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Restaurants make over menus to lure dwindling diners

Hungry? The good news is that frequently indistinguishable casual dining and fast-food restaurant chains, scared by the sucking sound of consumers putting their credit cards back into their wallets, are busy churning out new "value" meal offerings.

Subway is advertising its "$5 footlong subs" so much that the guy at the local sub shop in St. Petersburg sings the song of his competitor while working. Taco Bell's ad positions its new Triple Steak Burrito as a real deal, but it is, in fact, the chain's highest-priced burrito at $3.99.

Ruby Tuesday chain CEO Sandy Beall says business is "very, very difficult" with the weak economy and falling housing prices, but the company is unveiling yet another repriced menu this month built around its $5.99 burger.

"We are about the best burger in the business," Beall told analysts this month. "We know that. We are to burger what Outback is to steaks and Olive Garden is to pasta."

The real strategy is this: lure diners with a low-priced burger but sell them on the impulse buys, such as ribs.

"Hopefully," Beall says, "when somebody comes in and gets a burger, we can sell them one of our craveables."

The bad news is that any repositioning restaurant had better hurry because the rise in bankruptcies or closings by restaurant chains, from Tampa's Shells Seafood Restaurants and Bennigan's to Sam Seltzer's and Village Inn, is not over by a long shot. The current credit crunch makes the industry's woes tougher.

And new competitors — witness the ravenous reception of the Five Guys Burger and Fries chain opening in downtown St. Petersburg last week — are not waiting for an invitation.

From the white tablecloth set to 24/7 drive-throughs, many restaurants in the Tampa Bay area feel compelled to revamp their menus to at least appear — depending on the marketing pitch — cheaper, more "value-oriented" or, in some cases, higher-priced but for a good reason.

Yet restaurants reinventing menus and meal prices find they are squeezed. Their costs — for butter, beef and rice but also for transportation and basic real estate — are trending up just as consumers are more cost conscious. Wholesale food prices rose 8.7 percent through August this year.

Analysts such as Aaron Allen of Quantified Marketing Group see more chains heading for the garbage disposal. There are just too many middling restaurants vying for the tightening dining budget of America these days.

Let's do the math. The average American has enjoyed 22 dinners out each year between 2001 and 2007. Yet the number of restaurants grew by 14 percent over the same period. Something's got to give.

Robert Trigaux can be reached at

Restaurants make over menus to lure dwindling diners 10/15/08 [Last modified: Thursday, October 16, 2008 5:07pm]
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