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The restaurant industry has seen turbulent times with the recession causing cust omers to opt out of dining out. Quick service restaurants have fared best, with value menus appealing to the most cash-strapped consumers, and barbell-pricing i nitiatives and an increased focus on quality offering an opportunity for sit-dow n diners to save money by trading down with a significant sacrifice. The impact this has had on casual dining operators is evident, with 80% of casua l dining customers reporting that they are eating out less due to budgetary reas ons. Chains are scrambling to lure customers with margin-shrinking “deal menus,” tha t have created a customer base seemingly feeling entitled to discounting without the added benefit of revenue growth. The result has been segment-wide sales dec lines coupled with the casualties of bankruptcies and unit count hemorrhaging. Turning the profitability tide With the recession “officially” over, the time has come for casual dining chains to regroup and focus on how to turn the profitability tide. Distinguishing the casual dining experience: A varied, quality menu with relativ e value in a welcoming atmosphere. Achieving “portfolio profit”: Looking at ways to expand possible revenue streams, s uch as incorporation of limited-service components and mobile food trucks. Boosting traffic at off hours: Snacks, mini-meals and happy hours will help brin g in customers for more than the traditional dayparts. Special menus: Casual dining operators can stand apart by offering specialty men us for consumers with dietary restrictions such as gluten-free. The BFY menu: Government intervention and customer demand are driving the need f or greater focus on healthy menu options. This includes the kids’ menu. Social networking next steps: These tools have morphed from promotional tools in to a digital customer service representative. Results within the category not segment driven In some restaurant categories, such as fast casual, notable sales are seen by segment, but that is not the case for casual dining, d unit growth is much more individual. Indeed, within each of the gments we have seen a wide range of positive and negative results e to how companies are riding the wave of the recession. success trends where sales an three major se that speak mor
Promotions highlight menu features and special pricing The plated meals coming out of the kitchen at casual dining chains assume the st arring role in advertising and promotional efforts, with the deals being offered assuming the supporting role. Traditional television ads are being supported by the internet, email and social networking tools, and chains are quick to featur e ways that they can be distinguished from the crowd, through unique jingles or signature dishes. The (mostly) diverse and (often) varied casual dining menu A notable feature of most casual dining menus is that they are large, varied, an d ever changing; however, that is not the case across the board. The category se ems divided by those that regularly make menu modifications and run limited-time offers (LTOs), like Chili’s and Applebee’s; those that focus on special-event type menu changes (Red Lobster); and the ones that prefer to stick with their core me nu specialties (Outback and P.F. Chang’s). Entrées are the anchor of the casual dining menu, and steak is the leading item. T he menu items that have seen the greatest growth are often represented on “deal me nus,” and recessionary growth of burgers across restaurant segments is evident in
casual dining as well. The casual dining beverage menu is notable for a few select players that are fea turing craft beers and signature wines, but greater attention could be paid to i ndustry-wide trends, such as the mounting “cocktail culture.” Applebee’s and Olive Garden top consumer picks When considering lunch, 15% of casual dining customers opt for Applebee’s, and 14% go to Olive Garden. Although the roles reverse for dinner, when 15% go to Olive Garden and 14% go to Applebee’s, the difference is statistically irrelevant, as b oth brands are casual dining leaders for these dayparts. Overall usage skews decidedly to lower age brackets and middle household income groups, with 18-34s and those from households earning $75K-$99.9K generally the most avid users. There are notable exceptions, however, with chains such as Outb ack attracting an older, more affluent crowd. The average party size is 3.13, and the average check is $47.93. Opportunity exi sts to expand on set meal pricing to make it adaptable for different size groups . Cutting back and opting out The recession clearly continues to impact the segment with 31% of respondents (c asual dining customers) saying that they are spending less at casual dining chai ns this year than they were last year. Of those a full 80% say that they are doi ng so for budgetary reasons, and 33% state that they are eating out less AND opt ing for less expensive menu items. Why casual dining? A number of factors vie for the top spot in casual dining selection factors, wit h “menu items that I like” the leading driver (mentioned by 72% of casual dining cus tomers). A good dine-in experience, value for the money, and best-tasting food a re close behind, all tied in the second spot, with 66%. Women are more likely to choose where to eat based on health factors. Older patr ons are more likely to be opinionated about the range of casual dining factors, and as such are more likely to know what they like and expect it. Where casual dining excels is in the experience and the ability to order healthi er food. Among casual dining users, 83% reported saying they liked the sit-down, full-service experience at casual dining restaurants, and 67% of users believe casual dining restaurants offer healthier food than fast food restaurants. These are strong points of differentiation when competing against other low-cost segm ents. Additionally notable, 67% of casual dining users say that casual dining restaura nts offer interesting flavor combinations, and 59% say they have unique food pre parations, which are additional ways these operators are distinguishing themselv es from other segments and other chains. These responses also emphasize the need for a varied and unique menu and to offer food that patrons are less likely to have at home. Casual Dining - US - October 2010 Market Size and Forecast Moderate growth ahead after painful recession Like just about every segment operating in foodservice, casual dining has felt t he effects of the recession, though in many cases to a larger degree. While cons umers may still view casual dining restaurants as providing good value—given the c
S. Economic Census.8 3. Mintel estimates casual dining segment growth of 1. Economic Census.S.7 3. which would lead to sustained dispo sable personal income growth and greater consumer confidence. Restaurants & Insti tutions Top 400.) (fore.) (fore.October 2010 . For 2010.) (fore.S. Combined.S.9 1. Chain Industry Restaurant Review FIGURE 2: U.4 3.9 4.1 2. at current prices.6 1.2 100 108 113 117 119 1.ombination of price points.0 107. casual dining year-to-year growth through 2015 is forecast to be around 3% after adjusting for inflation.5 100 105 107 106 108 0.) (fore.3 4.6 134.) (fore.9 99.) 4.) (fore.) (fore.) (fore.4 114. sales at casual dining restaurants. Franchise Finance.5 -0. Census Bureau.) 8.) (fore.1 4. sales at casual dining restaurants. GE Capital.8 107.9% in nominal terms . Chain Industry Restaurant Review Casual Dining .7 122.US .1% after factoring for inflation.4 116.7 109.5 3.7 141. Casual dining sales and forecast FIGURE 1: U.3 111.6 130.4 128. menu quality and table-side service—consumers have bee n trading to lower-priced options in fast casual and quick-service. but they would also be more confid ent in deciding to go out to eat.6 104. Moving forward.4 118. 2005-15 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sales at current prices $ billion % annual sales change 91.3 (est.3 (est.1 3.8 126. at inflation-adjusted prices. 2005-15 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sales at inflation-adjusted prices $ billion % annual sales change 102.8 4. GE Capital. Census Bureau.9 111. This growth assumes an uptick in employment. consumer s would not only have greater spending power.5 111.) (fore.4 5. Franchise Finance.1 122.2 5. Restaurants & Insti tutions Top 400.5 109. though only 0.9 109.2 1.1 92 97 98 98 100 108 111 115 119 123 127 Index 2005 = 100 Index 2010 = 100 100 103 107 110 114 117 Adjusted for inflation using the All Items CPI SOURCE: Mintel/based on U.8 82 89 93 97 98 121 126 133 140 147 154 Index Index 2005 = 100 2010 = 100 100 104 110 115 121 127 SOURCE: Mintel/based on U.
McGrath’s Fish House Restaurants filed for Chapte r 11 bankruptcy protection in February 2010. according t o the latest Nation’s Restaurant News “Top 200” published in June 2010. As shown in the . Claim Jumper Restaurants. The Restaurant Performance Index (RPI)—a composite index of the current and expect ed state of the industry based on a survey of restaurant operators—remained at his torically low levels in Q2 2010 after improving somewhat in Q1. (parent company to Olive Garden and Red Lob ster) opened 53 net new restaurants in fiscal year 2010. which equates to a $208.5 million decline in sales over the past decade. the casual dining segment has been among the hardest hit as customer s opt out of eating out and trade down to less-expensive quick service restauran ts that are improving food quality. Lone Star Steakhouse & Saloon had estimated fiscal 2009 systemwide sales of abou t $253 million. landlords. this has likely created a breed of consum ers who will be difficult to wean off discount pricing once the economy stabiliz es. Midwest restaurant chain Max & Erma’s filed for bankruptcy protection in October 2 009.S. This has triggered aggressive price wars among casual dining chains. meaning that the chains will continue to operate as they renegotiate their obl igations with creditors. Vicorp Restaurants (which closed 56 of the 400 Village Inn and Baker’s Square rest aurants). Additionally. including: Metromedia Restaurant Group(which shed 150 company-owned Bennigan’s. such severe discounting threatens to cheapen the image of opera tors and call quality into question (see Marketing Strategy). G&R Acquisition. Within the restauran t industry. with 45 restaurants in eight states.Market Drivers Casual dining: the poster child for recessionary restaurant woes The restaurant industry has felt the impact of the recession with dining out bei ng among the first cuts made to tightened consumer budgets. Additionally. The recessionary impacts on casual dining restaurant chains are also evidenced i n declining expansion rates. Furthermore. With the exce ption of Metromedia Restaurant Group. filed for bankrup tcy reorganization in September 2010. although it has since em erged and started adding new menu items. For comparison . systemwide sales of about $523 million from 265 locations. Darden Restaurants Inc. over the past year. Uno Chicago Grill filed for bankruptcy in January 2010. owner of 106 Max & Erma’s and 53 Damon’s Grill units. 50 Steak & Al e. For example.5 million in 2008. these bankruptcies were Chapter 11 filings . down from estimated sales of $314. Bankruptcies were also filed by a number of restaurant groups with interests in the casual dining segment. and other suppliers. and 50 Ponderosa Steakhouse locations). a number of casual dining chains have filed fo r bankruptcy protection. which has u ltimately served to merely squeeze already tight margins and cause a continuatio n of poor sales results. drastically down from 7 1 restaurants opened fiscal year 2009. in fiscal 1998. the chain had U. store closings and bankruptcies. With 20 locations in six states. In September 2010. Lone Star Steakhouse & Saloon closed 19 of its underperformin g casual dining restaurants in multiple states.
—January 2010. FIGURE 3: NRA Performance Indices.000 over the mo nth to 9.S. indicating that restaurant operators are less bu llish about their long-term prospects. Driving this decline is the Expectations Index. they are l . disposable personal income growth. January 2008-August 201 0 SOURCE: U. However. Over the prior two months. January 2009-August 2010 SOURCE: National Restaurant Association Official claims that the recession is over have likely helped to aid consumer pe rception of recovery. Rewarding loyalty is a more stable option financially a nd will help to maintain a steady customer base as the economy improves. the RPI indicates Q2 declines.S.5 million. which is on par for wh ere the official unemployment rate has been throughout 2010.” and when they are uncertain about the stability of their own finances. many casual dining operators are still having to resort to de ep discounting to bring back customers who have been trading down to limited ser vice alternatives. FIGURE 5: Unemployment and underemployment rates. as well as the U.000. which has declined the sharpest in recent months. and for the employed. a sit-down meal with the add-ons of drinks and tip can be hard to justify. economy’s future. Deep discounting can incentivize. the economic uncertainties leading to job instability warrant fair reason for cutting back on meals out. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. The Bureau of Labor Statistics (B LS) reported in July 2010 that the rate had reached 9. and it seems likely the index will remain at a historically low level during the balance of Q3 and perhaps for the rest of 2010.5%. finding justification f or lunches or dinners at casual dining restaurant is difficult. FIGURE 6: U. and customers are apt to react negatively if their valuepricing options go away. The unemployment rate rose to more than 9% in May 2009 and has hovered around 1 0% throughout 2009 and the first half of 2010. the number of such workers had in creased by 943. January 2007-September 2010 SOURCE: Bureau of Labor Statistics Real disposable personal income Meals at sit-down restaurants are often viewed as “nice to haves” but not a necessit y. For the unemployed or underemployed.Figure below. yet with shrinking margins this pricing model cannot be sustai ned for the long haul. FIGURE 4: Adjusted Foodservice and Drinking Place Sales.S. Additionally.S. the number of persons employed part time for economic reasons (som etimes referred to as involuntary part-time workers) rose by 612. while sales did rise overall wi thin the industry. Census Bureau Unemployment and underemployment discourage spending out As shown in the figure below. unemployment remains at a historically high level. January 2007-August 2010 SOURCE: Bureau of Economic Analysis Consumer confidence According Mintel’s Attitudes Towards Dining Out—U. resulting in increased sales at the nation’s restaurants and drinking establishments in Q1-Q2 2010. and when disposable personal income (DPI) is limited. 58% of consumers ag reed that they dine out to “treat themselves.
For the “prix fixe” m enu.3 13. a sure contributor to the lagging p atron traffic at casual dining restaurants.0 11.705 36. younger groups will continue to be important.4 13.3 12.3 14.5 2.8 -5. in addition to being a shrinking portion of the population.301 43. informal atmosphere.301 40.100 41.4 10.8 13.6 14. This suggests that operators in the segment must work harder t o attract older diners in order to stay viable.ess apt to be able to justify that treat.282 43.550 44.3 21. 2005-15 2005 Age 000 2005-15 <5 5-14 15-24 25-34 35-44 45-54 55-64 20. Casual dining restaurants.7 . the importance of hea lthy menu options becomes increasingly important.277 44.334 2010 % share 6.544 6.5 13. Include Boomers in email and even social networking targeting. as th ey cook less and are coming from households where cooking was not the norm due t o hectic family lifestyles. FIGURE 7: University of Michigan Consumer Sentiment Index. and will associate such outreach efforts with gettin g the family together for a meal out.817 43. consider two soups or salads and one shared entrée.2 33.7 13.6 in September.3 14.275 000 6. including online ord ering and social networking tools. where the most avid co nsumers are 18-34.9 13.365 43.714 42.5 4.7 7.549 41.0 13. Menus should tout such feature s as low-sodium content and high levels of omega-3 fatty acids. The University of Michigan’s Consumer Se ntiment Index has been turbulent since 2007.499 41. would point to a general uncertainty and negativity about the economy and individuals’ feelings about their own finance s. These customers will be relying heavily on LT O meal deals and will also be drawn in by deals that are aimed at feeding larger groups in a social.2 13. is not optional if your intended target is of the Millennial Generation.7 12. As consumers age and health conditions are more prevalent. face a declining hardcore fan base as the numbers in this age bracket decline.8 14. As such. FIGURE 8: Population by age. Unfortunately.818 41.367 40. contributing to the weakness at that daypart. Despite an aging population. March 2007.076 43. Considering offering smaller porti on sizes or larger meals that are easily shared by two people. this group of younger consumers will contin ue to look to restaurants to provide meals with the added bonus of being a venue for socialization.5 14. including as a way to keep up with what ki ds and grandkids are doing. instead of featuring one shared appetizer and two entrées.September 2010 SOURCE: University of Michigan/Reuters Demographics Americans over the age of 55 represent a large growing segment of the population and also tend to be the lightest user of restaurants at dinner. The continued downward march of cons umer sentiment. young er generations are also feeling the economic pinch of the recession and are amon g the hardest hit by unemployment.8 13.7 2015 % share 22.4 11.5 % change 000 % share 8.432 30. Many have embrace d these tools for work and interests.329 41. hitting 66.882 39. Some key factors to execute this initiative follow: Older patrons tend to have smaller appetites. Using technology.
tableside food delivery. with QSRs ramping up menus.49 for Chicken). McDonald’s extensively test-marketed an Angus Burger before launching it c hain-wide. McDonald’s has also been imp lementing a barbell-pricing strategy.99 (medium combo w/side a nd beverage) and $7. $6.0 100. just more than half of responden . $6.766 6.1 18. Fast casual restaurants have also been benefiting from consumers trading down in the economy. and expan ded prepared-food offerings by specialty grocers. often start meal options at $9. and bus service. and then extended the Snack Wrap line to include a higher-priced Angu s Snack Wrap ($1.October 2010 Competitive Context Casual dining customers trading down Despite aggressive pricing strategies and accompanying promotions. placing it at a competitive price point for recently seen casual dining deals. and most recently in August 2010.0 44.539 100. As shown in the following figure. Census Bureau.967 8.1 295.1 100.7 9. Former Boston Market CEO Lane Ca rdwell called it “casual dining food at fast-casual prices. Ultimately.S.65-74 75+ Total 10.112 6. For example.3 19. in the eyes of the casual dining customer.0 310. Burger King has also introduced the Whopper Bar. including “value menus” that attract budget-conscious diners. Chili’s and Applebee’s. upgrading stores to feature real plates and silver ware.49 (small combo w/side and beverage). a fast casual reimagining of it s basic concept. and New York City domestically. and some chains have dropped prices as lo w as $5.99 for the Angus Snack Wrap versus $1. in May 2010 Boston Market instituted a 10-stor e test at outlets in Florida.0 Data may not equal totals due to rounding SOURCE: Mintel/U.49. Burger King. with more upscale offerings offsetting the value-priced menu optio ns. The Fire-Grilled Ribs meal was priced in the $7-9 range for a combo meal.9 18.99. interim population projections released 2008 (population in 2010 and 2015) and annual July 1 population estimates (population in 2005) Casual Dining . Miami.39 (large combo w/side and beverage). McDonald’s reported th at sales at stores open at least 13 months rose 4. Many of the segment’s players have been hampered by the recession.3 18.99 for special promotions on burgers. QSR Magazine (September 2010) reported on how QSRs—fast casual in particular—are pos itioning themselves to attract casual dining patrons who are trading down due to economic pressures.870 6.561 21.7 325. The Smoky Cheddar Steakhouse XT Burger is priced at $4. the time. for example. In addition to now selling premium coffee drinks. and money one spends there are making al l of these lower-priced choices a more attractive dining option.640 6.6%.” QSRs have also been attracting a wider range of customers through barbell-pricin g strategies. tip. for examp le. has done an expansion and promotion of $1 menu ite ms in conjunction with higher-priced offerings such as the XT Steakburger line a nd an LTO of Fire-Grilled Ribs. the Miami location serves beer and wine with its specialty bu rgers. McDonald’s has been one of the few restaurant chains to consistently realize sales growth in the recession. the casual di ning segment has suffered from consumers trading down and eating out less. While the concept is operating in Orlando.US . the rise of fa st casual chains with sit-down restaurant-style foods at lower prices.235 26.463 6.
indicating that this is a long-term strategy. Waffle House’s Dollar$ Menu is served all day and includes seven affordably priced breakfast items. $6 and $8. The chain has since revamped the value menu with new options. Lunch is the largest daypart for fast casual. fresh spinach. Additionally. such as the following: Au Bon Pain: Mozzarella Chicken on Rosemary Focaccia with all-natural chicken. Though the chain is known for full service. Entrées may be ordered separately for $5 less than the cost of the meal. Denny’s initiated a national rollout of a 16-item value menu featu ring foods at $2. several of the fastest-growing fast casual concepts are better-burger concepts.ts to the exclusive survey done for Mintel’s Fast Casual Restaurants—U. as we ll as using online ordering and curbside pick-up features to attract those seeki ng on-the-go convenience. FIGURE 9: Attitudes toward fast casual compared to casual dining. and chains in the segme nt are offering menus with upscale offerings. Così: Così Club with roasted turkey tenders. This suggests that casual dining chains need to work harder on convincing custom ers that they can provide healthier. August 20 10 believe that a fast casual meal is a better value than a casual dining meal. balsamic onions. Dollar$ Menu items are also available to go. romaine lettuce. such as Smashburger and Five Guys Burgers and Fries. high-quality. provolone and sun-dried tom ato pesto mayo. tomato and artichoke aïoli. 32% agree that fast casual is more healthful. April 2010 All Base: internet month 756 % 18-24 25-34 35-44 users aged 18+ who have 117 194 158 % % % 45-54 55-64 65+ used a fast casual restaurant in the past 108 94 85 % % % Fast casual restaurants are a better value than casual dining restaurants 51 57 56 59 43 41 39 Fast casual restaurant food is healthier than food from casual dining restaurant s 32 39 43 38 21 19 16 Fast casual restaurant food is of higher quality than food from casual dining re staurants 29 33 41 32 23 16 16 SOURCE: Mintel The ability to more effectively compete with fast casual restaurants is of parti cular importance for casual dining chains that are working to increase lunchtime business. In spring 2010. $4. with many casual dining chains working to develop more app ealing burger platforms.S. and 29% agree that f ast casual quality is higher quality. tomato and shredded romaine with low-fat mayonnaise. by age and gen der. while the remainder are targeted toward lunch and dinner. and Corner Bakery: Turkey Frisco on Asiago Cheese Bread with smoked turkey breast. offering menu choices with QSR pricing.. Six of the items are breakfast-centered. bacon.” a line of 10 family-sized takeout mea ls priced less than $20 each that contain three to four servings and come with b read and a choice of side dish. f resh mozzarella. Additionally notable. Family dining chains are also competing on price. . m arinated artichokes. Bob Evans has introduced “Family Meals to Go. price-competitive food.
which dropped 32 units . respectively. or 3. . Friday’s had growth of 16. Chili’s was a ble to realize sales growth of 17. these concepts have likely been affected by not having the large marketing and advertising budgets of the largest companies.6%).5 4291 3264 2620 1622 1448 391 1260 -4. between 2007 and 2009. When considering unit growth.3%.4 147 8. all of the leading Contemporary American and Seafo od chains had growth.1%). For operators in this segment.G. The largest sales loss was for Ruby Tuesday (-13.485 units. a smaller overall footprint. California Pizza Kitchen. while Red Lobster and Bonefish sales were flat at 0.3 % change in sales 2007-09 1485 1976 906 680 933 -2.1 1411 0. incr easing 17. FIGURE 10: Systemwide restaurant sales of leading contemporary American and seaf ood casual dining chains.7 0. Sales also increased for P.5 -3.2 1.October 2010 Segment Performances Contemporary American and Seafood Segments Unit growth unbalanced against fixed sales results The two chains that have been most aggressive in attempts to use “deal menus” to dri ve traffic are also the leading chains in the Contemporary American and Seafood segment and have seen markedly different results.8 16. Chang’s. the ones with sales losses also h ad a decline in units. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Chili’s 3790 4455 Applebee’s 4507 T. On the Border and Chevy’s Fresh Mex all posted significant sales declines. second. relative lack of recognition. and The Cheesecake Factory also had a sales decline (-2. Chili’s had the most significant expansion.9% to 1.6 140 17.Casual Dining .9 2008 989 690 901 139 152 # 2007 Units # 2007-09 1.I. While still large. while sales for Applebee’s declined 4. with the exception of Ruby Tuesday. en abling Chili’s to assume the role of sales leader for the segment. Additionally. and ability to offer the same deep discounting as first-tier competitors hurts these chains in a toug h market.6 5. resulting in a 17.I.net Italian and Ethnic Segment Olive Garden: the segment powerhouse Olive Garden is by far the dominant player in the Italian and Ethnic segment wit h both sales and unit gains seen in 2009 over 2007.6 9.8% and 0. The company’s formula for targ eting “friends and family” seems to have held strong in the recession. This indicates that average annual sales at restaur ants have fallen as consumers cut back from casual dining. From 2007 to 2009.7%. Carrabba’s.5% increase in total units.9% gain in sales and 12.and third-tier brands all had sales and unit losses . and Benihana.8%. how ever Romano’s.G. Apart from Benihana. Sales were likewise varied for the remainder of the leading chains in the segmen t.8 -13.4%.8 SOURCE: Company releases/Restaurants & Institutions/Restaurantchains.F. T. Friday’s 2797 Red Lobster 2600 Ruby Tuesday 1866 Cheesecake Factory Bonefish 390 17.5%.US .
5 2007-09 SOURCE: Company releases/Restaurants & Institutions/Restaurantchains. both in the recession and moving forward.9 9.2 225 % change in sales 2007-09 614 172 253 233 238 166 79 -17.1 -9. What emerges in the Steakhouse segment is that everyday options have fared bette r than the “special occasion”-type experience.net Casual Dining .net Steakhouse Segment Outback leads segment. Chili s.3 90 2007 Units # 2007-09 -7. At the end of fiscal year 2010.5 -4.F. both were able to grow both sales and units over t he two years.FIGURE 11: Systemwide restaurant sales of leading Italian and ethnic casual dini ng chains.078 LongHorn Steakhouse 3. The other two leading steakhouse chains in the casual dining market.384 12. which also owns the Maggiano’s Little Italy chain.6 20. as the dominant player in the Steakhouse segment.3%.1 -3.8 222 233 160 95 97 # 12. for sales declines Outback.US . Thirteen franchise stores opened in fiscal 2010 with a projected addit ional 10-13 scheduled to open in fiscal 2011. had the most signific ant sales declines in 2009 over 2007 of all the leading chains featured in this report—23%.7 -2. Texas Roadh ouse and LongHorn Steakhouse. and market. Inc.2 SOURCE: Company releases/Restaurants & Institutions/Restaurantchains. FIGURE 12: Systemwide restaurant sales of leading steakhouse casual dining chain s. The company also shed t hree units over the period. The brand is often associated with tipping the price scale for the seg ment. Brinker operated and franchised a total of 1. . The smaller brands have more room to grow and have done a better job appealing to the family demographic.0 285 7. or 0.October 2010 Company Profile: Chili’s Founded in 1975 and based in Dallas.3 11.505 Chili s.8 -17.3 688 636 384 304 273 17. Chang’s 849 CPK 723 805 Romano’s 765 Carrabba’s 705 On the Border 464 Benihana 271 Chevy’s Fresh Mex 3290 925 11.0 237 -10. which has p roven essential.3 888 % change in sales 2007-09 -23. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Outback Steakhouse Texas Roadhouse 1.5 14.1 321 2007 Units # -0.098 1. operates as a subsidiary of B rinker Restaurant Corporation.211 828 2. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Olive Garden 2790 P.6 691 197 6. which has not encouraged traffic in the recession.2 973 331 288 # 970 16.2 12.
with various iterations of the $20 Dinner for T wo being leveraged. Initially. higher-income householders overall are more apt to visit a Chili’s. the annual report states: “Discounting has been prevalent during the year. such as craft beer and cockta ils. FIGURE 14: Chili’s top demographics. 2010 has not been as kind.9 # 2007 Units # 2007-09 SOURCE: Company releases Core Customers Chili’s top demographics are those aged 25-34. February 2009-March 2010 Base: 17. and the clientele in this bracket i s developing a slightly more sophisticated palate and will likely respond well t o more unique food offerings and trendy beverages. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Chili’s 3790 4455 17. However. however. HH Income $75K+ 23 White. the compa ny had hoped to get away from value pricing. which suggests that barbell pricing to offset the “deal menu” could appeal. Chili’s customers are dominantly white.Company performance Chili’s had significant growth between 2007 and 2009 with change in sales and chan ge in units nearly a mirror image. Indeed. Like many operators in casual dining. Chili’s has relied heavily on “deal menus” to d aw in recession-weary customers.549 adults 18+ who eat at family restaurants/steakhouses it Chili’s % All 18 Ever Vis 25-34 24 HH Income: $100K+ 23 HH Income: $100K-$149. Our belief is that our continued focus on quality and innovation will result in stronger brand s and sustainable sales and profit growth through increased guest loyalty and tr affic. Doug Brooks.9K HH Income: $150K+ 23 College Graduate 25 White. according to the company’s CEO. A version last year included dessert. and samestore sales dropped 9. although blacks and Hispanics from househo lds earning $75K plus are standouts. 18-34 24 Non-Hispanic.4% year-over-year for the fiscal Q4 reporting period (ende d June 30. Our long-term strategy is to balance value and innovation. we believe that this is only one option to drive sales and tr affic.5 1260 % change in sales 2007-09 1486 17.” FIGURE 13: Chili’s systemwide sales and units. 18-34 24 Male. especially as the effects of the recession begin to fade. However. 2010). HH Income $75K+ 23 23 . in 2010. however the most recen t version of this discount does away with dessert. Using menu descriptions and ingredient call-outs to entice patrons to upgrade t o something that they are not likely to get at home could help increase check av erages.
top five cuisine types.0 67. The chain has been focusing on the burger menu as of late for the appeal to the cost-conscious consumer. Chili’s completed the rollout of a brand-new.08 SOURCE: Menu Insights Chili’s traditional American menu has gained a greater foothold in the past year.8 5. The menu still boasts 99 items.7 21. FIGURE 16: Chili’s.504 restaurants all began to serve items.0 2.76 4. with entrées naturally appearing at the top of the list. Extending the “deal menu” to include a children’s version would certainly be a draw for parents.9 1.8 2. new additions are plentiful and demonst rate the chain’s eagerness to keep customers “on their toes” and able to try a plentif ul variety with each visit.2 Traditional American Southwestern/Tex-Mex BBQ 3. which reduced the menu fro m 12 to eight pages. and cocktails with premium spirits.66 5. as well as other ethnic-type menu items.7 5.94 7.SOURCE: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult Full Year—POP On the menu In early 2010. Q4 2009-Q3 2010 Cuisine type Q4 2009 Share of menu items % North America North America North America Mediterranean North America – – – Q1 2010 % % 60.32 5.7 8. All des . The following are the latest new menu items.9 Cajun 4.08 3.1 2.76 13. pulled-pork sandwiches.09 8.1 3.2 Q3 2010 58.9 Italian 4.8 7.9 1.2 26.6 10.08 6.0 2.2 20 13 11 10.18 14.4 12.8 100 45. who could the n potentially afford to upgrade their own meal options.4 5. Q3 2010 Restaurant menu information Number of Items % of menu % of res taurant segment Average price Average price in restaurant segment All day menu $ $ Entrée 27 Sandwiches Appetizer Child/Kids Sides 11 Salad 9 Dessert 6 Soups 6 Total 103 26.26 3.7 8.25 3. Chili’s menu is competitively priced against the segment .2 27. as the chain seems to be drawing back on the namesake Tex-Mex offerings.1 19. For the most part.94 5.24 8.7 2.9 5.2 5.47 8.66 8.3 27. The cha in’s 1. FIGURE 15: Makeup of Chili’s menu.5 3.2 13.0 Q2 2010 % 60. although the kids’ menu is significantly above average. M ore than 75% of menu items were revamped or replaced.75 8.1 3. such as street tacos made with mi ni-corn tortillas.9 12. smaller menu.9 SOURCE: Mintel Menu Insights New menu additions Although Chili’s has streamlined its menu. and this likely accou nts for a reasonable percentage of that shift.
49 BBQ Pulled Pork—With caramelized onions.criptions are provided by the company. $8. mayo. With choice of grilled chicken or grilled shrimp.79 (Small). $8. aged Swiss cheese. cilantro. However. Although sales have continued to decline.39 Shiner Bock BBQ Burger—Topped with sweet ’n tangy Shiner Bock BBQ sauce. $8. dried cherries. $7.99 Buffalo Chicken Ranch—Crispy chicken with spicy wing sauce and ranch dressing on a sesame seed or wheat bun. $10.89 Mushroom-Swiss Burger—With sautéed mushrooms. brand. mandarin oranges. then topped with crispy on ion strings and bleu cheese dressing. Salad Asian Salad—Lettuce with Napa cabbage.99 Chicken Crispy Chicken Crispers—Extra-crispy chicken with corn on the cob. Santa Fe Chicken Wrap—With fire-roasted corn. sesame seeds. results are less pronounced. arugula and horseradish cream on warm flatbread. along with IHOP. c ilantro. $10. tomatoes.6% in 2010 over 2009. Topped with cheddar cheese and cilantro sour cream.29 (Large) Grilled BBQ Chicken Salad—With Applewood smoked bacon. Company performance Despite an increase in units in 2009 over 2007. Applebee’s saw sales decline for t he same period (-4. Served with rice and black b eans. green onions. Asian vinaigrette and a creamy peanut drizzle. $7. $8. sesame seeds and honey-lime dressing.99. salmon or steak.000 employees company-wide. house-made ranch and a drizzle of BBQ sauce. cara melized onions. marinated portobello mushroom can be substituted upon request. with provolone. green onions. tomato and pickle. Served with ancho-chile ranch.79 Caribbean Salad—Fresh pineapple. red onions and cucumbers. a somewhat typical representation of the state of the ca sual dining market over the course of the recession. 15 other countries and one U.89 Tacos Wrapped in Flavor Seasoned Ground Beef Tacos—With caramelized onions and carne asada spices. homestyle fries and choice of black pepper gravy. BBQ sauce.US . $8. honey-mustard or ranch dressing.October 2010 Company Profile: Applebee’s Founded three decades ago. ched dar. With choice o f grilled chicken. crispy wontons.S. $9. edamame. cila ntro.89 Steakhouse Sandwich—Seasoned sliced sirloin. Currently. Applebee’s is now a DineEquity. cheddar and crispy onion strings. $7. territory. Add house-made guacamole for $0. The Applebee s s ystem has approximately 28.89 Sandwiches All sandwiches are served with homestyle fries but grilled. Inc. with a ye ar-over-year decline of 1. Served with Shiner Bock BBQ sauce. cheddar. gouda and spicy coleslaw on a sesame seed or wheat bun.000 Applebee s restaurants operating syst emwide in 49 states. there are more than 2. $3. $7. Served wit h choice of dressing. $7. this was not sufficient .29 (Large) House Salad—With fire-roasted corn. avocado an d tomatoes. $ 9.99 (Small).99 Casual Dining . sautéed mushrooms. shredded lett uce. tortilla strips. corn relish.8%).69 Better Than Ever Big Mouth Burgers Ground Peppercorn—Crusted with black pepper and spices.
those aged 18-24. with instead more attention paid to sandwiches. as well as the internet and social networking tools .3 45.45 13. despite the latter’s efforts to tri down its offerings. Applebee’s menu is smaller than Chili’s. FIGURE 19: Makeup of Applebee’s menu. The chain does particularly well with younger consumers. Addit ionally. FIGURE 18: Applebee’s top demographics February 2009-March 2010 Base: 17.291 -4. HH Income $75K+ 44 SOURCE: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult Full Year—POP On the menu Overall.8 % change in sales 2007-09 1. 18-34 45 Black.507 4. Prices are in line with the segment. HH Income less than $75K 44 Black. 35+ 44 Non-Hispanic. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Applebee’s 4. with 39% using. compared to the average.1 12. 18-34 44 Black. Q3 2010 Restaurant menu information Number of items % of menu % of res taurant segment Average price Average price in restaurant segment All day menu $ $ Entrée 35 39. Applebee’s has relied heavily on the “deal menu” to attract customers ( are trading down for financial reasons) and has strongly promoted the two for $ 20 menu through advertising.976 2. FIGURE 17: Applebee’s systemwide sales and units. instead pa ssing that crown to Chili’s. with desserts and sides more competitively priced.549 adults 18+ who eat at family restaurants/steakhouses it Applebee’s % All 39 Ever Vis 18-24 46 Black 44 Northeast 44 Midwest 46 Black.for Applebee’s to retain the spot as the sales leader for the segment. Like Chili’s. regard less of income or age.008 # 1.6 2007 Units # 2007-09 SOURCE: Company releases Core Customers Applebee’s is a leader among Experian Simmons respondents for use of a casual dini ng chain.47 . Applebee’s has higher usage among blacks. There is less focus on entrées for Applebee’s than the segment norm.
$9.4 4.5 4.18 8. cheese. $8. All descriptions are provided by the company: Salads Santa Fe Chicken Salad—Grilled marinated chicken breast atop a bed of greens. Italian. $7.1 9. hardboiled eggs and tomatoes all on Bibb lettuce.26 SOURCE: Mintel Menu Insights Traditional American fare is most evident on the Applebee’s menu.99 (Whole Portion) Sandwiches Spicy Shrimp Rollup—Golden fried panko shrimp are glazed with sweet and spicy sauc e and rolled in a flour tortilla with Asian slaw. Served with honey mustard dressing.72 9. crispy bacon.7 6. This comes despite the two latest additions to the two for $20 menu being pasta dishes.8 - 14.6 Q2 2010 % 61.9 14. tomatoes and e ggs rest on fresh salad greens.7 8.6 14. Provolone-Stuffed Meatballs—With fettuccine.9 5. Jack and cheddar cheese.9 9.66 5.99 (Half Portion).49 2 For $20 Queso Blanco—With tortilla chips.99 (Half Portion).99 Slow Simmered Beef Sandwich—Beef that has been slow simmered for hours and piled h igh on a buttery bun from Applebee’s collection of bakery breads. crispy wonton strips and fresh chopped cilantro.7 100 23.2 13.5 5.32 3.4 SOURCE: Mintel Menu Insights New menu additions As is evidenced throughout the casual dining segment.99 Battered Fish Sandwich—Hand-battered fish fillet.5 Q3 2010 62. Tossed with a creamy avoc ado dressing for a great finish. $7.4 12. .76 3. FIGURE 20: Applebee’s top five cuisine types.00 8. golden fried and placed on a toa sted bakery bun with tartar sauce and lettuce.0 12. with homemade pico de gallo and Mexiranch dressing.4 North America: BBQ 4. guacamole and sour cream.6 North America: Traditional American Mediterranean: Italian 14. avocado.99 (Whole Portion) California Shrimp Salad—Succulent grilled shrimp. Layered with jal apeño coleslaw.99 (Whole Portion) Fried Chicken Salad—Juicy breaded chicken. $7. black oli ves.4 4.0 14. a steady flurry of new men u introductions at Applebee’s serves as an attempt to keep patrons engaged. falling out of favor.1 4. $7. $9.49 8. and has risen in prominence with the second-leading cuisine type.82 2.Sandwiches Appetizer Salad 8 Dessert 6 Sides 6 Total 89 21 13 9. Crunchy tortilla strips.0 6. $10.99 (Half Portion).2 North America: Southwestern/Tex-Mex Asian: Pan-Asian 4.1 4. $8.24 - 8.6 7.8 9.32 8.5 64 13. crispy onion strings and Sweet Heat signature sauce. Q3 2009-Q2 2010 Cuisine type Q4 2009 Share of menu items % Q1 2010 % % 59. The la test menu additions through Menu Insights follow.
With a general perception of Outback being on the more expensive end of the casual eatery spectrum. Europe. Company performance Outback has experienced one of the most significant declines for the 2007-2009 r eporting period with sales down 23%.US . With fries and cole slaw. or sub onion rings for $0. red peppers. sugar snap peas. served on a toasted hoagie roll. FIGURE 21: Outback systemwide sales and units. Fla.5% increase in sales in 2010 over 2009. Signature Steaks 12-oz. Outback has rallied and d elivered a 3. $9. sweet and spicy sauce. water chestnuts.Florentine Ravioli—With chicken. southern BB Q sauce. sirloin with sautéed onions. The chain is now owned and operated by OSI Restaurant Partners. and sandwiches (except Italian Chicken and Portobello) inc lude fries.29. mushrooms. topped with rich Italian cheeses.59 Sizzling Entrées Sizzling Asian Shrimp—Sizzling. $8. Crowned with fresh sautéed onions. Despite the significant declines during the recession. topped with a rich cheese sauce and aged white cheddar cheese. carrots and bo k choy. Outback has shied away from offering ongoing discounted menus and instead ran ho liday promotions for Mother’s Day and Father’s Day and improved LTOs. Riblet Basket—A hearty portion of Riblets basted with honey BBQ sauce. $12.October 2010 Company Profile: Outback Steakhouse Outback Steakhouse. Bonefish Grill. The sweet heat makes this a one-of-a-kind culinary creation $8.99 Sizzling Steak and Cheese—Applebee’s classic 9-oz. $16. was founded in February 1988 i n Tampa. LL C. Roy s Restaurant a nd Fleming s Prime Steakhouse & Wine Bar in its restaurant portfolio.99 Casual Dining . Asia. pepper and mushro oms. which include a sirloin-lobster meal and a $13. br occoli.49 Ribs and Fajitas DoubleGlazed Baby Back Ribs—A full rack seasoned and slow cooked to flavorful and tender perfection with choice of honey BBQ.99 Sizzling Chicken with Spicy Queso Blanco—A grilled 7-oz. which also lists Carrabba s Italian Grill. blackened shrimp top this skillet full of rice. Southern BBQ or sweet and spicy sauc e. 2007 and 2009 . New York Strip—Known for its high quality and tremendous flavor. mushr oms and red and green peppers. with more than 900 locations in 21 countries throughout Nort h and South America. chicken breast is served over sautéed onions and red and green peppers. Add chili and cheese for $2. $16. Smothered in spicy queso blanco. Served with gar lic mashed potatoes.95 steak-and-crab special. ci lantro and served with a side of fried red potatoes.99 Burgers All burgers. the New Yo rk Strip is a juicy USDA Select cut. sliders. $8. and Australia. Drizzled with a sweet and spicy sauce and topped with crispy wonton stri ps and cilantro. tangy chipotle mayo and something few have the joy of experie ncing outside of cactus country: candied jalapeno peppers.99 Philly Burger—Straight from the City of Brotherly Love comes this twist on the cla ssic that made Philly famous.59 Southwest Jalapeno Burger—Kick things up a notch with a masterful combination of h abañero jack cheese. customers have likely t raded down within the segment.
apart from entrées and salads.26 8.76 8.8 13. likely better able to absorb the higher price-point meals associated with the chain. Despite an image of bein g a higher-priced option in the segment. HH Income $75K+ 24 Non-Hispanic. HH Income $75K+ 23 Black.3 # 2007 Units # 2007-09 SOURCE: Company releases Core Customers The primary clientele for Outback Steakhouse is 45-54.75 - 8.17 5.9 15.71 3.95 9. In the same vein.9 4.1 100 45.47 3.549 adults 18+ who eat at family restaurants/steakhouses it Outback % All 18 Ever Vis 45-54 21 HH Income: $100K+ 22 HH Income: $100K-$149. older than the segment av erage. However.54 14.99 13. FIGURE 23: Makeup of Outback MENU.8 5.66 4.97 8.2 5 4.2007 sales 2009 sales 2009 Units % change in units $ million $ million Outback 3098 2384 -23 973 % change in sales 2007-09 970 -0. HH Income $75K+ 21 22 22 SOURCE: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult Full Year—POP On the menu Outback’s menu features a greater percentage of sides and desserts than the casual dining segment average and fewer entrées and sandwiches.7 7.95 3.6 3.9K HH Income: $150K+ 23 Females. based on Outback’s sales. HH Income $75K+ White.9 2.32 .7 7.71 13.5 9 9.2 11.1 8. Q3 2010 Restaurant menu information Number of items % of menu % of res taurant segment Average price Average price in restaurant segment All day menu $ $ Entrée 26 Sides 14 Appetizer Dessert 6 Sandwiches Salad 3 Soups 2 Total 65 40. respondents from higher-earning households are als o more likely to visit the chain. menu costs are comparable. FIGURE 22: Outback Steakhouse top demographics February 2009-March 2010 Base: 17.0 21. it would appe ar that the more affluent are actually cutting back during the recession.24 7.
9% in 2009 over 20 07.2 Asian: Japanese 1. driven by revenue from 32 net new rest aurants and its U.US .6% decline over 2009.2 1. Q4 2009-Q3 2010 Cuisine type Q4 2009 Share of menu items % Q1 2010 % % 90.2 3.SOURCE: Mintel Menu Insights Outback is one chain that has limited new additions to the standard menu. In 2010. restaurant expens . Seasons 52.6 90.6 1. However. Company performance Olive Garden’s sales gains and unit growth were identical at 17.. and LongHorn Steakhouse.6 1. as evidenced by an 87. FIGURE 24: Outback Steakhouse. Sutter Home white zinfandel.7 North America: Traditional American Mediterranean: Italian 3. top five cuisine types. which also operates Red Lobster.6 1.S.2 North America: BBQ 3.6 North America . The co mpany states that its purpose is “Hospitaliano!—providing 100% guest delight through the genuine Italian dining experience.Southwestern/Tex-Mex SOURCE: Mintel Menu Insights 1. same-restaurant sales increase of 2. sales declined.3 4.7%. For the quarter.7% share of the menu made up by traditional American fare.6 4.5 New menu additions Outback’s “steady as she goes” approach results in few new menu additions. Inc. According to company financial reports.3 3.3 Q3 2010 87. on a percentage of sales basis. pineapple jui ce and garnished with fresh sliced strawberries Fresh Fruit Cocktail— Smirnoff Vodka and a combination of five fruit flavors with bite-sized apple slices.5 1. on the beverage menu.6 Q2 2010 % 90. lower restaurant labor expenses.2 3. in Q1 fiscal 2011 first-quarter sales of $877 million were 6. with the company seemingly well-suited to weather the storm of the recession . Descriptions of some of these items are provided by the company: Signature Cocktails Strawberry Peach Sangria— The sweet goodness of fresh puréed strawberries and peache s is mixed with Malibu pineapple rum. more than one third were from new beverages. and st icks with its core competencies. Olive Garden is owned by Darden Restaurants. the company has been quite active. Of the 32 new menu items in Q3 2010. fresh cut pineapple and a cherry on top Import Beers Heineken Light Premium Spirits Finlandia Wild Berries Cruzan Black Cherry Firefly Sweat Tea Casual Dining .8% above prior year.” At the end of fiscal 2009 there were 1. and the brand experienced a 0. Bahama Breeze.48 5 Olive Garden units.2 3.October 2010 Company Profile: Olive Garden Based in Orlando.6 1.
4 7.89 6. which portray the restaurant as the i deal gathering place for family and friends.9 2007 Units # 2007-09 SOURCE: Company releases Core Customers Olive Garden customers skew decidedly female. Overall. The net result was an increase in returns and absolute operating profit for the quarter. the pricing is competitive against the segment.0 6.84 5.95 11.8 5. FIGURE 26: Olive Garden top demographics February 2009-March 2010 Base: 17. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Olive Garden 2.2 17.16 7. FIGURE 25: Olive Garden sales and units. HH Income $75K+ White.0 100 44.9 % change in sales 2007-09 1. general and administrative expenses. HH Income $75K+ 33 Hispanic.80 .7 4. 35-54 33 White. Desserts are also a prominent menu feature.85 4.es and depreciation expenses were partially offset by increased food and beverag e expenses and selling.35 16.0 14. Q3 2010 Restaurant menu information Number of items % of menu % of res taurant segment Average price Average price in restaurant segment Dinner Menu $ $ Entrée 41 Appetizer Dessert 8 Salad 2 Soups 4 Total 67 61.485 # 17. at the expense of salads and sides.82 7. 18-34 34 Females. well ahead of the segment overall.290 17. HH Income $75K+ 36 34 SOURCE: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult Full Year—POP On the menu Entrées take up a significant share of the menu at Olive Garden. 18-34 35 Females.46 15. a likely cause and effect of the m arketing tactics the company has employed.260 1.9 3.2 12 11.24 9.790 3.549 adults 18+ who eat at family restaurants/steakhouses it Olive Garden % All 28 Ever Vis 25-34 34 College Graduate 33 Moms 34 Females.20 8.9 4. FIGURE 27: Makeup of Olive Garden dinner menu.
FIGURE 28: Olive Garden Steakhouse.95 Pesce Seafood Brodetto—Scallops.Traditional American Mediterranean . baked golden brown.1 2. Topped with mozzarella and seasoned breadcrumbs.75 Passion for Italian Cuisine Available for a limited time Five Cheese Crespelle with Chicken—Features oven-baked Italian crepes filled with five Italian cheeses.4 24. yet rem ains dominated by traditional American fare. Asiago.2 Q2 2010 % 62. garlic and a zest y marinara sauce.4 Mexican 5. The latest menu addit ions follow.Irish 2. $16.4 5. $16. this despite a menu heavy on pasta dishes and those made with ingredients that are traditional to Italian cooking.9 2.75 Capellini di Mare—Shrimp. shrimp and delicate tilapia with spinach and mushrooms simmered in a light white wine and marinara-saffron broth.6 5. p armesan and Romano cheeses.9 2. Parmesan-Polenta Crusted Chicken—Sautéed chicken breasts topped with a toasted parme san and polenta crust. Carne (Beef and Pork) Parmesan Crusted Bistecca—Grilled 8-oz. served with stuffed ravioli filled with four Italian che eses tossed in a parmesan cream sauce. $9. top five cuisine types.2 2.0 Q3 2010 62. clams and mussels sautéed in white wine. Served with toasted c iabatta bread. mozzarella.2 23.95 Parmesan-Polenta Crusted Entrées Limited Time Only Parmesan-Polenta Crusted Steak—Grilled steak medallions topped with a toasted parm esan and polenta crust. topped with sautéed shrimp in a three-cheese and sun-dried tomato sauce. Q4 2009-Q3 2010 Cuisine type Q4 2009 Share of menu items % Q1 2010 % % 62. Pasta Ripiena Lasagna Rollata Al Forno—Lasagna rolls stuffed with ricotta.2 2. crab and smoked mozzarella-filled ravioli.1 1.Italian 24.0 North America . $16. Served over capellini and topped with fresh basil.2 62. All descriptions are provided by the company. Served with garlic parmesan mashed potatoes and asparagus drizzled with balsamic glaze.4 European 1. bak ed in five-cheese marinara. center cut sirloin topped with parmesan-he rb breading. and topped with herb-marinated chicken and mushrooms sautéed .2 European .SOURCE: Menu Insights Italian cuisine takes a higher ranking at Olive Garden than most chains.75 Shrimp and Crab Tortelli—Shrimp.6 5.2 23.2 SOURCE: Mintel Menu Insights New menu additions Olive Garden is another chain that seeks to engage customers through menu evolut ions and continually feature new dishes to entice patrons. $16. served with stuffed ravioli filled with four Italian chee ses tossed in a parmesan cream sauce.
5 2007 Units # 2007-09 . Company performance For the reporting period of 2009 over 2007 Red Lobster sales were flat relative to the other players in the market at 0. Served warm with vanilla ice c ream. Sales dipped slightly in 2010.US . rich vanilla cream and caramelized almond bisco tti crumble baked atop a shortbread cookie crust. $6.65 (Large) Signature House Wines Signature House Wines—Enjoy one of our three Principato wines handcrafted and impo rted from Italy exclusively for Olive Garden. Birra – Domestic Blue Moon Draft Casual Dining . Lobsterfest and Crabfest. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units $ million $ million Red Lobster 2600 2620 0.S. with a 0. FIGURE 29: Red Lobster sales and units. general and administrative expenses and depreciation expenses. mousse. Absolute operating profit and returns increased for the quarter. Red Lobster has reported that fiscal Q1 2011 sales of $600 million were 0. first opened in 1968 and has expanded to 690 Red Lobster locations in the U. The brand prides itself on “quality and freshness.25 Dolcini—Piccoli Dolci “little dessert treats”.” the latter being an especially important message for a seafood restaurant. $2. pastry crea s. Rosso (Red).8%.95 Dolce Triple Chocolate Strata—Classic Italian chocolate torta layered with creamy mousse and topped with dark chocolate ganache. Bianco (White).95 Five Cheese Crespelle with Sausage— Features oven-baked Italian crepes filled with five Italian cheeses. same-restaurant sales decrease of 1. $10. $6. giving regular customers an event to look forward to.75/glass $29/magnum bottle (serves 8 glasses) Sartori Pinot Grigio—A crisp. S.in a garlic cream sauce.October 2010 Company Profile: Red Lobster Red Lobster. lower food and beverage expenses. chi cken and pasta. and topped with grilled Italian sausage in a tomato Alfre do sauce. One special deal the company ran was a $29. on a percent age of sales basis. driven by a U. Choose from: Chocolate Mousse with Dark Chocolate Cookie Crust • S trawberry & White Chocolate Cream Cake • Limoncello Mousse with Vanilla Cookie Cru st • Dark Chocolate Cake with Chocolate Mousse & Caramel Cream • Amaretto Tiramisu w ith Almond Cookie Crumble.50 (Small).99 seafood dinner for two. layered with cake. partiall y offset by revenue from four net new restaurants. $6.8 % change in sales 2007-09 680 690 # 1.7%.50 Warm Apple Crostata—Sliced apples. restaurant labor expenses and restaurant expenses were partially offset by increased selling. unit growth was only 1. $10. and Canada. another Darden brand along with the previously mentioned Olive Gard en. fruity Pinot Grigio that matches well with fish. such as Endless Shrimp. Rosat o (Blush) $4. Likewise. For the quarter.6% decline over the year prior. and berries. Red Lobster menu promo tions favor LTO annual standard events.5%.8% bel ow prior year.
7 4. however.2 28 15. aided by the nature of the special ev ent menu promotions.92 10. FIGURE 30: Red Lobster top demographics February 2009-March 2010 Base: 17. July 2010.SOURCE: Company releases Core Customers Red Lobster has a particularly strong following among black respondents to the E xperian Simmons survey. The report states that Red Lobster advertising should incorporate the mes sage of the special occasion or as a treat when looking to market to this group. Q3 2010 Restaurant menu information Number of items % of menu % of res taurant segment Average price Average price in restaurant segment Dinner menu $ $ Entrée 29 Appetizer Sides 3 Soups 3 Salad 1 Total 50 58 14 6 6 2 100 44.41 4. with salad.8 11.80 SOURCE: Menu Insights The cuisine types at Red Lobster do not vary significantly.99 14. By virtue of a sea food-based menu. 35+ 32 Black. Q4 2009-Q3 2010 Cuisine type Q4 2009 Share of menu items % Q1 2010 % % Q2 2010 % Q3 2010 . and the restaurant tends to angle it self as more a “special occasion” destination.54 15.. prices tend to run higher.549 adults 18+ who eat at family restaurants/steakhouses it Red Lobster % All 21 Ever Vis Black 31 HH Income: $75K-$99. HH Income less than $75K 28 Black.76 5. A great example of an ad understanding the consumer is a recent television ad f rom Red Lobster featuring a black couple having a romantic evening out. soups and sides generally in cluded in the meal along with unlimited Cheddar Bay Biscuits.20 9.16 9.48 8.34 16. HH Income $75K+ 39 SOURCE: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult Full Year—POP On the menu Red Lobster’s menu is dominated by entrées.9K 24 Not-Married with child(ren) 24 Black.7 18. which is echoed in Mintel’s Blacks and Dining Out—U. FIGURE 31: Makeup of Red Lobster menu.40 3.0 7.S. the past ye ar has brought a slight increase in Italian dishes. FIGURE 32: Red Lobster top five cuisine types.
8 3. Chang’s China Bistro.1 11. . as follo ws.9 76.$17.99 . $22. primarily due to the benefit of a 1-2% menu price increase and year-over-year im provement in the amount of high-dollar tickets. . Chang’s P. Company performance P. Chang’s restaurants.8 78. with the chain experiencing the same late -recession slump as did many in the segment.8% in 2010 over 2009. Chang’s sales increased 9% in 2009 over 2007 with unit growth of 14.99. then baked crispy and golden. tender shrimp and fresh tomatoes topped with a garlic Parmesan cream sauce on a bed of linguini.$21.$25.F. 2007 and 2009 2007 sales 2009 sales 2009 Units % change in units % change in sales 2007 Units .Sweet crabmeat. Parmesan cheese and bread crumbs. P.5 3. the Red Lobster menu additions highlight the special menu. according to the company.F.8 .99 Crab Lover’s Trio .9 76. Seafood-Stuffed Flounder.2 11.one full pound of steamed snow crab legs paired with choi ce of garlic shrimp scampi or hand-breaded shrimp.5 BBQ 5. The brand was named the full-service leader in Zagat’s latest annual survey for Mo st Popular and ranked number one for Facilities.50 Garlic Crab and Shrimp Pasta .50 Crab-Crusted Tilapia . Chang’s China Bistro is a full service upscale casual dining rest aurant and Pei Wei Asian Diner is a quick casual. Inc. Choose any three $22. Pepper corn-Grilled Sirloin ($4. “T he Bistro achieved positive same-store sales in the second quarter of 2010.F.F.99 (Small). Sales declined 6. At the end of fiscal 2009.9 76 2 SOURCE: Mintel Menu Insights New menu additions For Q3 2010.$21. .6 3. Wood-Grilled Fresh Salmon. Walt’s Favorite Shrimp. Parrot Isle Jumbo Coconut Shrimp.Choose any two $17.5 3.99 Casual Dining .99 more) Celebrate Crabfest Snow Crab and Shrimp .5%. limited service restaurant.8 Southern 1. owns and operates two restaurant concepts in the A sian niche. Descriptions provided by the company: Signature Combinations Create Your Own Feast .8 Cajun 3.” FIGURE 33: P. incl uding the benefit of positive traffic throughout the entire quarter. .Crab-and-seafood-stuffed shrimp in a lobster butter sauce with half pound each of steamed king and snow crab legs. there were 197 P.9 12 4 4 . Garlic Shrimp Scampi. Steamed Snow Crab Legs.F.US . Shrimp Linguini Alfredo.F. Served with f resh broccoli. Chang’s sales and units.North America Mediterranean North America North America North America - Traditional American Italian 9.Fresh tilapia topped with a creamy blend of sweet crabmea t.$14.99 (Large): Garlic-Grilled Jumbo Shrimp. However. Average tic ket at the Bistro declined during the quarter but sequentially improved in May.October 2010 Company Profile: P.
5 16 8.F.4 4.48 8.F.0 7. Chang’s menu.80 SOURCE: Menu Insights In keeping with the Asian theme.F. HH Income $75K+ 12 12 SOURCE: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult Full Year—POP On the menu With many menu items served family style. Q4 2009-Q3 2010 .85 3.03 16.5 4. blacks and Hispanic s from households earning $75K+ the most regular customers.16 6.$ million P.F.20 9. Chang’s % All 7 Ever Vis HH Income: $100K+ 12 HH Income: $150K+ 16 Females. however.7 4.76 6.2 17. entrées are the focus of the P.45 10.5 # 2007-09 SOURCE: Company releases P. salads and sides are not well represented. Chang’s key clientele are distinguishable primarily by household income.7 13.8 5. Chang’s top five cuisine types. Q3 2010 Restaurant menu information Number of items % of menu % of res taurant segment Average price Average price in restaurant segment Dinner menu $ $ Entrée 56 Appetizer Sides 8 Dessert 5 Soups 4 Salad 2 Total 91 61.45 5.8 3.549 adults 18+ who eat at family restaurants/steakhouses it P. FIGURE 35: Makeup of P. Chang’s has established a strong reputation for those following a gluten-free diet.F.24 5.F. Chang’s 849 $ million 925 9 2007-09 172 197 # 14. P. HH Income $75K+ Black. FIGURE 36: P.6 15.2 100 44. Chang m enu and does not vary significantly over time. with all respondents from households earning $100K+ and females.4 2.33 9.F. this type of cuisine dominates the P. Chang’s top demographics February 2009-March 2010 Base: 17. HH Income $75K+ 13 Hispanic.F. FIGURE 34: P. In general pricing is competitive. with the company taking extra preventive steps to ensure eliminating the risk of cross-contamination.95 6.F.33 15. Chang’s menu.
8 19. and mentioning the choice from 14 Chili’s “favorites like our new Sweet and Smoky Chicken Crispers.” and includes a shared appetizer and two entrées. quickly-cooked with scallions and garlic. BJ’s Restaurant Brewhouse’s LTO includes two small salads or soups. and in Q3 2010 added only the Dali Chicken – “Our spiciest chicken dish served with sliced potatoes” . Choices include a 12-Spice Chicken Panini at the lowest price a nd Grilled Salmon & Rice Pilaf at the top. morphing from the “3 for $20” to the current 20 Dinner for Two.” .F.4 Q2 2010 % 76. Promoting discounted meals is at the forefront of activity .3 3. showing a sampling of the foods that are a part of the special.8 North America .9 3. with two items for $6. O’Charley’s “Ultimate Choices” menu spreads 12 entrées across three price levels ($7.Cuisine type Q4 2009 Share of menu items % Q1 2009 % % 76.F. The following examples show the diversity of discounting seen across the segment : Applebee’s 2 for $20 also includes a shared appetizer and two entrées. Chang’s for Two Prix-Fixe Menu: Mongolia n Beef – “Our signature dish.October 2010 Marketing Strategies Overview Chains in the casual dining segment employ a variety of marketing and promotiona l efforts to attract consumer attention. In addition to traditional television advertising. with themes that are aligned with trend s seen in the market.95 Chili’s LTO has cycled on and off menus. The Create-Your-Own-Combo deal at On The Border.3 Q3 2010 Asian . In addition to offering regular meals at set pricing. The following Chili’s spot features the $20 dinner for Two.9 18. brands have also been using social media and email to engage patrons. with these deals als o often showcasing the wide range of menu items served by players in the segment . highlighting the Texas cheese fries ap petizer. Chang’s has limited new additions to its menu. The former vers ion included a shared dessert. and medium speci alty pizza and a Pizookie dessert for $19. Widespread promotion of discounted meals Discounted meal deals with “prix fixe” menus and tiered pricing have been the primar y method to encourage traffic at casual dining restaurants. and successful efforts utilize this integration to broaden the a udience net.99 and $9.” Casual Dining .99). these initiatives have a lso taken the form of providing the option of smaller-portion meals for a reduce d price.7 3. three items for $8.4 New menu additions P.99.US .49 with rice and beans.$13. as are targeting family dining dollars and efforts to attract a larger crowd a t lunchtime.” and Pepper St eak – “Quickly cooked steak with red and green bell peppers.5 76. and i n Q2 2010 added two new entrées to the P.Pan-Asian 79.95. garlic an d black pepper. yellow onion.Traditional American SOURCE: Mintel Menu Insights 4. Campaigns often take a hol istic approach.9 Asian – Chinese 17 19. 8.
The ad highli ghts meals that are made fresh to order and that “the extras are always on the hou se.99 (Grilled Baja Chicken). with 12 entrées priced at $7. 2010 "CHILI’S" SOURCE: VMS O’Charley’s features its Ultimate Choices tiered-pricing menu in this television ad.99 (“step up” to Cowboy Sirloin or California Shrimp Salad).99 (Bayou Shrimp Pasta ).” . $8. and $9.FIGURE 37: Chili’s (Chili’s Grill & Bar) television ad.
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