Post-recession consumers might be more cautious with their money than they used to be, but operators are finding that they’ll spend a little more for premium products and special experiences.
Even frugal customers, who may be scrimping on other items, are often willing to splurge on little extras that help turn a meal into an event — a few truffle shavings, an extra glass of wine, an exotic ingredient.
Global financial services firm Rabobank recently described this phenomenon as acts of the “hybrid consumer,” who scrimps on basic items and splurges on goods and services deemed to be worth it.
“Constraints on disposable income and falling consumer confidence has encouraged trading down on basic items,” the firm said. “At the same time, consumers still want to occasionally indulge themselves, even in times of economic hardship, and are willing to pay a bit extra for premium quality.”
Demand for little luxuries has been evident in all segments of the industry. Orlando, Fla.-based Darden Restaurants Inc. has seen it with the success of chains in its upscale Specialty Restaurant Group, such as The Capital Grille and Yard House, while its more mainstream chains, like Red Lobster and Olive Garden, have struggled.
Even inexpensive items can do the trick if they represent a special treat that’s a cut above the alternative, as with Taco Bell’s Doritos Locos Tacos — priced higher than the quick-service chain’s standard taco — or McDonald’s upgraded McCafé coffee line, both of which have proved popular.
Operators said a little extra focus on preparation, presentation and promotion is key to engaging customers and unleashing their desire to spend a little more.
In fact, some are even willing to spend a lot more, said Josiah Citrin, chef-owner of Mélisse in Santa Monica, Calif., who this summer is getting his customers to spend $50 to $100 extra to have a few grams of Australian truffles shaved onto their food.
“They want to spend the money,” he said. “They want to have it.”
Truffles ripen in the winter, but since Australian winter is during the northern hemisphere’s spring and summer, Citrin can add the truffles to warm-weather dishes such as sweet-corn agnolotti or top neck clam with wild radish pods, cucumber and cherry blossom.
Mélisse’s fixed-price menu starts at $125 per person, and in truffle season servers might suggest that guests share a plate of pasta with truffles for $100 more.
“I think the biggest thing for getting people interested is getting the captain and the waiter happy and excited about it,” said Citrin, who keeps his truffles in the restaurant’s humidor and has his front-of-the-house staff bring them to tables for people to see and smell — playing them up as a luxury.
Citrin said the key is to concentrate on giving the guests a great experience.
“You treat the guests so well that they want to enhance the experience,” he said. “They want the extra glass of Champagne. They want to feel like kings and queens. They want to feel like it’s the best night of their lives.”
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David Santos, executive chef of Louro in New York, saw the allure of luxury items when he started offering special themed dinners on Mondays to lure customers on a typically slow night.
He created a menu of dishes inspired by characters from the HBO series “Game of Thrones” and another featuring hangover cures from around the world in celebration of the release of the movie “The Hangover Part III.” Both of those six-course dinners were $55 per person.
But it was the dinners featuring luxury items that drew the biggest crowds.
“The uni [sea urchin] dinner sold out so fast we had to add a second day,” Santos said.
The six-course, $75 dinner included pasta with uni; soft scrambled ostrich egg with spring garlic confit and uni foam; uni and fluke crudo; roasted skate wing with uni butter and uni stuffing, inspired by Thanksgiving oyster stuffing; and crispy pork belly with uni and Portuguese kimchi rice.
He also held a truffle dinner for $125, which included classic white-truffle risotto, celery root stew with black truffles and scallop crudo with white truffles.
Santos said that despite the high price tags for these dinners, his guests saw them as good values.
“There’s a lot of uni dishes that cost $24 to $30,” he said, which makes the $75 price tag seem reasonable. At the same time, Santos could profit from them by balancing the luxury items with inexpensive ingredients like pasta.
“It’s always a higher food cost, but we’re OK with that,” he said. “We want people to come and enjoy it.”
And as Citrin pointed out, selling $50 worth of truffles for $100 might look unattractive because of its 50-percent food cost, but it’s still a $50 profit.
Santos agreed that showmanship helps. The final savory course for his truffle dinner was served in two parts. First, a poussin breast with whipped potatoes and shaved white truffles was served. Then, a confit leg in black-truffle ragù topped with black-truffle potato foam was brought out five minutes later.
“It was a big surprise for people,” he said.
Premiumization on a smaller scale has worked for Tres Carnes, a single-unit fast-casual restaurant that recently opened in New York, featuring Tex-Mex-style smoked meats served in tacos, burritos or bowls.
Smoked pork shoulder or chicken items are sold for $8.04, and smoked brisket is $8.73.
Selling for closer to $10 is the “weekly smoke,” which has included bone-in leg of lamb smoked for 14 hours, venison sausage and whole hog. Executive chef Sasha Shor was recently working on wild boar and alligator preparations.
She said the premium items benefit from being promoted through social media and in-store signage.
“We want to up the game of these gamy, wild meats, and it’s an opportunity to work with local farmers to source some of these things,” she said.
Shor also develops a special burrito for each new meat. For the lamb the burrito had a smoky chile mayonnaise. The venison sausage was sliced and served with roasted jalapeños and an optional habañero vinegar. The whole-hog burrito had a chipotle-lime glaze that also was used to season the hog.
The composed burritos sell for a $2 premium.
“It gives [customers] the opportunity to try something they wouldn’t normally order, but in a more familiar format,” she said. “They’re going really well.”