called Staycation - might allow for the consumer to justify at least a level of maintenance to the previous level of restaurant usage (after having adjusted somewhat downward in frequency). The adjustments of the middle class to the economic outlooks around them.

Which further begs the question? Can a no-tipping option at the causal restaurants really be off the table? Is a new business model really that hard to envision? Would business BOOM? (To whoever did it first?)

It’s Friday night, you decide to take `the fam’ of 4 (two growing teens) to dinner at a place that will have good food and good times (where you can have a beer). In the `olden days’ that might mean a visit to Chili’s or Friday’s - but - with the rise of the `fast casual’ segment of the restaurant business - it might mean taking `the fam’ to one of those new `upscale’ burger places; such as a place called Canyon’s in Woodstock, Georgia; but, most likely, such a place now exists within your community too with one of a thousand names.

These `fast casuals’ often have beer, wine, big screen TV’s and a fun atmosphere - AND - serve your food to your table when ready - with the `house waitresses’ (whoever grabs your food immediately when it become available from the kitchen - as opposed to IT sitting under a lamp while YOUR waitress is busy with others). And, when the good, hot, quality food is served by a friendly wait person -  it mentally hits the `restaurant decision maker’ - who has already paid for the food at the counter when ordering the made to order food - “I can save a LOT of money here (compared to a `casual’ style restaurant) — BECAUSE I don’t even tip anyone.”

And, in this economy of the new normal, where any purchase demands Quality of product AND at a VALUE price- can the days of 5-10 dollar tips be with us much longer for a `fam’ meal? Or, is it more likely that some casual restaurant will begin to treat `wait staff’ like other businesses models that do NOT depend on `customers supporting’ the employees paylevels - AND ATTITUDES? (Wait staffs can easily have `attitude’ problems when being overworked, undertipped, or having fewer customers and income than in the past - which makes one feel more obligated to tip 20% than before.)

Let’s compare a now typical choice in the restaurant marketplace.

                                  Casual Dining                      Fast Casual

Four meals                    36.00                                    28.00

Soft Drink/2 Beers      10.00                                      9.00

Tip                                       7.00                                      0.00

Total                                  53.00                                  37.00 

Is tipping beginning to be perceived as `needless markup’ and as `hidden costs’? Would customers be happy to know that a wait person is a salaried employee? Will customers really miss the 3 `checkbacks’ on how the meal is/was - or the dessert selling? Would wait person `turnover’ be reduced? Would wait person attitude be improved knowing livelihood was not dependent on upselling and frugal customers?

Would meals really cost that much more if tipping was eliminated? Shouldn’t business models exist that are not tip dependent in table service restaurants? If the new normal continues - I think we will find out - after all - wouldn’t `we pay our employees well, so you don’t have to’ - make sense?

(Customers could still have a voluntary 1.00 `check off `superior service recognition’ box on a bill too.)

Restaurant Food Service Equipment
Design and Equipment for Restaurants and Foodservice: A Management View

When the term `survival’ is used concerning any restaurant chain - it is not good news - especially when trying to change the positioning to more upscale in the new normal. But, that is exactly what RT is trying to do to create some positioning difference from competitors such as  Applebees, T.G.I. Friday’s and Chili’s. Read more of the strategy here - http://www.theledger.com/article/20100722/NEWS/7225054/1001

And, as you the restaurant owner knows that the new normal means - US Restaurant Count Down by 5,204 From Last Year, Reports NPD - http://www.restaurantnews.com/us-restaurant-count-down-by-5204-from-last-year-reports-npd/ 

McDonald’s, once again, is heads and tails above the rest in effectively following the trend to fresh and fruit - Customers Go Bananas for McDonald’s New McCafé Real Fruit Smoothies - http://www.restaurantnewsrelease.com/customers-go-bananas-for-mcdonalds-new-mccafe-real-fruit-smoothies/852184/

Or, you can take this approach to new products - being outrageous - KFC’s Double Down fails to take off http://money.cnn.com/2010/07/14/news/companies/kfc_double_down/index.htm?source=yahoo_quote

Here’s another story on Wendy’s going upscale with their salads (and upscale in price) - http://www.walletpop.com/blog/2010/07/09/wendys-upgrading-salads-but-it-will-cost-you/

And, Ruby Tuesday’s is not the only casual restaurant hoping to advance in the new normal - Can O’Charley’s find a recipe for success? - http://www.dnj.com/article/DN/20100704/BUSINESS01/7040332/1088/BUSINESS/Can+O+Charley+s+find+a+recipe+for+success

More Soon.

Hello, welcome back to the Restaurant Trade Area Research (RTAR) blog - thanks for stopping for a read. And, as you can see by the title of this post — once again in our depressed economy - where the discretionary dollar is scarce - where one restaurant unit after another closes - price points remain criteria number one for most restaurant chains.

Locally in northern Georgia - Mcdonald’s and Steak and Shake have met the Sonic reduced drink prices in the afternoon - Checkers has finally positioned a dollar menu — and as mentioned before Quizno’s `reduced prices’. And, two more restaurants have bitten the dust in the Woodstock Ga. market - Sonny’s BBQ (unbelievably) and the Woodstock Restaurant (daily buffet) - bringing nearly half a dozen closed up restaurants to Woodstock HWY 92 in the last few years.

But, it doesn’t end there - as the casual sit-downs are firing back on the price front with TGIF’s offering a buy one get one — with that being matched by other competitors like O’Charlies. And:

1-Wendy’s —- 3conmics (99cent choices) 2. Free Pancakes at IHOP tomorrow 3. Denny’s recent free grand slam breakfast 4. Steak and Shake’s recent `free combo’s for a year’ giveaway at local Atlanta locations 5. Fazoli’s - BOGO (buy one - get one) 6. Dunkin Donuts 1.99 breakfast combo 7. Starbucks - Breakfast value meal 3.95 — 8. McDonald’s Specials (like 3.33 for a Big Mac Combo) 9. Ruby Tuesday’s combo’s at 5.99 — Likewise Hooters 5.99

Makes one wonder when some chain will be bold enough in the south to make sweet tea a different price 24 hours a day - like 59 cents with any other purchase.

Finally, seems the burger front may be heating up - first Burger King’s mini’s will put pressure on Krystal’s and Roast Burgers at Arby’s - should compel trial. 

Hello, thanks for visiting my blog about restaurant research - something I’ve done for over 30 years. As you might know, I’ve been trying to bring to you a blend of posts - some with insights about marketing research and others just commentary on the whole subject of restaurants.

The data of this website also indicates that on posting days — we are getting 100’s of visitors who sometimes hit and read as many as 8 links each (but, generally it’s 2-5 links each). I say that so that you know that if you just continue to `read down’ the page that you will probably find lots of interest to a restaurant owner or manager like yourself. (Corporate folks are allowed to read too. Lol)

Today, I’ve decided to continue last weeks look at particular fast food (FF) commercials (last weeks post was Arby’s `Marry A Goat’ ad) - this week I’m posting on one of my personal alltime favorites - The Burger `King’ — if you’d like to know more about his history - use this link - http://en.wikipedia.org/wiki/The_Burger_King .

As you know, I panned Arby’s `Marry The Goat’ ad as `too edgy’ in my last posting (that said, it does get across the main selling idea of a combo at 5.00) and just too creepy. No, for creepy, - at an appropriate level - The Burger `King’ is the epitome. It is also great that `King’ is only used sparingly and with many different commercial versions on-going.

My favorite King commercial is, as I posted recently, - the `reverse bandit’ King who ends up getting SMASHED by a car. Totally smashed in a manner that a human would never survive - only the King - with the unchanging face.

Two different chains - two different takes on saving money - with two different takes on Creepiness. I can’t wait for Halloween.

Restaurant Links For Today

`Bud For A Burger’ - Pot Not Currency At McDonalds

http://www.cbs12.com/news/pannullo_4710070___article.html/pay_marijuana.html Figured we’d start with the humor — yep, someone tried to buy food with marijuana. Humorous 20 second read.

`Economy Weakens Restaurant Stocks’

http://latimesblogs.latimes.com/money_co/2008/10/worries-about-c.html Cheesecake Factory singled out.

`Casual Dining Chains - Seek Compelling Attributes For Sales’

http://www.walletpop.com/article/_a/bbdp/casual-dining-chains-hunger-for-change/210940?icid=200100397×1211186403x1200670159  This is a LONG in-depth article about the many ways that the casual dining chains (Ruby Tuesday’s, Friday’s - etc) are trying to re-tool their approach to the American consumer.

`The Delivery Debate’ - Should FF Consider?

http://www.qsrmagazine.com/articles/features/120/delivery_debate-1.phtml A well balanced read about the whole subject - pro, con, and other viewpoints. A good read for sure. Brand extensions are important.

`Krystal’s Drive IN Concept’

http://www.franchising.com/pressreleases/9135/ Here’s an example of a brand extension.

`New Zaxby’s’

http://www.murfreesboropost.com/news.php?viewStory=13214 Make sure any locations you open get coverage of this level. Great example of PR. (From a bit back.)

`New Opinion On Food Labeling’

http://voices.washingtonpost.com/checkup/2008/10/restaurant_food_labels_revisit.html This is a quick read about someone who changes their mind about FF chains printing calorie counts and such — interesting read.

Ok, that’s it for today, please bookmark us and comeback next week — also, please keep reading down the page. How about a comment?