Restaurants cater to new tastes, shrinking wallets

Jun 28 2011 - 10:44am


Frank Gazella, Jr., left, and Andrew Misak, co-owners of Pieroguys Pierogies, work on packaging pierogies for delivery at their City Market shop in Kansas City, Missouri onThursday, December 2, 2011. (Allison Long/Kansas City Star/MCT)
Frank Gazella Jr. is co-founder of Pieroguys Pierogies at the City Market in Kansas City, Missouri. The business, a wholesale pierogies manufacturer, has opened a cafe and is now selling it's own pieroguy sauces in bottles. (David Pulliam/Kansas City Star/MCT)
Frank Gazella, Jr., left, and Andrew Misak, co-owners of Pieroguys Pierogies, work on packaging pierogies for delivery at their City Market shop in Kansas City, Missouri onThursday, December 2, 2011. (Allison Long/Kansas City Star/MCT)
Frank Gazella Jr. is co-founder of Pieroguys Pierogies at the City Market in Kansas City, Missouri. The business, a wholesale pierogies manufacturer, has opened a cafe and is now selling it's own pieroguy sauces in bottles. (David Pulliam/Kansas City Star/MCT)

Happy days may or may not be here again, but happy hours and other promotions are.

As a result, restaurants are bustling with late-night customers. And they aren't coming in just to chow down on discounted drinks and eats.

Depending on what night you drop into the Gladstone, Mo., Applebee's Neighborhood Grill and Bar, you might find customers trying to empty a tissue box with one hand in one minute -- the restaurant's version of the TV show "Minute to Win It." Or they might be playing extreme bingo, family feud, water pong or even bar trivia.

It's all part of the restaurant's new late-night happy hour offerings.

"It's doing quite well as more customers hear about it," said Steven Swift, general manager of the restaurant. "We're nestled in a neighborhood, and they come in to see, 'What are they doing tonight?' We've had swim teams, football teams, softball teams, lots of couples and -- should I say this? -- church groups."

As the restaurant industry slowly recovers from two years of traffic declines, operators are rolling out more and more options to keep the momentum going. There's more emphasis on nontraditional "day-parts," such as late-night happy hours or midafternoon snack times; an increase in daily deal offerings such as Groupon; new menu items such as chicken at breakfast or eggs at lunch and dinner; branded products; and even smaller, more cost-efficient formats.

"We're seeing a lot of downsizing, a casualization of fine dining, more entertainment and promotions on the weekdays. Along with that there's been a lot of focus put on bar food," said Bonnie Riggs, restaurant industry analyst for The NPD Group, a market research firm. "Which serves a lot of purposes in terms of giving consumers more choices -- smaller portions, small prices and also an opportunity for the operator to move a lot of high-profit-margin alcoholic beverages."

For the year ending February 2011, total industry traffic was flat, compared with a 3 percent decline for the same period a year ago. A report by NPD Group forecasts growth of less than 1 percent a year through 2019. So if the market isn't growing -- or isn't growing by much -- restaurants have to be even more competitive and creative.

Or maybe not so creative, sometimes taking a "me, too" attitude, Riggs said. If my competition is doing it, so must I, they reason.

Take late-night happy hours.

Some people aren't ready to call it a night after being at a sporting event or movie. Or maybe it's just too hot to get out earlier in the evening.

Houlihan's long has offered a late-night version of the traditional after-work happy hour, but it really took off a couple of years ago when the national chain began offering special prices on food as well as drinks.

Now Hannah Oberkrom and Shaun Lane have made Houlihan's happy hour a Wednesday night routine.

They stake out a place at the Fairway, Kan., bar, sometimes at the tail end of the after-work happy hour. Then they chat and check their smartphones until the late-night happy hour starts at 9 p.m., when they order their favorite Long Island iced tea pitchers and appetizer specials.

"It's fun, and you get a lot for a little price," Oberkrom said.

Other restaurant chains have taken note of this late-night boost.

From 9 p.m. to close, the Gladstone Applebee's now offers games along with special food and drink prices -- such as Monday night's Family Feud with $5 Rolling Rock beer pitchers and $5 burgers. About 80 percent of Applebee's 2,000 locations offer the late-night menu, and nearly all are open until midnight or later every day.

"People think casual dining operations close at 10 p.m. The goal is to let people know we are here, we are open, and it's a fun place to be," said Swift, of the Gladstone Applebee's.

McCormick & Schmick's Seafood Restaurant in Kansas City also recently introduced a late-night happy hour. From 9 p.m. to closing time on Sundays through Thursdays, it offers $1 oysters and $2 off small plates and raw-bar seafood items, all served on its newly remodeled outdoor patio. Its full menu also is available. If the promotion takes off, the restaurant plans to extend the late-night happy hour to the indoor bar area year-round.

Two weeks ago, the local Red Robin Gourmet Burgers franchise began offering late-night happy hours at its Liberty, Mo., and Independence, Mo., locations, one of the first franchises in the chain to do so. So from 8 p.m. to closing time (and from 3 to 6 p.m.), appetizers start at $3, and draft beers at $2.50.

"We're really busy from 6 to 8 p.m., and then it drops off. We are looking at ways to bring the bar business back, the 25- to 30-year-olds who want a burger and beer," said Pat Khoury, regional manager for PB&J Restaurants, the area franchise for Red Robin. "We don't seat children in the bar area anymore, so we can have the bar business and keep the family atmosphere in the restaurant."

One caveat for Kansas restaurants and bars: State regulations prohibit them from offering happy "hour" drink specials. If drinks are discounted then, the discount has to run all day. Some Kansas operations, such as Houlihan's, do extend drink specials through the day and offer food specials during specific hours. Missouri doesn't have such restrictions.

Karen Housewright, director of field operations for Mothers Against Drunk Driving, said the organization opposed any practices that encouraged "excessive" drinking and hoped businesses offering late-night happy hours would have precautions in place to make sure patrons get home safely, such as encouraging designated-driver programs.

Now that late-night happy hours are taking off, other operations are seeing new "day-part" opportunities.

Story, a new upscale restaurant in Prairie Village, offers a special menu between lunch and dinner, 2 to 5 p.m. daily. The current midday menu includes house-made bread, smoked duck empanadas, beef tartar, and fried meatballs made with roasted mole sauce (gourmet meatballs being another trend).

"We want to be accessible to the neighborhood," said chef and co-owner Carl Thorne-Thomsen. "This is a place they can hang out in the afternoon."

But there are other ingredients that could get the restaurant industry cooking again. Also on the menu:

--Value, beyond low prices. Three-fourths of people surveyed by NPD Group are described as "cautious consumers" -- especially skewed toward the unemployed, less affluent and retirees. They said they were reducing their restaurant visits, trading down and ordering fewer items. They are more concerned with price and value. About 24 percent of those surveyed -- and those more likely to be employed and live in affluent households -- said the recession hadn't really affected them, so they were less inclined to moderate their restaurant spending. They are more concerned about service and a relaxing atmosphere.

--New menu items. "Sustainable," "healthy" and "low-fat" are still buzz words, but restaurants also are whetting appetites with new trends. They're upping low-brow foods such as meatballs with higher-quality ingredients and sauces, and turning around our ideas of what we should eat when.

Eggs are not just for breakfast anymore. In Kansas City, the new Martin City Brewing Co. has a braised brisket sandwich with egg over easy, and the new Genessee Royale Bistro a fried egg and country ham biscuit, along with a buttermilk biscuit, fried chicken and sunny-side-up egg with gravy sandwich for lunch.

"I didn't want people to miss out on an opportunity to have breakfast later in the day," said Todd Schulte, owner of Genessee Royale.

Or how about lunch and dinner at breakfast? Just down the street from the Genessee Royale, Wendy's offers a honey butter chicken biscuit until 10:30 a.m.

Capital Grille has a new bar menu featuring small bites for sharing and signature cocktails -- including grilled shrimp for $9 and cheeseburger and truffle fries for $18. It also has new lunch specials, a choice of soup or salad, sandwich and a side for $18.

--Small-size it. With fewer new shopping centers being built in the post-recession, restaurants have to look elsewhere to expand, and smaller formats give them more flexibility. They also are cheaper to build.

Red Robin plans to test about a half dozen smaller-size operations -- 2,000 to 4,000 square feet compared with its traditional 5,600-square-foot restaurants. Kevin Caulfield, spokesman for Red Robin, said the smaller restaurants could go in airports, near college campuses and in urban areas where space is at a premium. The first smaller prototype is to open in Denver this year.

Cheesecake Factory builds restaurants in a variety of sizes, including 8,000, 10,000 and 12,000 square feet, as well as a new 7,200-square-foot unit that is opening this year. The company said it fits its restaurant size to each market and the specifics of its site.


In counterpoint to what's working to draw customers, a recent Zagat survey listed "The 10 Most Annoying Restaurant Trends." Some samples:

--Communal tables: They're great for the single diner who's looking to make "friends," but if you start talking to the person next to you at a communal table, you're probably interrupting a date or butting your nosy self into someone else's business.

--Chalkboard menus: We kind of got over reading off a chalkboard in preschool. After a long day of staring at a computer screen, the last thing we're trying to do is have to squint at a barely legible menu scribbled on a wall halfway across the room.

--Mustached bartenders: We're not knocking all facial hair, but we don't need Wyatt Earp mixing up our martini.

(c) 2011, The Kansas City Star.

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