“The Right and Wrong of Tough Times”
By Tom Haas, CEO of The Haaspitality Group
Joseph A. Banks is a major discounter of men’s clothing who consistently offers two-for-one merchandise. Buy one suit, get one free; buy one sports jacket, get one free. This is a strategy that places this company as a price/low ball retailer that will make it difficult to go back to the old fashioned “Buy One, Get One”, which is the normal way of doing business.
This applies to the restaurant business due to the economic environment, which needs no explanation, and which finds many operators struggling to find the proper strategy to build business without throwing the baby out with the bath water.
A small group recently dined at a well-known upper level seafood chain. The experience was less than favorable due to the restaurant unit’s approach to the customer in delivering a credible experience.
We were introduced immediately to the various pricing specials such as wine. The waitperson suggested a Sauvignon Blanc that regularly sold for $9.00 a glass and was on special for $7.00. A different Sauvignon sold by the bottle was reduced from $39.00 to $34.00. Also, he named a number of entrée deals that had been reduced as well – it was almost a Wal-Mart experience.
Next, the waiter suggested the special of the week, which was Wild Halibut, a firm, white, thick fish. Halibut happens to be one of my favorites, which like cod is seldom on menus. Halibut is a huge, heavy fish caught off Northern Canada and Alaska at depths sometimes of 150 feet according to two in our party who had actually been halibut fishing in Alaska.
The menu presented the halibut with “spring ramp” (wild leeks) and crab gnocchi. I asked to substitute the gnocchi with sautéed spinach, which was accepted. When the entrée arrived, the fish was sitting lonely on top of the spinach with spring ramps nowhere in sight. The configuration of the special was the perfect shape of a filleted fish with a tapered tail end and a seam in the middle running the full length of the portion. This entree failed dramatically to match the promotion poster on the wall which was plastered in the entrance foyer, as the consistency of the fish was light and flaky, which is not at all the characteristic of halibut.
It seems that this chain has a problem determining how to deal with the recession, as they fail to understand how to protect their brand and have difficulty promoting their pursuit of value without positioning themselves as the Joseph A. Banks of Seafood Restaurants.
Pricing is not the only tool available to promote value and protect one’s brand without confusing the customers. Value is based on quality, consistency, service, ambiance, hospitality and price. In its premier issue, “Eating Well” magazine traced the journey of an Oregon Rockfish from the moment it was caught, frozen, shipped, distributed over a three-week period, finally showing up on a menu in the Midwest as red snapper. Integrity is a key component of brand protection, which can very well determine how you fare in these difficult economic times. Once you lose the trust of your customer, any operator will definitely have a limited life as a going concern.
This difficult market is an opportunity for the wise and astute professional managers who are leaders, and respectful of their customers, focusing on quality, consistency and integrity, regardless of the special offerings for the week. These three elements are not sometime specials, but all the time fundamentals of staying in business. The best deal in the restaurant business is the operation which fulfills their promise and realizes that price should be based on value not cost, with value defined by Webster as something intrinsically valuable or desirable, which translated means more than two for one specials.
Today’s foodservice industry demands strong leadership
When traveling the high seas, whether in calm or stormy waters, one needs an experienced, dedicated, competent and committed leader to guide the ship.
Today’s foodservice environment has been described by stewards of the industry as being in the middle of a perfect storm.
The ingredients for a steward to be able to guide the business in the right direction are clear vision, solid operations know-how, a passion for food and beverage, and a commitment to presenting a solid value proposition to the customer.
When the helm is in constant turmoil and when corporate ownership strives to take out from rather than invest in a quality concept with qualified and dedicated leadership, you have the ingredients for a tragic outcome.
When Steak and Ale and Bennigan’s were under the stewardship of Norman Brinker, both were successful and innovative concepts that helped to train many of today’s leading industry executives, including Dick Frank, chief executive of Chuck E. Cheese’s; Hal Smith, former president of Chili’s; Lou Neeb, chairman of Mexican Restaurants; Chris Sullivan, Bob Basham and Tim Gannon, founders of Outback; Rick Federico, chief executive of P.F. Chang’s; and Dick Rivera of Rubicon Enterprises.
When bloodthirsty corporate vultures with minimal passion for or commitment to the industry take ownership, it’s a sure recipe for mediocrity and failure, regardless of the economic conditions.
The demise of Norman Brinker’s original concepts, Steak and Ale and Bennigan’s, closes a memorable chapter in the history of the restaurant business.
This failure should not be taken lightly and should not be blamed on the economic crisis. The ABC’s of this business never really change, and unless ownership understands the challenges that all restaurant operators must confront, they will realize that maintaining a restaurant brand has basic requirements and allows no room for short cuts.
The rewards can be great, but one must put in before you are able to take out. —
Thomas J. Haas