Restaurant and Food Service Blog

Based on a study of changes and activity in restaurant concepts by RestaurantChains.net from November 30, 2008 to March 30, 2009, the following trends emerged[*These are concepts that changed by at least 5% (if less than 50 units).]:

• The Egg Harbor Café of Lincolnshire, IL grew by 7% with the introduction of one new unit. This increased its units from 14 to 15. These family/casual American restaurants offer breakfast and lunch for around $3 to $8 per person.
• Sweet Lorraine’s of Southfield-MI grew by 33% with the addition of one new unit (now totaling four). Additionally, the restaurant chain ventured into the state of Pennsylvania. Serving American cuisine for breakfast, lunch, and dinner in an upscale concept environment, patrons can expect a per-person check average of between $15 and $30
• Ann Arbor, MI-based Sweetwaters Coffee & Tea experienced 50% growth when it increased its units from 2 to 3. Open for breakfast, lunch, and dinner, these quick-serve cafes offer meals averaging between $2 and $6.
• Mr. Greek Restaurants of Toronto, ON increased its number of units by 4, growing from 13 to 17—an increase of 31%. These family/casual Greek restaurants offer lunch and dinner with a full bar option and a check average between $6 and %15+ per person. There is also a second restaurant concept called Mr. Greek Express, which grew by 18% during the same period, with the addition of four new units (22 to 26).
• New York-based Il Mulino grew by 9% with the addition of an additional unit (now totaling 12). Additionally, the restaurant chain expanded into the state of Georgia. These upscale Italian restaurants offer dinner with a full bar option and have a check average of $15 to $50+ per person. In addition to its locations in NY and GA, Il Mulino can also be found in DC, FL, IL, NJ, and NV.

Celebrity chef-restaurateur Bobby Flay and business partner Laurence Kretchmer are moving downscale with the launch of what is expected to be the first of a chain of fast-casual burger joints. It seems as though the “better burger” segment may be the “it girl” today. With the current news on other better burgers such as Five Guys and The Habit, it seems as though every one wants some skin in the game.

But with the scare du jour, ie, salmonella, mad cow, etc, how are we so sure that this latest craze will not get snuffed out by something so random? Peter Romeo in his latest blog posting, Bugging Out, talks about how something such as the current salmonella breakout can turn into something very different once in the hands of the public perception.

But as the US economy continues to look bleak there is still a ray of hope for the restaurant industry as smaller concepts continue to grow and show that they have legs. These smaller concepts, although very risky, are probably where we are going to see the greatest grow potential in the next year.

read more | digg story

NexCen Brands Inc., the licensing and franchising company that sank 77 percent yesterday after saying it may have a cash “shortfall,” said it can’t rule out bankruptcy as it considers its options.

“As noted in our SEC filing yesterday, the company believes there is substantial doubt about our ability to continue as a going concern,” the company said today in a statement e-mailed to Bloomberg News.

This company was on a tear with purchasing several restaurant brands such as Maggie Moo’s, Marble Slab and Great American Cookie. Now look. They stock has plummeted and there is talk of the company filing Chapter 11. They just appointed a new CFO in March and it is tanking hard.

This may be one of the first of many casualties in the restaurant industry for 2008. It is not surprising that rapid development like Nexcen in today’s current economy was going to eventually catch up. From shoes to fashion to pretzels and ice cream, I think that D’Loren’s strategy of diversifying is not the answer here.

I would be interested to see if Iconix, a smaller but similar model to Nexcen will follow suit.

read more | digg story

Pollo Campero, the world’s largest Latin chicken restaurant chain, has opened a restaurant in the Wal-Mart Supercenter in Rowlett, Texas, its first ever in a Wal-Mart Supercenter.

First it was Blimpie not the Latin Chicken chain is making waves with Wal-Mart. It will be interesting to see how many of these Pollo Campero’s open up across the Deep South and Southwestern states. This seems like a can’t miss play for the chicken company. A good portion of Wal-Mart’s customer base is probably the same as Pollo’s so the synergy is good. The hispanic market is probably one of the most loyal customer bases around. Win-win in my book.

read more | digg story

LOS ANGELES (AdAge.com) — “Howard Schultz insists he’s returning Starbucks to its roots, but he’s doing it with mass-marketing tactics once anathema to the original brand. The company is estimated to have nearly doubled its marketing spending to $100 million, and last week it began an aggressive coupon program unlike anything in its history, raising questions about its turnaround strategy.”As a former Starbucks partner, I am shocked to see that the company is going the route of couponing. During my time at the Siren, it was always about the quality of the product and there was never a reason to have to discount the value of a quality cup of joe. But it looks like a desperation move by Schultz and the gang there.What I find more interesting is My Starbucks website – an interactive blog site where customers can voice their opinions to the company. In a telling statement of the state of the company and its interaction with customers, it looks like customers want something “free” from the company for being loyal to the brand. Seems to make sense. Buy 10 cups and the 11th one is free. Seems like a no brainer. But for so long the company did not have to do these types of tactics.In the end, it seems clear that the companies that can be most nimble and in touch with its consumer base will win the battle.read more | digg story

Wendy’s is finally sold to Triarc. This has been a long time coming and I am sure there are a lot of folks in Columbus who are happy to know that there is an eventual buyer. We will have to see if the partnership with Arby’s is really that great. Arby’s has been making some moves lately, but nothing of any great significance.Over the past couple of months, Wendy’s has seen several key people leave in Marketing and HR. Now I wonder, what will happen to these open positions and will Nelson Peltz really be able to turn around this brand. I was in a Wendy’s just a couple of weeks ago and found it to be a tired brand in need of a real shot in the arm. Everything from the menu boards, POP to just the overall experience was blah. Yes, blah.What would Dave Thomas be saying if he were around?read more | digg story