chain operators take on tablets, cut wine prices and contemplate divorce
In an economic period still challenging for chain restaurants, staying flexible and making news is one way to drum up new business. On the financial side, it looks like some people think that small, or at least smaller, is beautiful.
Take Chili’s Grill & Bar, which said last week that the company would roll out tabletop tablets in all 823 U.S. company-owned restaurants this time next year. The tablets will give guests the ability to order menu items, play games and pay their bill without server assistance.
After a test of various tabletop devices in numerous Chili’s units, executives at the casual-dining brand found that some sectors of the menu boomed: dessert sales increased as much as 20 percent and coffee sales saw big increases as well. Just goes to show that the bad habit of neglecting customers after they’ve finished their entrée has continued – without tablets, these guests might still be waiting for their coffee order to be taken.
Franchisees in the nearly 1,600-unit chain are likely to include the devices in their own locations. Each Chili’s unit will have about 50 of the seven-inch tabletop devices; the chain, owned by Dallas-based Brinker International, currently has tabletop tablets in about 200 locations.
Meanwhile, Romano's Macaroni Grill has continued to try to shake up the staid Italian-American dining arena, this time following the summer’s impressive wine promotion with its new $15 four-course, Italian trattoria-inspired tasting - half-price Italian house wines will continue on the menu for a limited time beginning Oct. 21.
Macaroni Grill’s half-price deal on its house wines will continue through the end of the year. Served on the restaurant's honor system, the Valoroso Toscana wines, imported from Italy's Tuscany region, will be just $2.75 a glass or $15 for a 1.5-liter bottle. It’s another sign that the Italian-themed chain restaurant scene is getting a revamp in both food and drink.
Not so long ago, the trend was for chain operators to expand their formats; now, there’s a move afoot to refocus at least one major player on a narrower approach. Darden Restaurants Inc. has reportedly hired investment firm Goldman Sachs to review recommendations from an activist investor that has sought to break the company into two restaurant companies and change its real estate approach.
The hedge fund, representing about 2 percent of Darden shares, is pushing the company into splitting into two: one company operating Red Lobster and Olive Garden brands, with another spinning Longhorn Steakhouse, Seasons 52, Eddie V’s, Yard House and Capital Grille.
Spurred by recent disappointing results, the investment firm wants Darden to break into components, shed real estate and cut operating expenses company to spur a rebound of the stock.
Darden, the nation’s largest casual dining company with more than 2,150 restaurants, reported in September a 36.6-percent decline in profit for the first quarter ending in late August. Same-store sales at their 832-unit Olive Garden and 704-unit Red Lobster chains slipped in the first quarter, falling 4 percent and 5.2 percent, respectively. Other brands had mixed performances – Longhorn, Bahama Breeze, Capital Grille and Eddie V’s up, while Yard House and Seasons 52 were down.