Sure, Hormel is doing great in a tough economy, but where (if anywhere) are people eating when they go out? Are people still eating out at all?
In Oregon, particularly Portland, consumers are passing on the high end "foodie" paradises that were once opening by the dozen. Oregon Live reports that it is now the franchise that is the new king:
Although high-end restaurants have been hit hard recently --at least 25 closed last year in Portland --fast food is another matter.
Five Guys Burgers and Fries has exceeded revenue projections every month since opening in October in Beaverton. Franchise co-owner Ron Marble plans to open four franchises this year.
The Daily Herald writes that it isn't that people have stopped dining out, but it is how people have changed their dining out habits that is hurting the sit-down restaurant and favoring the fast food experience. One person interviewed spoke of ordering food to go to cut tip and beverage costs. He also says that if they do dine in, they drink water or split an entree:
That's a trend restaurateurs are seeing - those who dine in are skipping extras like appetizers and dessert, splitting main courses and saving money on drinks by passing on soda and alcohol. People who might have ordered a $60 bottle of wine are now ordering a $30 bottle. That, of course, lowers the amount of the bill - and the tips for the waitstaff.A tactic some restaurant owners are using to lure in customers are coupons. Places like The Ram Brewery and the Blue Sage Cafe offered 2-for1 coupons in January. TheNewsTribune.com interviewed the owner of the Billy McHale's in Federal Way, WA, who also started offering coupons after the harsh winter snow hurt sales:
While there is no magic potion for guaranteed restaurant survival, the key ideas that seem to come up again and again are comfort foods, catering to a different clientele by extending hours, low prices, value, and finding a niche.“I’ve been averaging 20 of these coupons a day,” he said. “The people who aren’t going to pay for an expensive meal are trading down to comfort food. We’re a family restaurant, and it’s tough for families right now.”
His store offers an extended happy hour, from 3 to 7 p.m. and again from 9 p.m. until closing – and in closing late, after most other local eateries and bars, he attracts a good number of restaurant employees.
Further Reading
- Seeking Alpha of the success of the Buffalo Wild Wings chain.
- MSNBC on Betty's Restaurant staying in business for 50 years.
- TheTimesOnline on fast food companies and the recession.
