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Fast Casual: A Year to Remember
From first to last quarter, 2005 was a growing year for the fast casual restaurant industry. In September, Raymond James analyst Bryan Elliot said dining out had become "embedded" in the American lifestyle. This theory was indeed proven when some of the major chains announced their earnings.
January 3, 2006
From first to last quarter, 2005 was a growing year for the fast casual restaurant industry. In September, Raymond James analyst Bryan Elliot said dining out had become "embedded" in the American lifestyle. This theory was indeed proven when some of the major chains announced their earnings.
Starbucks announced record-breaking fourth-quarter net earnings with $494 million. The 27-percent increase was boosted by an additional company record, the opening of 1,672 shops.
P.F. Chang's was another big winner. Its third quarter revenues grew 17 percent. According to Business Week, company revenues have grown in the 30-percent range the past four years.
"Before they (P.F. Chang's) came along, no one had been successful at doing a casual-dining Chinese restaurant," said Eric Wold, an analyst with Merriman Curhan Ford & Co. in Austin, Texas, in a Business Week report. Another Asian restaurant, Benihana Inc., announced a 7.9-percent increase in company-wide comparable sales in October. Benihana's total revenues were up 13.6 percent from 2004.
The FC industry also saw the growth of smaller chains like Famous Dave's Legendary Pit Bar-B-Que, which opened five restaurants in the Florida panhandle. And Fresh City signed major franchise expansion deals with Fresh Start Enterprises in Chicago and New Jersey.
Technology impacts
Patrick Walls, CEO of McAlister's Deli, was excited about a paging program from Long Range Systems. McAlister's installed the system in August.
The system increases accuracy and speed of service while tracking customer orders. When guests place orders, they are given an "order key" and a timer starts. Once guests select their seats, they insert the key into the key call unit at their table. This sends a signal to the monitor in the kitchen, showing where the guest is waiting. When the order is ready, a runner can quickly locate where to deliver the food. After the food has been served, the runner collects the key to stop the clock. This system not only eliminates confusion but also helps ensure that the food is delivered quickly, maintaining the food's proper temperature.
"It is working," Walls said. "I like it because now we finally have a way to track ticket times."
He also praised the system's flexibility. If an individual order exceeds a predetermined time limit, that order begins flashing on the monitor. Restaurants can customize the time at which it begins flashing. Another up and coming piece of technology, perhaps more for the quick-service industry, is the digital menu system. Burger King installed a digital menu board in 300 of its Germany stores.
"Guess what? It worked," said Jeff Porter, executive vice president of Scala Inc. "Average revenue shot up and the cost to deploy the system? A lot less than replacing all the menu boards with screens. Burn-in was not an issue here, since there was no static imagery on the screen."
XM Satellite Radio, the nation's leading satellite radio provider, and Starbucks launched a new proprietary series of multi-artist music compilation CDs.
Co-produced by XM and Hear Music, the debut CD in the series, Hear Music XM Radio Sessions, Vol. 1, features newly recorded, never-before-heard tracks from both established and emerging artists. The CD became available in August and includes such artists as Tracy Chapman, Jewel and Jason Mraz.
A time for change
Dec. 20: Rubio's Restaurants Inc. announced that Sheri Miksa resigned her position as president, CEO and director of the company.
Dec. 12: Fresh City launched the "Know Your Food" nutritional program.
Dec. 5: Smokey Bones Barbeque & Grill introduced seven new menu items that revolve around open-fire grilling.
Nov. 29: Applebee's Neighborhood Grill & Bar added eight new items – including two panini sandwiches and a new Weight Watchers entree – to its menu.
Nov. 21: Kahala Corp. announced a new area representative agreement with Shaun Khan, an entrepreneur from Orlando, Fla., to open 10 Surf City Squeeze smoothie stores on all of the Hawaiian Islands within the next five years.
Nov. 8: Coco's Bakery Restaurant announced a partnership with Warner Home Video to promote the Nov. 22 release of The Polar Express DVD.
Oct. 28: Freebirds World Burrito opened its first restaurant in San Antonio -- its 13th location in Texas.
Oct. 14: Barona Valley Ranch Resort & Casino, a luxury gaming destination in Southern California, announced the grand opening of Rubio's Fresh Mexican Grill. Rubio's has joined the award-winning resort's collection of restaurants, marking its first foray into a casino resort.
Oct. 12: Chef Masaharu Morimoto, star of the Food Network's "Iron Chef" and owner of the chic Morimoto Restaurant in Philadelphia, teamed with successful entrepreneurs and restaurateurs Paul Ardaji Sr. and Paul Ardaji Jr. to create a different type of Asian Bistro concept. The first Pauli Moto's Asian Bistro was slated for an October opening at Tysons Corner Center in McLean, Va.
Oct. 10: Bennigan's Grill & Tavern redesigned their menu with a newer, contemporary look, which included a more modern take on food photography.
Oct. 6: Soup Kitchen International Inc. and The Original SoupMan announced Pepsi as the exclusive beverage supplier for all their franchise locations.
Oct. 5: Let's Dish signed a seven-store development agreement with Marco Meal Solutions, expanding its presence in the Midwest.
Oct. 4: Brinker International announced it reached a definitive asset purchase agreement for the sale of its Corner Bakery Cafe brand to CBC Restaurant Corp. for an undisclosed price.
Oct. 4: Restaurants Unlimited Inc. chose EatecNetX's Web-centric software solution for implementation.
Sept. 26: Ker's WingHouse appointed Scott Steinard as the new COO of the 18-store chain.
Sept. 13: Toastissimo opened its first U.S. location. The Orlando Café is the first of 300 proposed to open in the U.S. over the next five years.
Sept. 13: Red Robin Gourmet Burgers introduced a new chili-focused menu to attract consumers in the cooler fall season.
Aug. 30: Einstein Bros. Bagels opened in two airports, Dallas-Ft. Worth International Airport and Minneapolis-St. Paul International Airport.
Aug. 16: Martin Mayer joined Chick-N-Grill as vice president of operations.
Feb. 7: Bear Rock Café launched its new 3,392 square-foot design, called the mountain cafe in Charlotte, N.C.
Feb. 1: Lawry's Restaurants Inc., two years after opening its first fast-casual restaurant, planned to expand the Lawry's Carvery concept to meet high customer expectations and soaring food costs.
Jan. 20: TGI Friday's changed its look. Gone is the "brown bar" look, with dark wood replaced by stainless steel and glass. Outdoor signs were updated and natural light streams in through large windows. The menu features new salads, fish and steak platters, along with old favorites and highly successful Atkins meals.
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