One way to ruin your restaurant’s reputation…rats on YouTube

Interview: Jon Taffer – Bar Rescue & Nightclub & Bar 2013

Darden issues profit warning and blames payroll tax hike, gasoline price

ORLANDO, FLA. — Darden Restaurants, struggling to draw more customers into its Olive Garden and Red Lobster restaurants, said Friday that its third-quarter profit could fall below Wall Street’s expectations and cut its outlook for the year.

The Orlando, Fla.-based chain has tried to revamp menus and marketing for its flagship chains. But revenue at Olive Garden, Red Lobster and LongHorn Steakhouse locations open at least one year is expected to fall 4.5 percent in the quarter ending Feb. 24, indicating those efforts have yet to pay off.

The company’s priority is re-establishing customer traffic momentum at the three restaurant chains, CEO Clarence Otis said. “We recognize there is still more to do to further address affordability and to improve other important aspects of the guest experiences we provide.”

Otis said the first half of the fiscal third quarter was “encouraging,” but higher payroll taxes and rising gas prices, along with severe winter weather, sent sales sliding in February. Darden Restaurants Inc. said net income from continuing operations in December-February period will be $1 to $1.02 per share, below analyst expectations of $1.12 per share, according to FactSet.

Darden, like other restaurant chains, has been dealing with tougher competition from chains such as Chipotle Mexican Grill and Panera Bread that offer food a step up from fast food but not as expensive as a sit-down restaurant.

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Restaurant sales drop as consumers cut spending

The total number of U.S. restaurants is now 616,008

There were 4,442 more restaurants in the U.S. in fall 2012 than there were in fall 2011, according to a recent U.S. restaurant census conducted by The NPD Group. The total number of U.S. restaurants is now 616,008, a 0.7 percent increase over last year.

This data is based on NPD’s Fall 2012 ReCount, which is a count of commercial restaurant locations in the U.S. compiled in the spring and fall each year.

The Fall 2012 ReCount, which includes restaurants open as of Sept. 30, 2012, shows that most of the increase in units were in the quick-serve segment. The segment showed a 1 percent increase in units or an additional 4,037 units.

Full-service restaurant units, which include casual dining, midscale/family dining and fine dining restaurants, remained relatively stable from the Fall 2011 ReCount. The total chain restaurant count grew to 276,238, or a 1.1 percent increase compared to last year’s count.

Independent restaurant units remained stable at a total count of 339,770, a slight increase of 0.4 percent, which is the second consecutive increase for independents since 2009, reports NPD.

Additional data from the NPD Group’s Crest tracking system shows that total restaurant traffic was up 1 percent for the year ending November 2012 compared to the same period last year. American consumers made 60 billion restaurant visits during the period.

“The changes in spending, consumer visits and unit growth while slight are, at least, on the positive side,” said Greg Starzynski, director, product management, NPD Foodservice. “I expected a cautious approach to unit expansion as consumer visits improved, and I have no reason to suspect that will change in the foreseeable future.”

Source: Fast Casual

Fuddruckers Parent Buying Cheeseburger in Paradise

Luby’s Inc., which purchased burger chain Fuddruckers two years ago, came back for seconds this week, announcing it will acquire the 23-unit Cheeseburger in Paradise chain. Houston based Luby’s will pay $11 million plus “customary reimbursements for cash-on-hand, inventory, and accounts receivable offset by liabilities assumed at closing.” Prior-year revenues for those Cheeseburger in Paradise locations were roughly $50 million.

In 2010, Luby’s paid $63.5 million for the 59 company-owned Fuddruckers (with 129 franchised) plus three Koo Koo Roo California Kitchen units.

Source: Burger Business

5 Ways Applebee’s Grew Its Buzz Factor

Family-restaurant chain Applebee’s topped a recent BrandWeek survey of eateries that have improved their positive buzz the most. This puts the chain in a great position because, well, their buzz score was way higher than the rest of the list to begin with. TGI Friday’s, the next-highest ranked chain for buzz improvement, has just over half Applebee’s buzz rating.

How does the DineEquity (DIN) division keep the positive word flowing and sales growing? Here are five ways:

Make it fun. Applebee’s has put on a string of kooky events such as ’80s nights and blacklit evenings on nights when the moon is full. Talk about instant entertainment for the kids. Where ya gonna go when you can get that at Applebee’s, Denny’s (DENN) or Red Robin (RRGB)?

Keep it local. This chain has really taken to Facebook, with fan pages for individual stores. Don’t know when every retailer and restaurant is going to catch on to the power of this, but check out the thrill factor of seeing yourself on the fan page of your local Applebee’s. From there, the restaurant just promotes itself as diners share pictures on their own Facebook walls.

Build the community. The chain scored in September with affordable, all-you-can-eat “back to school” events that brought kids and families from local schools together to dine out at their local Applebee’s. See #1 for how the kids felt about getting to eat out with all their friends — like a McTakeover at McDonald’s (MCD), except the families don’t have to work behind the counter, and the food’s way better. What a great way to help families form a habit of heading to Applebee’s for dinner as they get into the school-year groove.

Make it patriotic. The chain has held “Thank a Soldier” days, and coming up, Applebee’s plans to serve free entrees to military members on Veteran’s day.

Keep the booze flowing. Two-for-one margaritas, all the time. Need I say more?

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