When war broke out with Iraq over its invasion of Kuwait, U.S. restaurants braced for a downturn in traffic. Many worried they’d be stung by what was dubbed the CNN effect: consumers staying home and watching minute-by-minute coverage of the conflict on TV instead of dining out. Meanwhile, operator after operator watched glumly as their employees in the military reserves returned to active duty.
Sales were affected—but only temporarily. And the industry generated considerable goodwill with its support of the more than 500,000 U.S. troops who were dispatched overseas to push Saddam Hussein’s forces out of Kuwait.
President George H.W. Bush asked the National Restaurant Association and other business groups to help national morale by doing what they could for the troops and publicizing the efforts. Restaurants responded by shipping batches of soldiers’ favorite restaurant foods overseas. Shoney’s extended a discount to the families of service members. Burger King shipped 3,500 cassette players to the Middle East for the soldiers’ entertainment. TGI Fridays reassured reservists their co-workers were eager to see them in a crew uniform again, and even sent recipes and employee literature to underscore they were still part of the team.
Segments emerge … but don’t all succeed
Although pioneering concepts such as Red Lobster, Tony Roma’s, Houlihan’s and TGI Fridays had been around for years, the 1990s was the decade when casual dining emerged as a dominant force. Initial public stock offerings provided brands such as Outback Steakhouse, The Cheesecake Factory and Lone Star Steakhouse with bales of capital to rapidly expand.
The industry was also preoccupied by a term that was coined by the team of outsiders who purchased Boston Chicken, at the time a small cult favorite of Bostonians, with the intention of turning it into the next McDonald’s. The driver, they said, would be the creation of a new industry segment called “home meal replacement,” or what detractors dismissed as a fancier name for takeout. The notion was to sell families wholesome, ready-to-eat meals they could serve on their home dinner tables without going broke or feeling guilty.
The idea was sold so effectively to the financial community that operators ranging from McDonald’s to Brinker International also charged into the field—only to find consumers were less enthused.
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