Jeffrey D. Warne was named president and chief executive of Nashville, Tenn.-based O’Charley’s Inc. in early June. Most recently president of the company’s O’Charley’s chain, Warne has his work cut out for him leading the parent company of 372 casual-dining restaurants under the O’Charley’s, Stoney River Legendary Steaks and Ninety Nine Restaurants brands. As with many casual-dining players, the recession has caused a steep decline in guest traffic, forcing O’Charley’s to cut costs and revamp operations. For the first quarter ended April 19, O’Charley’s reported a 31-percent slide in profit. Same-store sales fell 2.9 percent at O’Charley’s corporate stores, 4.5 percent at Ninety Nine Restaurants and 17.2 percent at Stoney River.
What is your vision for O’Charley’s?
For each brand, given the upheaval in the economy, we have to recalibrate how all of our concepts are perceived in the minds of our guests. The first order of business is to get a firm read on our brand positioning. We’ve launched massive research projects on guest perception and awareness of all our concepts.
What have you learned so far?
The good news is our guests have very favorable impressions of, literally, all three brands. The bad news is they’re not specific about what the drivers are, so we will just have to make it clearer in our messaging as to what makes us better [than our competitors]. For example, at O’Charley’s we deliver great value because we offer a complete meal—side, soup or salad and our famous roll—but we don’t point to our signature, “craveable” items.… We’ll have to remind them that we fly our salmon in daily and serve made-from-scratch strawberry lemonade. I don’t think they’re getting full recognition for being top-quality items.
FAST FACTS EDUCATION: bachelor’s degree, St. Cloud State University, St. Cloud, Minn.; master’s degree in business administration, University of ChicagoAGE: 48HOMETOWN: Willmar, Minn.HOBBIES: playing guitar, riding a Harley, reading and “chasing after my kids”PERSONAL: married for nearly 23 years; two kids
How do you get that message out?
Through a number of ways. Obviously, advertising is one way, but we also have to make sure we’re calling these attributes out even on our menus.
What do you see for the casual-dining segment in the near term?
I think the environment definitely is going to be a challenge at least until the end of the year, exacerbated by seemingly irrational pricing from our competitors.
Are discounting and coupon promotions the only ways to survive in this economy?
Deep discounting is becoming a challenge to those [casual] brands [that do it]. It’s disruptive to the expectations of guests. It puts at risk the value if it is derived solely on price. It’s a key component, but delivering a key guest experience also is valuable.
How has O’Charley’s answered the demand for value?
We’ve stayed focused on value the way we think it should be perceived: how the guests rate quality food at a fair price and great service. I fear that [reducing] price will become a short-run tactic that may have longer-term implications. To be sure, we clearly understand that our guests are under pressure and that price is important. We did some promotional activity ourselves, but kept it all in check by balancing it with great food and delivery of service. We don’t believe you can cost-cut your way to prosperity.
