Growing numbers of restaurants are dishing up ample helpings of all-you-can-eat promotions to lure consumers whose appetites might be suppressed by the historic gloom and doom emanating from Wall Street and the nation’s housing and jobs markets.
While such deals are most pronounced and heavily marketed in the troubled casual-dining sector, even quick-service and family-dining operators now are touting “endless,” “bottomless” and “never-ending” food portions.
Practitioners insist that the all-you-want marketing messages are not signs of desperation and that unlimited servings of key comestibles can be cost-effective, despite giveaway gaffes that previously hurt prominent restaurant brands. Regardless, industry analysts say such appeals to gluttony may be necessary in the current economic climate.
“You need value messages to bring traffic in the door,” said New York-based foodservice economist and market researcher Malcolm M. Knapp. “Once [customers] are in the door, they often go back to what they really want to eat anyway.”
All-you-can-eat promotions help give a public beleaguered by roiling financial markets and high gasoline prices a reason to dine out, veteran restaurant executives contend.
As Douglas Brooks, chairman and chief executive of Brinker International Inc., recently stated in a conference call with investors, there has to be “a reason for consumers to come out of their hole.”
Indeed, the restaurant landscape suddenly is dotted with numerous appeals to hearty eaters on a budget.
Applebee’s, the division of DineEquity Inc. of Glendale Calif., recently featured “Endless Favorites,” including such $9.99, all-you-can-eat entrées as chicken tenders, barbecue riblets and panko-crusted shrimp. The promotion was Applebee’s first such offering in several years.
Chili’s Grill & Bar, the flagship of Dallas-based Brinker, recently rolled out a “Bottomless Express Lunch” with unlimited soup, salad, chips and salsa for $5.99.
The Olive Garden division of Darden Restaurants Inc. long has offered such a value message, Knapp said.
“Olive Garden was really the leader in this in casual dining, with its unlimited soup, salad and bread-sticks,” Knapp said, “but others have offered specific promotions.”
This year, 582-unit Olive Garden launched its annual Never-Ending Pasta Bowl promotion two weeks earlier than usual. The $8.95 promotion ran from Aug. 28 to Oct 15.
“There is plenty of pricing power there, but it is still a huge bargain,” Knapp said while noting that Olive Garden was able to up-sell $1.95 additions of grilled chicken or sausage.
Through Nov. 10, Darden-owned sister chain www.redlobster.com Red Lobster will be offering its “Endless Shrimp” for about $15.99.
Such promotions can go awry. In 2003, Red Lobster suffered a badly timed “Endless Crab” promotion that occurred just as crab prices were skyrocketing. The margin losses were magnified, and pundits attributed leadership changes at the chain to the crab calamity.
Nonetheless, Darden continues to find that such promotions work.
Andrew H. Madsen, the company’s president and chief operating officer, told investors in September that Darden is considering expanding the all-you-can-eat concept to LongHorn Steakhouse.
“I wouldn’t rule out a value-oriented promotion in the future,” he said, “not unlike an endless-shrimp promotion that Red Lobster does, which doesn’t happen to be price-pointed, but we are going to continue working on ideas for that, versus just a straight discount.”
The 1,370-unit IHOP chain, also a DineEquity subsidiary, on Oct. 13 began offering all-you-can-eat pancakes daylong as part of a promotion called “Trick or Treat All-You-Can-Eat.”
Available through Oct. 31, the pancakes came either à la carte or as part of a $4.99 combo including eggs, hash browns and a choice of breakfast meats.
Some quick-service restaurants also gave away food promotionally this past summer, though not in unlimited quantities. The 29-unit Quaker Steak & Lube chain, based in Sharon, Pa., offered free side items such as baked beans, fries, cole slaw or chips through August. Sister chains Hardee’s and Carl’s Jr. could be expected to benefit amid the current psychological stresses on consumers by dint of those brands’ traditional “all-you-want” self-service beverage fountains.
Experts say all-you-can-eat promotions can be priced to cover costs, and “troughbrau” consumers are actually fairly rare.
However, unlimited offerings need to be supported by appropriate marketing programs, Knapp stressed.
“Advertising, particularly TV advertising, is very crucial,” he said. “When you stop it, you see sales go down. People now really need a reason to go out, and they are not spending a lot of time remembering what you told them. You have to tell them right now.”
The all-you-can-eat option has been helpful in bucking casual dining’s slipping lunch trend. Charles M. Sonsteby, chief financial officer and executive vice president of Brinker International, said in a recent conference call that the Bottomless Express Lunch at Chili’s has helped counter the softness in that daypart.
Brooks of Brinker said: “I think when the consumer is pressed as hard as they are right now, we’ve already seen some folks come out with some price points, all-you-can-eat sort of limited promotional things. And I guess, as always, we want to kind of balance the short term and long term.”
Brinker’s On The Border Mexican Grill & Cantina chain “ran the Endless Enchiladas during part of last year,” Brooks pointed out.
He said it has been apparent that “everybody is trying to get the guests’ attention with a low price. I guess in the grocery stores they might call it a loss-leader to get people to show up and then hopefully sell them something different.”