To relive the restaurant industry’s performance for the last three months, run headlong toward the nearest pool and cannonball off the diving board. Wait—we forgot to mention you should drain the water first.
In short order, an up-and-down first quarter gave way to a loud early summer splat. No one is sure about the why’s, though theories abound. The business may be suffering a hangover from all the development private equity has fueled. Others say the problem is either rain or too much sun. And many pundits speculate that consumers are afraid to leave the house because of social turmoil and terrorist attacks.
Just as varied have been operators’ ways of coping, from running an exalted yard sale to helping customers avoid orange fingers.
Here’s a sampling.
1. What are memories worth? Try $4.1 million.
Among the victims of changing times is the original Four Seasons, arguably the most famous restaurant in the nation, if not the world. What better way to end the landmark’s run than by selling its contents, from check holders to bar stools?
The proprietors did exactly that this week, holding an auction in the power-lunch bastion’s Pool Room. The liquidation sale drew a far different crowd than the bargain hunters who cruise Saturday morning tag sales. A set of ashtrays fetched more than $5,500, according to an rundown of each item's estimated price. A three-piece silver service set drew bids of more than $1,400. A banquet sold for an estimated $15,000.
Alex von Bidder and Julian Niccolini plan to open a new Four Seasons within a five-minute walk of the original in about a year.
2. Cheesecake Factory’s free ad campaign
The industry slowdown has been particularly severe for casual chains. The Cheesecake Factory has fared better than most chains in the sector, and it revealed this week that it will likely benefit in the months ahead from a marketing windfall of sorts.
The high-end concept will be the focus of a new national advertising campaign for MasterCard’s MasterPass virtual wallet. Among the proprietary systems that will be included in MasterPass is CakePay, Cheesecake’s brand-new mobile ordering and payment option.
“This campaign will garner significant awareness for both CakePay and our restaurants,” CFO Doug Benn told investors this week.
Best of all, “we are contributing nothing other than our wonderful brand,” added CEO David Overton.
The situation is reminiscent of Danny Meyer’s appearance in an American Express TV commercial years ago.
3. Mocking Danny Meyer
Among the more interesting adjustments to the times, hands down, is Meyer’s ongoing experiment with an alternative way of compensating servers and back-of-the-house personnel. He’s essentially replaced tipping with a profit-sharing model that lets everyone in the restaurant share in the success of the restaurants where the practice has been adopted.
Not everyone sees the brilliance of that approach. This week The New Yorker poked fun at Meyer with an essay purportedly written by a restaurateur who followed the lead of the famed New York City operator and dropped tipping at his place, French Word.
“Getting rid of tipping worked,” wrote the " proprietor," Keaton Patti, who cited Meyer by name at the start of his piece. “So now I’m getting rid of everything else.”
The big yuck-yuck is that French Word is chucking everything a consumer would associate with a restaurant, from menus to napkins, plates, tables and even food.
"'Good luck getting customers,' you say.
"What customers? They’re gone. Nobody’s allowed in the restaurant, not even me."
4. Payback of employee breakage charges
Restaurant owners aren’t the only ones challenging traditions as they feel the pinch of the times. Servers who resent having to pay for broken glass or dishware are aiming to get their money back in a lawsuit that’s about to begin, according to news reports that surfaced this week.
The defendant is Hyman Seafood Co., operator of the famed Hyman’s Seafood restaurant in Charleston, S.C. The company has reportedly acknowledged that it ran afoul of labor laws with the charge backs. The court will be asked to decide how much the 160 plaintiffs should be compensated.
5. Fast food’s orange bullet?
Who’d have thought the ingredient of the moment would be Cheetos, the crunchy cheese puffs that leave fans delightedly orange-fingered?
First Burger King struck gold with Mac n' Cheetos, a new side of macaroni and cheese tucked inside a Cheetos-like crust.
Now comes word that the king of weird snack-food mash ups, Taco Bell, is about to start testing Cheetos Burritos, a premium item that rolls the crunchy treats together with seasoned meat and rice.
Meanwhile, Taco Bell has yet to pull the trigger on a taco made with a shaped, fried chicken breast in place of the outer cornmeal shell.