PORTLAND Ore. Connecting with guests to improve what McCormick & Schmick’s Seafood Restaurants calls its “price-value experience rating” will be a top priority for the upscale chain as it attempts to turn around rapidly declining traffic.
On Thursday, the Portland, Ore.-based McCormick & Schmick’s Seafood Restaurants Inc. reported a 13.5-percent drop in same-store sales for the fourth quarter ended Dec. 27, despite a 2.6-percent menu price increase and a 1.4-percent benefit from changes in product mix.
The company, which owns 94 restaurants, reported a net loss of $73.4 million, or $4.99 per share, compared with a loss of $1 million, or 7 cents per share, in the same quarter a year earlier. Revenues for the latest quarter fell 0.7 percent to $98.8 million. The negative sales trends were blamed partly on bad weather in the Pacific Northwest and lower-than-expected banquet activity, the company said.
William Freeman, formerly the founder and chief executive of the Fox Sports Grill chain who joined McCormick & Schmick’s as president and chief executive in January, said the casual-dining chain has suffered the same trends as other restaurants as consumers dine out less and hold tight to their wallets.
“As we begin the new year, we are focused on revenue building initiatives,” he said, “driving guest frequency through our loyalty program, greater connectivity to our guests through improved four-wall execution, and continuing to improve the ‘price-value experience’ rating by our guests.”
New initiatives will include building the customer-loyalty program, which now includes about 65,000 members, Freeman said. In addition, new programs for store-level managers will enable them to better connect with customers, though he did not offer specifics. Some locations will install more comfortable patio areas to encourage guest socializing.
Cost-cutting also will be a priority this year, Freeman noted, with a focus on reducing food and labor costs. The company has frozen salaries, reduced travel costs and reassessed benefits, in some cases reducing head counts in some stores, though mostly by attrition.
For the full year, same-store sales were down 7.5 percent and company officials said they expect sales to stay negative through fiscal 2009. The company reported a net loss for the year of $69.6 million, compared to a profit of $8.8 million in fiscal 2007.
McCormick & Schmick’s last year redesigned its menu to more prominently feature value-oriented items, including eight to 12 items that range in price between $7.95 and $13.95 each. Those items now account for about 5 percent of sales, the company said. In addition, the chain’s recently added steak offerings have helped eliminate veto votes from consumers who don’t enjoy seafood. The steaks now account for about 17 percent of sales, officials noted.
McCormick & Schmick’s already has opened the only planned new locations this year, in St. Louis and Roseville, Calif. In 2008, the chain added 11 new domestic stores.
Contact Lisa Jennings at [email protected].
