Great Taste Magazine

by Melissa Banks Spring 2009 IssueRecession or not, people are still dining out. Restaurants continue to attract loyal clientele during frugal times by promoting value-driven incentives and re-evaluating necessary operational expenditures. The only issue: how will these establishments maintain and increase business while weathering the economic storm?Despite sky-rocketing unemployment rates and a hefty decline in consumer spending, many restaurants are forecasting a profitable new year. Many local diners report an un-effected traffic flow emphasizing a reduction in high-average bills rather then attendance. Industry professionals have noted that more consumers are splitting entrees while foregoing cocktails and soft drinks to reduce spending. In response, establishments are promoting a more intimate and customized guest experience including subscriber newsletters, promotional mail-outs, behind the scenes access via on-line and on-site kitchen tours, promoting industry specific happy hours and pre-set menu offers as a means of re-establishing the tradition of dining out as an experience rather then an expense.Area Chefs have admitted to cutting back on lavish menus, emphasizing now on simplified fare. Many are now offering shorter, fix-priced menus featuring high-quality, seasonal and accessible produce. Chart House Managers report alternatively focusing on preserving their establishment’s reputation and consumer loyalty while continuing to offer quality products. Solutions have included reducing staff for both the front of house and back-end operations whenever possible.

Sommeliers are also approaching the industry in new ways to regain connoisseur loyalty. A market traditionally characterized by steep prices and massive competition, wine distributors are now focused on selecting high quality wines that also offer consumers the best value. Wine enthusiast’s purchasing behavior has not been significantly reduced, but their tendency to purchase products in lower price categories has risen considerably. Distributors are facing the challenge head on, offering more split case offers while retaining discounted pricing in order to keep inventory moving and trying to combat a trend on the rise – BYOB.

Many establishments view the current economic challenge as an opportunity to expand their capabilities. Michael’s on Naples reported an increase in traffic after recently acquiring a liquor license and now offer happy hour promotions. These new promotions resulted in increased traffic as well as a notably profitable quarter. Additional tactics have included offering catering services and cuisine specific educational courses for employees emphasizing the industry’s recognition that dining out needs to reclaim its reputation as an American experience rather then a casual pass-time.

Restaurateurs historically address the challenge of drawing in additional traffic regardless of economic pressure. Today’s market is challenged by the need to reaffirm relationships with consumers. Regardless of menu pricing, client loyalty will always be an organization’s most dependable and cost effective marketing tool. The hospitality industry will continue to forecast a profitable future as guest experience and value-driven incentives are established.

 ”Tried and True” but maybe not for everyone

Happy Hour – many establishments are bringing back happy hour, some with extended hours, some with later after dinner hour specials

Area wide promotions – Cities, County and even shopping area specific restaurants and joining forces to bring more diners

Corkage Fee Adjustments - On the slowest of nights corkage fees are sometime disappearing and are often reduced

Prix Fixe – more and more restaurants are introducing special menus where diners feel like they are splurging on multi course meals

Kids eat Free – bring the kids to bargain dinners. Restaurants are encouraging entire families to dine together so parents don’t have to think about the babysitter.

 Coupons – seems that many more coupons are circulating. More are being offered and more are being utilized