The economic doldrums have taken their toll on many Americans, but there are still people with money to spend — and a growing group of more upscale casual restaurants is chasing after them.
Known as polished casual, these restaurants veer toward fine dining, with higher-end atmospheres, service and fare, but are decidedly more casual in their pricing, with average checks that fall between $30 and $50. That number can move well beyond $80 for fine dining.
Some of the newer concepts in the growing cadre include Cooper’s Hawk Winery & Restaurant, a 12-unit chain based in Countryside, Ill.; Crave, an eight-unit chain out of Bloomington, Minn.; and Burtons Grill, a 10-unit chain from Andover, Mass.
Meanwhile, higher-end brands like Del Frisco’s Double Eagle Steak House and Shula’s Steak House have given birth to more casual entrants like Del Frisco’s Grille and Shula’s 347 Grill, respectively. And those brands fortunate enough to already inhabit the category, such as Bonefish Grill and Houston’s/Hillstone, continue to reap the rewards.
“Upscale consumers are looking for a solid experience, something they can’t get anywhere else,” said David Henkes, vice president of Technomic Inc., a Chicago-based research firm.
For this reason, brands that cater to consumers making more than $100,000 annually — about 20 percent of U.S. households, according to the U.S. Census Bureau — are doing comparatively well.
In the most recent quarter, the higher-end Del Frisco’s Restaurant Group and Ruth’s Chris Steak House have enjoyed same-store-sales growth in the 5-percent to 6-percent range. That compares to growth of 2.5 percent at lower-end Applebee’s and 2.2 percent at Chili’s Grill & Bar, Henkes said.
Heightened business travel is helping higher-end players, too. Corporate-card spending is expected to reach $170 billion in 2012 — surpassing its previous high mark of $157 million in 2007, according to the 2011 Corporate Travel Card Benchmark Survey. Such spending is projected to reach $186 billion by 2015.
Refined experiences
The key in the polished- casual segment is competing on the experience rather than the price, Henkes said.
Because polished-casual operators are offering many of the trappings of fine dining without the excessive price tags, an increasing number of high-end concepts are “trying to casualize themselves. They’re trying to appeal to a larger set of customers,” Henkes said.
For instance, Ruth’s Chris earlier this year introduced its Sizzle, Swizzle & Swirl happy hour program, featuring food and drink items for $7 each. Parent company Ruth’s Hospitality Group Inc. credited that program with the chain’s 5.9- percent increase in same-store sales in its most recent quarter.
Bonnie Riggs, restaurant analyst for consumer research firm The NPD Group, agreed that upscale customers aren’t necessarily looking for traditional upscale experiences.
Although the number of visits to fine-dining restaurants has increased by 4 percent over the past year, that figure has yet to return to pre-2008 levels, she said. And growth is not coming from people going out for $150-per-person meals, but from those enjoying the broader array of occasions that high-end restaurants are making available.
“They’re making it a lot more focused on bar food and socializing and the entertainment aspect, with chefs cooking on-site,” she said.
Fine-dining operators also are rolling out their own polished-casual concepts.
Southlake, Texas-based Del Frisco’s Restaurant Group opened its first Del Frisco’s Grille in New York in August 2011. The average check is $53 per person, which compares to $110 per person at Del Frisco’s Double Eagle Steak House. The grill has “very strong bar sales,” accounting for around 36 percent or 37 percent of total sales, according to chief executive Mark Mednansky.
Alcohol sales help to push up the average check, Mednansky said, noting that Cheesesteak Eggrolls are $11, and Ahi Tacos are $13, but the 400 to 500 wine selections, which account for between 45 percent and 50 percent of all bar sales, range from $30 to $1,000 per bottle.
The concept strives to have local appeal by regionalizing the menu and bar, with local wines and craft beers, as well as favorite ingredients on flatbreads, such as chorizo in Phoenix and jumbo lump crab in Washington, D.C.
All in all, about 40 percent of the menu is adapted for each location, said Mednansky, who has found that the restaurants also can be testing grounds for items that might later make it to the steakhouse menus.
While Del Frisco’s Double Eagle and its sister, Sullivan’s Steakhouse, are designed to attract people with expense accounts, Del Frisco’s Grille is less dressy, offers faster service and is priced for customers who are spending their own money. The grill is also intended to draw customers from Generation X and Millennials who might not be familiar with the steakhouses.
The fifth Del Frisco’s Grille opened recently in Atlanta and, like the other four locations, is exceeding initial projections, according to Mednansky, who said he believes the concept appeals to customers who want to indulge in a way that fits with their lifestyles.
“I think people want to treat themselves,” he said. “Money’s important, but time is precious.”
Del Frisco’s Grille targets customers looking for a great experience who might also eat at restaurants such as P.F. Chang’s China Bistro, Houston’s or independent eateries, Mednansky said.
“If they want a burger, they’ll spend $10, $12, if they know they’re going to get a great burger and a great experience,” he said.
Technomic’s Henkes agrees, noting: “Value isn’t necessarily price. It’s what you’re getting for the price you’re paying.”
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Social engagement
James Brennan called the experience he offers “social dining.” He operates six restaurants focused on such dining with business partner and celebrity chef Brian Malarkey, who participated in season three of “Top Chef.”
Their Enlightened Hospitality Group runs Searsucker — spelled with an “e” and an “a” instead of two “e”s, in Malarkey’s nod to the ocean — as well as the Burlap, Gingham, Gabardine and Herringbone restaurants in San Diego. They also operate a Searsucker in Scottsdale, Ariz., which opened in October.
“We have really focused on the whole experience as far as a night out goes,” Brennan said. “People come in for cocktails, laughter, conversation, engagement, dinner; then move to another room for more conversation, maybe dancing; and then call it a night.”
Those guests spend an average of $55 per person at Brennan’s restaurants, of which slightly more than half, or 56 percent, goes toward food — except on Saturday, when the food-to-drink mix is 50-50.
Brennan called his restaurants a product of the economic “reset” of 2008.
“People have a certain amount set aside for [going out], whether it be a night on the town or two nights on the town,” he said.
They’re not looking for special-occasion “table for two” places, but for venues that are engaging and fun, he added.
Providing a one-stop shop of socializing, food and drink has helped his restaurants, which are named after different types of fabric, achieve success, he said. He has plans to have five Herringbone locations in top-tier markets and 10 Searsucker units in secondary markets within the next five years.
Brennan said those restaurants are his growth vehicles. The smaller Gabardine and Gingham concepts, with 80 seats and 105 seats, respectively, are located in slower-paced, neighborhood environments. They have been designated as training grounds for Searsucker and Herringbone, which have about 220 seats each.
Burlap, an “Asian cowboy” themed restaurant, is going to remain specific to the San Diego market, Brennan said.
All of the restaurants share these characteristics:
• Large open kitchens.
“In this day and age with celebrity chefs, the kitchen is a stage,” Brennan said. “It’s there for people to watch and enjoy and see the action, and it really is an entertaining part of the dining experience.”
• A kitchen at one end of the restaurant and a bar at the other end.
“We create this blended, social kind of lounge area that bleeds into the bar area,” Brennan said. People eat, drink and socialize in that space.
• A menu meant to engage diners by encouraging questions and allowing servers to be involved with the table.
Searsucker, for example, has menu items such as the Tongue & Cheek “Yes” and No Shishito “Schoos” Peppers. Herringbone offers Monkfish Osso Buco and Duck & Wild Mushroom Poutine.
• Specialty cocktails, such as the Peter Rabbit at Searsucker, which is essentially a Pimm’s Cup with a carrot garnish.
• Distinctive music. In the case of Brennan’s restaurants, each features music in the Balearic Beat style that evolved on Ibiza in the 1980s. The music is curated by DJs who help to evolve the mood at each restaurant over the course of the evening.
Shula’s 347 Grill is another polished-casual concept scoring with customers.
Named for the number of career victories captured by legendary professional football coach Don Shula, Shula’s 347 Grill is a more casual version of Shula’s Steak House. The 10-unit chain features salads, sandwiches, pasta, fish and steak, and such bar food as truffle fries, boneless chicken bites, chicken empanadas, meatballs and paninis.
The first Shula’s 347 Grill opened in 2004. Each unit offers a chic and energetic environment and is decorated with photos of local sports stars and other legends as well as city landmarks. The bar offers an array of signature Martinis, Margaritas and Mojitos.
Each location seats 100 people on average and serves a demographic ranging from 30-somethings to baby boomers, mostly with annual incomes of $80,000 or higher, according to a company spokeswoman. The average check is $40.
“347 is popular among the business-traveler segment. It’s a concept with an atmosphere as the place to see and be seen,” she said.
Moving up
Even as fine-dining restaurants unveil more casual offshoots, some casual restaurants are giving themselves upscale makeovers.
Ruby Tuesday in the mid-aughts undertook an effort to distance itself from grill-and-bar competitors by upgrading its decor and menu offerings. While those efforts have been slower to bear fruit for the 790-unit Maryville, Tenn.-based chain, others have more quickly benefited from their upward repositioning.
That’s what Sal Lupoli did. Lupoli, the founder of the 44-unit quick-service chain Sal’s Pizza in Salem, N.H., in 2004 opened his first Salvatore’s, which he said is a fine-dining experience in a family atmosphere with family pricing.
Average checks fall between $28 to $33, and units range in size from 80 to 130 seats. Sales increased steadily even during the recession, said Lupoli, who is preparing to open his fifth Salvatore’s location in Andover, Mass.
The menu is traditional red-sauce Italian, offering meatballs, fried calamari, pizza, caprese salad and veal Parmesan, along with regional dishes such as haddock with garlic, capers and olives, and a Gorgonzola burger.
Like other polished-casual chains, the restaurants are modified to appeal to local markets.
“It’s very trendy where the atmosphere calls for it,” as in downtown Boston, Lupoli said. “You can feel the pulse; you can feel the vibe when you walk in.”
Meanwhile, in the blue-collar suburb of Medford, Mass., the atmosphere is more family oriented.
“We want you to trust us the way you trust your barber,” Lupoli said. “We want to be part of the fabric of your life. We want everyone to know your name when you walk in.”
Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @FoodWriterDiary.