As consumers continue to struggle in a down economy, they are definitely spending less on eating out. This leaves restaurant and bar operators across the country looking for unique ways to maximize the customer’s experience at each visit.
From drink specials and new menu items to community outreach, managers agree that the key to increasing sales and visits is in reinterpreting the idea of value, which isn’t a matter of price alone.
“Value isn’t only a price thing,” says Blake Rohrabaugh, beverage director at the 47-location Glenview, Illinois-based Bar Louie. “People are willing to pay for a good drink, but it has to be worth it. It has to be a really cool drink so they feel good about spending money.”
Robrabaugh is hardly alone in the ranks of operators who are trying to provide more to their customers while making each of their visits more profitable.
With the economic slowdown, Rohrabaugh is continuing to see a shift in how consumers are spending their money when eating out. “Over the last 18 months or so, our food sales have gone down and beverage sales are up,” says Rohrabaugh. “People are staying home to eat and then coming out to drink.”
After noticing the trend and realizing that 50 percent of his guests where coming in larger crowds, Rohrabaugh at Bar Louie created a new menu to appeal to this clientele. Launched in May, it features a variety of small plates to give people more sharable options. The menu offers items like chicken nachos and small pizzas, which are priced from $5.99 to $9.99 and are good for groups.
“We have absolutely seen an increase in the small plates category—especially between the hours of 4 and 10 p.m.,” Rohrabaugh explains. He adds that the new menu has increased bar food sales by almost 10 percent.
In addition, the chain has also changed some of its seating options to better appeal to larger parties. “Big groups can’t all fit at our bar, he says. “We added large high-top tables so they can still get the bar experience.”
At the bar itself, the operation has also made a conscious effort to offer drinks across all price points. “We have drink options for our customers whether they want to spend $3 or $10,” explains Rohrabaugh.
But he is quick to say that the chain does not offer deep discounts. Instead they focus on offering value at different price points. For example, the chain’s beer of the month club offers a 30-ounce draft of beer for $3.50. “This is not your college 50-cents-a-can promotion,” he notes. “It’s a good beer at a good price.” Most recently they featured “Cuatro Hombres,” a quartet of Corona, Corona Light, Pacifico and Modelo Especial.
In addition, the chain creates seasonal cocktails to entice consumers to try something new. “We try to create something cool that they can’t get anywhere else or haven’t heard of before.” For example, the “Seasons Sips” menu—priced from $7 to $9—featured the Dark and Stormier, made with Skyy Ginger Vodka, Ginger Beer, Cruzan Black Strap Rum and a twist of lime.
In addition, the chain has also made simple changes to some of the spirits they use in cocktails. For example, instead of creating an expensive cocktail with a super high-end spirit, they are often using a good quality mid-range spirit. “It’s a way to give a more affordable price without compromising taste,” explains Rohrabaugh. “Consumers are still enjoying the cocktail and it isn’t as expensive to create.”
The key, he emphasizes, is orchestrating a complete overall visit. “We try to give them a great experience and entice them to try something they haven’t before. We don’t upsell just for the sake of it.”
The chain has no intention of trying to compete with fast food for clientele—even at lunch. “When you think of Bar Louie, we aren’t necessarily fast. When people have 45 minutes or so for lunch, they come here. We aren’t competing with McDonald’s or Wendy’s for the 30-minute lunch.”
That said, the chain has made a renewed effort to reach out to local businesses to get word out that they are open for lunch. They have done some discounted combo items (at some locations), where they offer Louie’s Lunchbox – a burger, fries and a drink for the discounted price of $5.99.
He’s final advice: “Don’t fight against who you are.” If you do what you are known for really well, customers will continue to patronize your operation and hopefully maximize their experience at it.
At the approximately 700-room Broadmoor Hotel & Resort in Colorado Springs, staying true to its culture has been key to weathering the economic storm. When the hotel saw occupancy going down, it reached out to the potential local customers.
“Colorado Springs has a good amount of people and we hadn’t really reached out to get business from the local base before,” explains wine director Tim Baldwin. “This opened up the opportunity to bring our brand to the community.”
In the past, the luxury hotel didn’t need to look to the community for supplemental income, as a greater proportion of the property’s guests were more than willing to pay a premium to eat at their high-end restaurants. “We noticed that the casual restaurants were taking more volume and spending across the board,” says Baldwin.
To bring in new business, the resort reached out to the Colorado Springs community and worked with local media sources to let them know that the Broadmoor was ready to roll out the red carpet for local clientele. “On any given day, our restaurant mix is 95 to 5, with the larger portion coming from hotel guests.” The goal was to build up this local clientele as a percentage to ensure more repeat customers.
One program, promoted through a local paper, offered discounted meals for Colorado Springs natives. “We had a ‘deal of the week’ featured in the local paper and on their website, where people would pay $20 and get $40 at our restaurants,” explains Baldwin. “It opened up the opportunity to bring in the community.”
Once the locals were in, the staff was instructed to give them a little extra attention. “We try to establish relationships with the right people,” he says. “The nice thing is it doesn’t really cost any money. We just instruct our managers to give out their business card to local guests and ask them to call if they are having any problems getting reservations.”
This attention to detail is what Baldwin calls old-fashioned hospitality and it has definitely worked to increase both sales and guest counts.
The Broadmoor also made the decision to not push increased supplier prices upon the guests. “Even though vendors were raising prices, we didn’t raise the costs to the consumer,” says Baldwin. “A lot of vendors felt the easy solution was raising prices, we didn’t.”
To even out costs, the hotel challenged itself to rethink some vendor relationships. “We sourced out new products and looked for new vendors,” Baldwin explains. “In times like this, you have an eye for more value. You have to look around a bit to help keep your costs low.”
Quality of services and products remain paramount. “We worked hard to make sure the value and quality remained in our restaurants,” he says. “The management has a saying that ‘We’ve been around for almost 100 years and we plan to be around for another 100.’ We can’t sacrifice our business because of a downturn. We were told to do whatever we needed to keep up our top-notch service.”
While some operators are seeing a decrease in foot traffic due the economy, the one-location Heathman Restaurant and Bar in the approximately 150-room Heathman Hotel in Portland, Oregon, hasn’t noticed a change. “There are people still walking through the door—they are just spending less,” notes Garrett Peck, general manager. The French-influenced restaurant features Pacific Northwest ingredients.
To entice guests to spend a little more, while still spending less, the Heathman decided to expand the hours it serves its happy hour menu to all day long. “Now we are just happy all the time,” quips Peck.
He notes that they were the first restaurant in town to do a promotion like this and the response has been positive. “We’re busier longer and people aren’t getting up and leaving at six, and that often transitions them to ordering another cocktail,” says Peck. The previous happy hours were in effect from 4 to 6 p.m. and 9 p.m. until close.
Wine sales have gone down at the Heathman, to which Peck attributes a decrease in high-end wine purchases. “People are very tuned in to the sweet spot wines: $38 to $68 a bottle,” he says. “People don’t even get the near the triple digit stuff.”
Of the 900 selections on the Heathman wine list ($27 to $2,375), about 30 percent fall in that high-end category. There has been no effort to devalue those wines, but Peck does say that as the higher end-wines are consumed, they are replacing them with selections in the $38 to $68 range. “You can get wines of all values.”
In addition, Peck is noticing that the restaurant’s dedication to supporting the local community is also paying off in these hard economic times. “We have always been philanthropic and found ways to give back to the community,” he explains. “It’s how we get our name out on the street. We don’t really do any advertising.” The restaurant is regularly involved in school auctions and other charity events.
Perhaps the most important focus, notes Peck, is retuning the hospitality experience. “Every table needs to be touched by a manager and thanked for coming out. You can go anywhere to get good food, but you can’t go anywhere to get real genuine heart and soul hospitality.”
Peck’s comments reflect one of the most important values in the restaurant and bar business. As the hospitality industry moves into a new decade in challenging times, the approach to service is continually being redefined. Part of this is the realization by operators that catering to their customer base involves much more than offering accessible pricing.