| For more than 40 years casual-dining operations | | | | the exceptional growth of the recent past. |
| of all stripes have enjoy incredible growth and | | | | With this said, there are legitimate challenges to |
| success. Starting with restaurants like Red | | | | casual-dining's long dominance. The Fast-casual, |
| Lobster, Steak & Ale, and T.G.I. Friday this | | | | Family-dining, and Quick-service segments are |
| segment of the restaurant industry has carved | | | | making obvious efforts to woo potential |
| out a dominate role in hospitality and a warm spot | | | | casual-diners with updated menus, decor, |
| in the hearts of Americans. Casual restaurants like | | | | advertising, and discounts. For example, there is |
| Olive Garden and P.F Chang's have introduced | | | | very little daylight between Panera Bread's current |
| millions to approachable interpretations of foods | | | | decor package and many casual-dining operators, |
| and cultures that weren't available in many | | | | IHOP continues to push dinner, and Pizza Hut has |
| locations. The segment, as a whole, has provided | | | | started delivering pasta entrees. |
| countless hours pleasure and escape from the | | | | |
| daily grind. | | | | If this were not enough, food retailers are also |
| This is exactly why a recent article in Nation's | | | | aggressively getting into the game. Whole Food's |
| Restaurant News caught my attention. The article, | | | | now have seating areas, Kroger's supermarkets |
| by 35-year industry veteran and training expert | | | | sell heat-and-server molten lave cakes, and Bertolli |
| Jim Sullivan, offered an interesting take on the | | | | television ads claim their pasta entrees are |
| future of casual-dining. Mr. Sullivan draws a striking | | | | "Restaurant Quality". I think the fancy economic |
| parallel between the economic events of the | | | | term for all of this is "Increasing availability of |
| 1970's, that helped give birth to the casual-dining | | | | substitutions". What ever you call it, it can't be |
| segment and today's dramatic economic changes | | | | good for casual-dining operators, who don't |
| affecting the segment. He rightfully, points out | | | | differentiate themselves in the future. |
| that this is in no way a run of the mill "downturn", | | | | Looking back just two years ago to the |
| where things go back to normal in 18 months or | | | | good-old-days of casual-dining, none of this meant |
| so. Instead, the segment is likely to see a | | | | much. Anyone with an "A" site, "Me Too" menu, |
| shakeout unique from anything seen since the | | | | and cute ads, could expect solid guest traffic. With |
| birth of casual-dining. This begs the question, what | | | | housing subdivisions and adjacent commercial |
| is that will it take to survive in this "New Order"? | | | | space sprouting up like wild mushrooms across |
| Two points have to be made to keep such a | | | | the country, along with, historically low |
| discussion in perspective. First, the long-term | | | | unemployment and easy credit; respectable |
| outlook for casual-dining is quite positive. There | | | | growth was almost certain. Now in a re-setting |
| are now two generations of American adults who | | | | economy, characterized by an imploded housing |
| have grown up in dual income families, where | | | | market, high unemployment, and tight credit; |
| casual dining is a treasured activity. Secondly, | | | | operator will have to adapt to survive and thrive. |
| major operators like Darden Restaurants, Buffalo | | | | Given the radically changed environment, I believe |
| Wild Wings, and Brinker International, have | | | | the casual-dining leaders of the future will be |
| weathered the initial stages of the current | | | | those with the courage to drive innovation, the |
| "downturn" well. Their results support the opinion | | | | discipline to drive execution, and the resolve to |
| that we are not talking about a dramatically | | | | manage change. |
| shrinking segment; rather one that may not enjoy | | | | |