Improving sales trends have many restaurant operators cautiously optimistic about the year ahead, but they remain concerned about the threats posed by soaring gas prices and commodity costs.
Nation’s Restaurant News asked several operators to share their thoughts on 2011 so far, and what the rest of the year holds for their businesses.
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“This year is shaping up really nicely. We can definitely tell consumers are getting back out there and into the restaurants eating. It’s an exciting year for us because we’re in a great growth mode. It feels like we’re graduating from elementary school and into high school. We have eight restaurants open, and we’ve been able to bring in great people, which has really helped strengthen the company. The rest of the year will continue as a year of growth — in systems and people and in development, all of the things that make a great restaurant company. We just opened the eighth unit in Cerritos, Calif., and No. 9 is scheduled to open in November in West Covina, Calif. Next year we have three more planned, so we will have 12 by the end of 2012.”
— Chris Simms, chief executive of Lazy Dog Cafe, an eight-unit casual-dining chain based in Huntington Beach, Calif.
“We think things have definitely improved in 2011. We’re optimistic about that improvement continuing the rest of the year, and I base that off the Knapp-Track data for casual dining, not only nationwide but especially here in California.”
— Mimi Somerman, senior vice president of marketing for Mimi’s Cafe, a 145-unit casual-dining chain based in Irvine, Calif.
“2011 is the same as 2010, only more hopeful. There’s not some upsurge in cover counts for us or some great revival in the land. The floor count is up 10 percent, but private dining is down, so overall we’re flat. But there is a brightness and energy on the floor, and the nights are more dynamic. You might have someone come in and order a $1,000 bottle of wine. That didn’t happen last year.”
— Mark Canlis, partner in Canlis Restaurant in Seattle
“So far we’re off to a great start. We’re up 8 percent. The headwind we’re facing is commodities pressures. All the proteins are up considerably across the board. Unfortunately we can’t do a whole lot in prices with this fragile economy.”
— James McNab Jr., owner of six Sonny’s Real Pit Bar-B-Q restaurants in eastern Florida
“I expect this to be an incredible year. Our competition is not doing as well as we are, and the McCafé Frappés and Smoothies have really become a big part of our business. And McDonald’s is doing really well promoting them. They understand it’s a people business, not just burgers and beverages, and their training and support philosophies will continue to make great things happen.”
— Wayne Galante, a McDonald’s general manager in Uniondale, N.Y.
“We believe that Sizzler was very fortunate to have developed a strongly connected relationship with our guests through our ‘back to the basics’ campaign started three years ago. Our focus on providing this value dining experience at the same time as we are remodeling and updating our restaurants has resulted in almost three years of comp-store sales increases. We believe that consumers will continue to be loyal to restaurants that have the guest’s best interests in mind. We are poised to have a very big 2011 and 2012, as we reintroduce our franchise program and look for ways to put people in this beautiful country back to work and begin developing some Sizzlers in new markets.”
— Kerry Kramp, chief executive and president of Sizzler USA in Culver City, Calif., the operator and franchisor of 178 limited-table-service restaurants
“2010 was the best year in my career, but so far we’re flat in the first quarter of 2011, which I’m grateful for with higher commodities and gas going through the roof. I don’t look forward to $4 gas. Four-dollar gas will be a real issue for everyone, not just with us.”
— Eric Holm, Holm Restaurants LLC of Orlando, Fla., Metro Corral Partners division, which operates 27 Golden Corral family-dining restaurants in the Southeast
“We have seen that people continue to not only look for inexpensive dining, but comfort in the process. Although this economy has been difficult for all owners in the industry, we have seen modest increases from last year at this time and expect the same trend to continue throughout the year. For those reasons, we will continue to look for cost-effective means for our guests who love the comfort of what we have to offer at Norma’s Cafe.”
— Ed Murph, owner of the two-unit Norma’s Cafe in Dallas and Addison, Texas
“This year, every Friday in January and February we had a blizzard, from Minnesota to Baltimore, so to be down only 2.4 percent in comp sales, we feel pretty good about where we are. But our check average is up about 40 cents, too. As we carry out our key initiatives and as the weather clears, we’re seeing a nice pop. Our plan was to have a 1-percent systemwide comp-sales increase, and we think that’s very achievable with our bar and appetizer initiatives and our marketing calendar.”
— Rodger Head, chief executive, bd’s Mongolian Grill, a 35-unit casual-dining chain based in Burnsville, Minn.
“There is some good news and bad news, but generally business is pretty much the same as last year. At some of our San Francisco restaurants we depend a lot on the theater and performing arts, and the shows haven’t been terrific. In the financial district, things are as good as they were last year, but not as good as they have been, as a lot of offices are not ordering as much [catered food] as they once did to keep people at their desks. Our restaurants in the suburbs have been doing better, and our airport business is up. It’s so hard to tell how things are going to go; gas prices are not helping anything. How do you plan for a Libya or a Japan or the ‘disaster du jour’? The good news is that we’ve been around awhile, so we’ve been through a lot of these types of cycles and our debt is low. Right now we’re trying to expand our Billy Berk’s concept because it has higher profit margins, with booze accounting for 35 percent to 40 percent of the sales.”
— Dennis Berkowitz, chief executive and founder of Max’s World, the San Francisco operator of nine full-service Max’s and Billy Berk’s restaurants, a caterer and concessionaire at three airports, the franchisor of a single Max’s location
MORE: Restaurant executives provided a snapshot of business trends so far in 2011 in the First Quarter NRN a.m. Restaurant Operators Survey. See the results.