CALABASAS HILLS Calif. Amid negative same-store sales and double-digit drops in profit, The Cheesecake Factory Inc. said this week it would introduce a new value-focused menu, just in time to drive holiday traffic.
Acompany executive did not provide many details on the new offering, which is an add-on to the chain’s well-known, 200-item-plus menu, except to say that it includes dishes at “moderately lower price points” and had been “measurably successful in the initial group of restaurants” that tested the offering.
“A number of the items are No. 1 in their respective categories already,” said Matthew Clark, the company’s vice president of strategic planning, who was speaking at the Morgan Stanley Global Consumer & Retail Conference. “We have even seen a slight benefit in the overall guest check despite the lower price point items on the special menu.”
The Cheesecake Factory typically tallies an average check around $18, he said, along with average unit volumes that lead the casual-dining sector at nearly $10 million.
Many restaurant chains have been courting tight-fisted consumers with lower prices and special offers as the industry continues to face declining traffic. The holiday season, which is typically a boon for restaurants, is expected to be lackluster this year because of the continued deterioration in the economy. Many retailers have said they expect reduced sales this holiday season as consumers stay home or spend less.
“No doubt the economy has created a challenging year for casual dining ... We do recognize the need to be proactive in stimulating sales,” Clark said.
In addition to the special value menu, the casual-dining chain of about 144 restaurants will focus on its new delivery and catering strategies as well as new marketing efforts to boost incremental sales. A new guest card program that offers such incentives as $10 off or a free slice of cheesecake on a following visit already has gained traction, Clark said, with about a 5-percent redemption rate in a short timeframe.
Cheesecake Factory also said it would look to raise menu prices with its winter menu change, which typically occurs in January or February. The chain’s menu prices already are about 2.5-percent above year-ago levels.
“While we always take into consideration the state of the consumer when implementing price increases, we also clearly recognize the need for continued menu price increases to protect our margins going forward,” Clark said.
The Cheesecake Factory also operates the 13-unit Grand Lux Cafe chain and one RockSugar Pan Asian Kitchen.