Less Is More: New Strategies Give Casual Dining A Big Lift
Their patrons may be getting bigger around the waist - but sales at most casual dining chains in the U.S. are shrinking.
The standard tricks -- all-you-can-eat shrimp platters, early-bird lunch specials and other gimmicks -- aren't working.
Are customers really health conscious? Chains that react by offering healthy, diet-friendly foods usually fail. Diners rebel for taste or other reasons and sales stay limp.
But the folks who run T.G.I. Friday's had a brainstorm: They realized they could land more customers by serving them smaller portions. The idea was to get diners to order more by serving them less.
In February, the restaurant chain took a few of its popular entrees, and offered slimmed-down versions at slimmed-down prices. So far, it's "Right Portion, Right Price" program is fattening sales.
Friday's novel marketing tack is proving that creative approaches to buyer psychology can crack the toughest sales issues. By cutting prices and portions while offering customers more health-friendly dining choices, the popular chain got people to order more.
But there were some tense moments, concedes Richard Snead, CEO of T.G.I. Friday's parent company Carlson Restaurants Worldwide.
In the first few weeks, the average guest check plunged 4%, far more than they expected. The chain's franchisees wrung their hands.
"You have margin pressure, you have soft sales, and somebody says, 'Let's lower portion sizes, and see our average sales go down,'" Snead said. "That's a scary thing to do."
But after about 12 weeks, sales rebounded, as customers started rewarding themselves with desserts or an extra drink from the bar. Check sizes picked up in late May, and are now about 1% below a year ago.
The benefit, though, comes from the extra traffic through the door.
T.G.I. Friday's said it served 3% more guests in June than a year earlier. That same month, the rest of the casual dining industry was down almost 1%, according to restaurant analyst Malcolm Knapp.
External Source - For the complete article click here
Source - CNN
Are customers really health conscious? Chains that react by offering healthy, diet-friendly foods usually fail. Diners rebel for taste or other reasons and sales stay limp.
But the folks who run T.G.I. Friday's had a brainstorm: They realized they could land more customers by serving them smaller portions. The idea was to get diners to order more by serving them less.
In February, the restaurant chain took a few of its popular entrees, and offered slimmed-down versions at slimmed-down prices. So far, it's "Right Portion, Right Price" program is fattening sales.
Friday's novel marketing tack is proving that creative approaches to buyer psychology can crack the toughest sales issues. By cutting prices and portions while offering customers more health-friendly dining choices, the popular chain got people to order more.
But there were some tense moments, concedes Richard Snead, CEO of T.G.I. Friday's parent company Carlson Restaurants Worldwide.
In the first few weeks, the average guest check plunged 4%, far more than they expected. The chain's franchisees wrung their hands.
"You have margin pressure, you have soft sales, and somebody says, 'Let's lower portion sizes, and see our average sales go down,'" Snead said. "That's a scary thing to do."
But after about 12 weeks, sales rebounded, as customers started rewarding themselves with desserts or an extra drink from the bar. Check sizes picked up in late May, and are now about 1% below a year ago.
The benefit, though, comes from the extra traffic through the door.
T.G.I. Friday's said it served 3% more guests in June than a year earlier. That same month, the rest of the casual dining industry was down almost 1%, according to restaurant analyst Malcolm Knapp.
External Source - For the complete article click here
Source - CNN
