Top 5 Lessons for Chain Restaurants in 2012: Doritos Tacos Work; Lobster Stuffed Filet Doesn't
It's that time of year when chain restaurants report their year-end earnings and industry rags scramble to report and explain all that went right and wrong for the industry over the past 12 months. People in boardrooms ponder these lessons, and sit around trying to think up ways to gain our business in the coming year. It's easy to be smug at this time of year, to sit back and think, "yeah, no shit that dumb promotion of yours didn't work." But it's also a little depressing -- who would have thought a Dorito shell could be such a lifesaver for Taco Bell? So here are the 5 lessons learned from 2012's chain restaurant successes and failures.
E. Courtland Doritos Tacos Locos: 2012 success story
5. Faux-fancy menu items don't work.
Darden, the company that owns Olive Garden, Red Lobster and Longhorn Steakhouse, didn't have a great year. All of those properties had sales that were down over last year. The company blamed a bunch of promotions that didn't work. Such as? Longhorn hyped filets stuffed with cheddar and bacon, and another stuffed with lobster. Gross. Red Lobster added items like "wood-grilled chicken with portobello wine sauce," the kind of thing that it's very hard to do right if your business model focuses on taking things out of a bag and heating them up (popcorn shrimp work ok with this model, and lobsters thankfully come with their own nature-packaging -- easy to boil and serve). At Olive Garden, folks apparently didn't go for the "Dinner Today & Tomorrow" promotion, which offered a to-go entree for the next night as part of the price of your meal. Weird ...
4. Bilking employees out of health care also doesn't work
Darden also found itself on the wrong end of the public relations stick when, in response to Obamacare (which will require most companies to offer health insurance for full-time workers), they decided that they'd just hire more part-time workers to get around the law. It turns out, that plan didn't go so well. This week, the company reported that not only was the move bad publicity-wise, but in the markets where the part-time experiment went down, both employee and customer satisfaction decreased significantly. Turns out what's good for employees is also good for business in some cases. Whoda thunk?
3. Booze = good.
Alcohol sales were significantly up this year in all kinds of restaurants. Business reporters are looking for reasons relating to the recession and stuff, rather than the more obvious cocktail resurgence and gastronomic trickle-down of food culture (and thus, wine and beer culture). But whatever, the takeaway is that if you serve decent alcohol at your establishment you'll make more money.