There is a balance to the restaurant cosmos that must not be disturbed, Grasshopper. Look at how an attempt last week to bolster success at one operation was offset by another’s almost simultaneous move in the opposite direction. Come, sit at the feet of the Old One and learn how yin and yang confounded any restaurateur looking for the one true path to strategic enlightenment. Let’s consider them two by two.
High tech or an apron pocket?
Applebee’s was one of the first big chains to provide guests with tabletop tablets for placing orders, but the experience hasn’t convinced the casual giant’s sizeable sister, IHOP family restaurants, to hit the On button, too.
“There are some other technological advances that we're looking at for IHOP that, frankly, are more important than that,” Julia Stewart, CEO of Applebee’s and IHOP parent DineEquity, told investors, causing more than a few heads to rotate.
She noted that changeover to guest ordering and check settlement wouldn’t be as easy as it was at Applebee’s, where the servers handled order taking and payments in the pre-tablet days. “You may or may not be aware that in the IHOP system, about 50 percent of the system uses server banking, and about 50 percent of the system uses cashiers,” Stewart explained. “So one of the things we have to find out is whether there is a value-add for the pay-at-the-table technology in both those service platforms.”
She did not reveal what other technology is under consideration at IHOP, which Stewart has twice served as president.
Meanwhile, she said, the after-effects of Applebee’s switch have yet to be determined. Asked if the tablets have improved the ailing casual chain’s traffic, presumably as a result of speeding table turns, Stewart shrugged. “We don't have that knowledge yet,” she said. Ditto for “what it does for the tips, for what it does to the speed of service or what it does to the average check.”
Menu pruning or packing more choice?
One of the ways BJ’s Restaurants hopes to bolster unit-level profits is by streamlining kitchen operations, an effort that pivots on shortening and simplifying the menu. The casual chain is already outfitting new stores with a bill of fare of 120 choices, compared with the 150 or 180 that are offered in older stores. The shorter list of options “can provide us even better cook times, quality and consistency,” CEO Greg Trojan said in an a conference call with analysts.
The payback can be so great, Trojan indicated, that BJ’s plans to try the shorter menu in a few older stores in September. And that could be a tough retrofit.
If a BJ’s restaurant opens in a new market with the 120-item menu, customers don’t know they’re getting a shortened bill of fare; they never saw the 180-choice roster, explained CFO Greg Levin. Not so with regular patrons of established stores. “They're all of a sudden seeing a menu at 125 or 130 items,” he noted.
The yin to BJ’s yang is the menu strategy being pursued by Ruby Tuesday, a casual chain that’s trying to right itself after a disastrous push up-market. To bring the menu back into core customers’ comfort zone, “we have introduced over 40 new or improved menu items” since last August, said CEO JJ Buettgen. Included are items like hand-cut salmon and low-country-style shrimp and grits, along with value lures like hand-breaded chicken fingers.
About 40 percent of menu orders now come from the added or changed items, he added, no doubt cranking some necks.
Next up to be reformulated: The chain’s Ruby Minis sliders. The bite-sized sandwiches, a Ruby signature, will be recast as Mini Masterpieces, a revamp that extends to the burger bites’ bun, patties, sauces and presentation.
Age or youth?
To all the colleagues, readers, relatives and anonymous concerned parties who feared we’d miss the BloombergBusinessweek story on Burger King’s management, chant a few om’s and strive for inner calm. We saw it when you did, and it wasn’t exactly news. It’s well known to those of us in the business that, as the story’s headline wryly asserted, “Burger King is run by children.” Millennials, in fact. Most younger than 35.
BK is merely one example of the age shift taking place in the corner office. Let us contemplate the tender age of the CEOs at Dickey’s Barbecue (Roland Dickey, early 40s), Jack in the Box (Lenny Comma, same deal) and countless fast-casual upstarts. Clearly many brands are embracing the fresh thinking of the next generation to differentiate the concept and keep it relevant.
But what’s better, a youth perspective or the wisdom that comes with experience and age? At least one restaurant investor grabbed a soapbox this week to evangelize for the latter. A major stakeholder in Bob Evans Farms has been demanding a change in leadership and strategic direction of the family chain. This week, Sandell Asset Management released a detailed plan for shaking up almost every facet of operations, from marketing to the menu to the guest experience. A follow-up explanation was provided by a slate of industry long-timers whom Sandell is plotting to put on Evans’ board.
They included former O’Charley’s and Tony Roma’s CEO David Head, one-time Arby’s CEO Doug Benham, and longtime Sonic CEO Steve Lynn, a god in the business during his tenure at the drive-in chain. Clearly Sandell believes long-bearded elders wield the smarts for greater success.
A head-spinning whiff of nirvana
Glaucoma being the scourge that it apparently is among readers of Head-Spinning Moments, we’re obliged to report that a leading alternate form of treatment will soon pose less of a food-contamination threat. A trade group called the National Cannabis Industry Association has taken the National Restaurant Association’s ServSafe food-safety program and tailored it to the people who prepare foods laced with marijuana or its THC extract. The curriculum will also presumably extend to “budtenders,” or the store-level workers who handle the edibles.
May it enhance their spiritual journey.