Steakhouses build customer base with promotions, proteins and emphasis on quality.
Morton?s of Chicago uses its private dining rooms for tasting events and cocktail parties that often attract women. The events help the chain dispel notions that it caters only to men, which has led to an upswing of female patrons.
Combination specials featuring items such as barbecued ribs and shrimp have shown to be strong sellers for Saltgrass Steak House. The promotions have helped the casual-dining chain attract new customers while boosting sales.
In a change from its usual cowboy-themed promotions, Durango Oak Fire Steakhouse menued Caribbean-themed skewered shrimp with mango-papaya-apple salsa to spark the interest of new customers.
Morton?s of Chicago New York strip steak
While diners? love of steak appears to be constant, beef prices are not. Cost increases reflected on menus last year posed a challenge for many steakhouses and they responded with strategic menu modifications and promotions to sate customer demands without sacrificing quality or profit.
Happily, price spikes coincided with diet shifts that emphasized proteins and an improved economy that made higher prices more palatable for many consumers. ?The U.S. consumer is eating more beef,? says Lynne Collier, a Dallas-based restaurant analyst for Stephens Inc. of Little Rock, Ark. ?The protein-heavy Atkins Diet certainly helped out, but demand is up.?
Cattlemen?s Beef Board announced in February that its Beef Demand Index increased nearly 8% in 2004. Higher demand was a factor in price increases. The U.S. Department of Agriculture (USDA) reported that the Consumer Price Index for beef and veal rose 11.6% in 2004 and is expected to increase 1% to 2% this year.
Price hikes haven?t significantly hurt high-end steakhouses, according to Collier. ?There is more expense-account dining right now,? she says. ?Despite the recession, it has held up well. Wealthy consumers haven?t been hit as hard and they?re continuing to eat out.?
Upscale steakhouses such as Tampa, Fla.?s Bern?s Steak House and chains such as New Hyde Park, N.Y.-based Morton?s of Chicago (systemwide sales up nearly 10% in 2004) and New York City-based Restaurant Associates? Nick+Stef?s Steakhouse & Bar, reported solid sales gains last year.
Sales for the casual-dining steakhouse segment grew 7.3% in 2003, according to Chicago-based foodservice consultancy Technomic Inc., with 2.9% increase in units. Of course, steak?s popularity as a patron pleaser isn?t limited to steakhouses. R&I?s 2003 Menu Census finds that 61% of all casual-dining operations offer strip steak (New York or Kansas City cuts).
Many midscale steak and casual chains, catering to a more price-sensitive clientele, have changed their menu mix (keeping steak, but adding other protein options as well), implemented new portion sizes, varied flavor profiles for entrées and launched stronger marketing programs targeting both loyal and prospective customers.
The latest promotion by the Southwestern-themed Durango Oak Fire Steakhouse chain aims to take patrons on a vacation from the concept?s usual menu. ?Everything we?ve done has always had a cowboy slant to it,? says Dave Poore, president of Clearwater, Fla.-based Durango. ?This time we wanted to pick up flavor from the south of us and to the east.?
The Carib Carnival menu features spices and flavors traditionally aligned with Caribbean-influenced dishes, including jerk seasoning, chiles and fruit salsas. Durango?s 8-ounce sirloin is seasoned with a peppercorn rub and served with mango-papaya-apple salsa; skewered shrimp are basted with sweet-and-spicy chile glaze; and roasted half chicken is seasoned with habanero chile and jerk seasoning and dressed with fruit salsa. Poore says utilizing proteins already on the menu allows Durango to create interest without added cost.
?Our strategy is to create that extra visit,? he explains. ?We didn?t want to do just another steak promotion.?
Poore adds that the price points are similar to those on the regular menu at the 16 Durango locations, noting that the $11.99 shrimp meal with 20 pieces of shrimp includes salad and bread. ?We wanted to see if something like this would appeal to our customers,? he says. ?So far it?s moving really well.?
Like Durango, Stoney River Legendary Steaks saw the challenges of managing its food costs as an opportunity to attract new business and reward loyal customers.
In 2004, Stoney River? owned by Nashville, Tenn.-based O?Charley?s?added beef filet medallions to its menu, serving two or three, 3-ounce, center-cut portions as a featured entrée, with red wine and béarnaise sauces.
?We looked at the medallions as a way to help our costs but also as something we could be creative with,? says Vice President Tony Halligan. ?The idea was to do something for the regular guest.? Prices for filet medallion meals?$19.95 for two medallions and $24.95 for three?include either a side of garlic-mashed potatoes or asparagus.
Increase in the servings of steak sandwiches with cheese from 2002 to 2003, making it the fastest-growing sandwich option on U.S. menus.
(NPD FoodWorld/National Cattlemen?s Beef Association)
In addition to the medallions, one location experimented with a coffee-cured filet, using a 10-ounce portion already on the line. Following surprisingly strong sales, it was rolled out to all six locations. ?It turned out to have great guest appeal,? Halligan says.
For Saltgrass Steak House (owned by Houston-based Landry?s Restaurants), repeat business is not accomplished with steak but rather a one-two punch of ribs and shrimp. ?Each sells pretty well independently but they sell exceptionally well when we promote and market them together,? says Terry Turney, Saltgrass vice president of operations. ?It?s a promotion that grabs the attention of first-timers.?
Turney says the combination, priced at $15.99, allowed the casual-dining chain to react to higher beef prices without changing what it considers to be its big draw: steak.
?In our major markets we have a lot of repeat customers and our formula has worked well,? he says of Saltgrass? decision to maintain price points and portion sizes. ?We haven?t seen a need to make major changes.?
Tumbleweed Southwest Grill is on the heels of a year that saw a 7% increase in customer traffic, a statistic for which its president credits careful marketing and strict attention to labor costs.
?We?re still using the same USDA choice steaks,? says Terry Smith, president of Louisville, Ky.-based Tumbleweed. ?We?ve let people know that we?ve kept our prices and portions the same.?
Opting to absorb higher food costs, Smith says Tumbleweed instead looked at managing labor costs. ?We reduced overtime hours by hiring sufficient staff,? he says. ?Increasing the number of employees provides much better service for our customers.?
Turney takes a similar approach, explaining that he?s forced to turn to other areas of his operation to counter costs rather than raising price points.
?We control how consistent we are in the restaurant,? he says. ?It goes back to the value equation of ?Are you getting what you paid for?? Whether that?s on the plate or from the server standing next to you.?
No matter what is to credit for the recent surge in seafood as a hot-ticket item on upscale steakhouse menus, Chef Jean Christophe Villard welcomes the trend. The newly appointed executive chef of Nick+Stef?s Steakhouse & Bar in New York City says he?s been ?slowly trying to make people go for fish? for some time.
?I have more seafood coming up in the next couple of weeks,? Villard says. ?We started serving only big portions of center-cut fish such as salmon and swordfish, and it?s doing very, very well.?
Villard says he placed soft-shell crabs on his menu for the spring and watched them fly out of the kitchen. ?I?ll do 120 lunches and sell 30 to 40 crab entrées out of that.?
Despite reputations to the contrary, steak and chophouses are no longer just good ol? boys clubs. In recent years, traditionally masculine steakhouses have been altered to welcome women within their wood-paneled confines.
?We specifically started to give out black napkins,? says Joe Saccone, president of Twinsburg, Ohio-based Hyde Park Prime Steakhouse. ?Women didn?t want to deal with lint from white napkins on their black dresses.?
Saccone says his six units have added purse hooks to the bar, softened their décor and added the shoe polishers that once were the sole province of the men?s room.
?When it?s winter and your shoes are stained with salt, you want to clean them up before having a nice dinner out,? says Saccone. ?Women are no different than men.?
New Hyde Park, N.Y.-based Morton?s of Chicago has seen an upswing in female patronage as a result of its private dining rooms, available for cocktail parties and special events.
?Some of our events cater to a female audience,? says Patty Pleuss, vice president of marketing for the chain. ?For a woman who expects the typical men?s restaurant, it allows us to wow them with service and food. The perception goes right out the door.?
Dwayne Carpenter says Fleming?s Prime Steakhouse & Wine Bar, a Tampa, Fla.-based unit of Outback Steakhouse, has been working for years to make their locations more appealing to women by using hand-blown crystal, broadening the dessert selection and providing floral arrangements throughout the restaurant.
?We want to appeal to women, couples and families,? says Carpenter. ?We don?t want to be a cigar-smoking, sea-of-suits restaurant.?
Despite a traditionally higher cost, Kobe beef?Japanese beef bred to be heavily marbled?is appearing on more menus and at more approachable prices.
- Carpaccio of Kobe beef sirloin, aged pecorino panna cotta, crisp pancetta chips and truffle oil ($24)
The Federalist, Boston
- American Kobe prime rib with horseradish cream ($39.25)
Gibsons Bar Steakhouse, Chicago
- Kobe beef hanger steak with celery-root cakes, asparagus and tarragon ($25)
Nell?s Restaurant, Seattle
- American Kobe beef sirloin ($95)
Old Homestead Steakhouse, Atlantic City, N.J.
- Kobe beef hot dog served with traditional condiments ($20)
Prime One Twelve, Miami