This week marked the first time Ebola was raised as a possible threat to restaurant sales, but that’s merely one sign of the times to spin beans during the last seven days.
1. Ebola concerns take a sales toll ...
... but not on the restaurants you’d probably expect to be affected. The initial cases of the disease arose in Dallas, but the unrelenting media coverage hasn’t scared away the business travelers who pack many of the city’s more expensive restaurants, according to a variety of sources.
Not the lease of them is the Del Frisco’s high-end steak house chain, which has a relatively high concentration of units in its home city of Dallas and elsewhere in Texas. “I haven’t seen any pullback in travel and I can tell you we are not seeing it in the restaurants,” Mark Mednansky, CEO of parent company Del Frisco’s Restaurant Group, told investors this week. “The conversation is there but the dining habits and the need to do business definitely have not been affected whatsoever. The Dallas market is extremely strong for us right now.”
A thousand miles north, in the Greater Minneapolis area, the story is much different. The region has a large population of Liberian immigrants, and at least one restaurant serving that West African clientele has suffered a drop-off in traffic because of ties to the old country. The Liberian-born proprietor, Mama Ti’s, told a local newspaper that she may have to close because of the business drop-off, and that’s after changing the name of the place to take “African” out of the title.
Still unclear is how a restaurant in New Jersey fared after being frequented—for takeout, no less—by a correspondent who had covered the Ebola outbreak in Liberia. The journalist is NBC medical correspondent Nancy Snyderman, and she visited the Peasant Grill while she was supposed to be quarantined as a routine precaution after her travels. The gossip website TMZ learned of the visit and quarantine lapse and bellowed the news, turning other media’s camera lights on the Grill. It has steadfastly refused to say how traffic changed in the days afterward.
2. Cell-phone amenities are the new bread service
Accommodating guests’ mobile devices is becoming as commonplace in restaurants as refilling water glasses for free. Consider the mix of amenities that Del Frisco’s Double Eagle chose for a new restaurant in Washington, D.C. There’s not a white tablecloth in the three-story place, an acknowledged turning point for the pricey steak concept. Ditto for the location of an electric outlet near just about all 400 seats and bar stools in the restaurant. “That allows our guests to charge their smartphones or tablets when they dine,” said CEO Mednansky, who indicated the restaurant would be a model for future Del Frisco’s restaurants.
3. Next gen iPads get a shoutout, too
With all the recent hoopla about the iPhone 6, some operators might forget that mobile ordering isn’t limited to smart phones. Domino’s won’t be one of them. This delivery giant revealed this week that the biggest boon to its digital business has been a new iPad app, not something written for the iPhone or a Droid handheld.
The new app has the “highest conversion and highest ticket of all of our digital ordering channels,” CEO Pat Doyle told investors. “It has exceeded all of our performance expectation and set new benchmarks, almost immediately upon launch.”
Not surprisingly, Domino’s intends to push the app, though Doyle didn’t reveal particulars of the plan.
4. Encouraging reads on holiday sales
After an unexpectedly strong third quarter for several chains (Del Frisco’s had an 8.4 percent comp-sales gain; Domino’s, a 7.7 percent rise), tealeaf gazers are trying to divine what sort of holiday season the industry can expect. They don’t have to look far for encouraging signs.
The National Retail Federation has forecast a sales increase for the nation’s department and specialty stores of 4.1 percent year-over-year, an encouraging prognosis for restaurants in malls and strip centers. If the projection is on target, the 2014 holiday season would be the first in three years to surpass a 4-point rise in sales.
Del Frisco’s echoed that optimistic outlook in an assessment for investors’ benefits. Bookings for holiday parties are running ahead of prior year’s levels, suggesting the best season in years, the executives revealed. The increase was attributed in part to a better sales effort on the part of the steak house operator, but there’s no doubt “the upscale guest is planning holiday parties at a greater rate this year than they were last year,” said CEO Mednansky.
5. Lightening up
Casual dining’s challenge can be summed up as bridging a generation gap. How do you reach out to new and adventure-seeking customers, especially millennials, without alienating the primarily baby-boom-aged customers who like what you’ve always been and don’t want to see that changing? The last week or so brought clear signs that some big-name players have hit on the right strategy. Ruby Tuesday, for instance, posted its best financial results in years, including a 1.3 percent increase in guest traffic.
The means are as varied as the brands themselves, and subtleties abound. Ruby Tuesday, for instance, found lighting levels to be one of the cues that made the concept “less approachable” to longtime customers, in the words of CEO J.J. Buettgen. In a bid to appear more sophisticated, the concept had dimmed the lighting in dining rooms, put blinds over the windows, dressed the servers in black outfits, and switched to muted elevator music.
The concept’s draw was increased appreciably by something as simple as cranking up the lights and the music, Buettgen explained. “Those things start to make a difference,” he commented.
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