Multiconcept Restaurant Operators Special Report: Holding Patterns
As the recession clamps down on expansion opportunities, multiconcept restaurant operators take a casual approach to shoring up existing brands.
By Kelly Smith Killian, Editor-in-Chief -- Restaurants & Institutions, October 1, 2009
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| Concentrics’ Max’s is a New York-style pizzeria in downtown Atlanta. |
It is no small admission when the CEO of a major restaurant group divulges that the average check at his flagship operation dropped nearly 50 percent in the previous year. But for Michael Dellar of San Francisco-based Lark Creek Restaurant Group, the plummet was part of a plan.
Dellar’s company, which operates seven concepts in Northern California and Las Vegas, took the drastic step this spring of recasting its 20-year-old signature restaurant, Lark Creek Inn—long a high-end, special-occasion destination—as a more-casual, value-oriented restaurant, now called The Tavern at Lark Creek. No entrée on the new menu costs more than $17—a move that shifted the check average at the rebranded concept from $60 to $32. The goal, says Dellar, was “to create a comfortable gathering place where guests feel welcome with or without an occasion to celebrate.”
It’s a theme that’s gaining steam among multiconcept operators (MCOs). As cash-strapped consumers dine out less often or trade down to more-inexpensive restaurants, many MCOs are putting upmarket expansion goals on hold and shifting their focus to creating exceedingly accessible experiences for diners—whether through launching new, broader-appeal concepts; introducing lower price points on existing menus; or finding new ways to cultivate a perception of value among brands traditionally regarded as high-brow.
“We’re seeing a pretty strong trend,” says Dellar. “People will continue to look for value ... and operators have learned that they can deliver the same quality at a lower price.”
Sticker Shock
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| The bar room at Aureole in New York City’s Times Square offers a quicker, more-casual dining experience. |
The decision to reposition Lark Creek’s flagship was a risky one, admits Dellar. In addition to changing the restaurant’s name and capping menu prices, the owners poured roughly $300,000 into freshening up the restaurant’s interior. “If it hadn’t clicked, we could have had a disaster,” Dellar says. “But we felt we had a very valuable asset. And if you have an asset that can deliver cash flow, then you have to try and figure out ways to make it more valuable.” It appears, at least in the short term, that the decision is paying off. “The response [from diners] has been overwhelming,” says Dellar. “Instead of 40 to 50 covers on weeknights, we’re doing 125 to 150, and instead of 200 to 250 on weekends, it’s 300 to 350.”
Despite the lower price points, Dellar insists the new menu by Chef Randy Lewis stays true to the restaurant’s (and the company’s) commitment to providing local, seasonal, sustainable food. “You’re not going to find a prime New York steak like you might have before, but you’ll find a really nice grass-fed, local flat-iron steak for $14.95.”
Multiple Points of Entry
For the Charlie Palmer Group, relocating Aureole from its 20-year residence in a New York City Upper West Side townhouse to a 13,000-square-foot space in Times Square allowed for the addition of an 82-seat bar area.
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| Diners at ROOF enjoy stunning views of Chicago. |
“We went from a one-dimensional, high-end, great-quality, fine-dining restaurant to a multifaceted space,” says Palmer. “The bar room provides a more-casual, quicker experience. You can have a three-course dinner, or you can have some bar snacks and a great glass of wine and be out of here in an hour. You choose.”
With the launch of the revamped Aureole, Palmer also debuted a new style of tasting menu that condenses the traditional eight-course meal into four courses, each pairing two complementary dishes. It offers another entry point for diners who might want a a shorter meal. “People [still] get to try all these interesting, different dishes and textures and flavors in a 'normal’ dining period of two hours, not three-and-a-half or four,” says Palmer.
BOA Steakhouse also broadened its menu when it relocated to a new, eight-times-as-large space in West Hollywood, Calif., in June. Expanded lunch deals (including a $22 prix fixe) and a menu section on the lower end of the restaurant’s price scale that pairs proteins and sides on one plate offers “a little bit of something for everyone,” says Lee Maen, a partner at Innovative Dining Group, which owns BOA. The new options also give regulars a reason to come in more often. “We’re about the people who come to us on a regular basis,” Maen says.
Business: Casual
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Where MCOs are growing their portfolios, they’re doing so with more-cost-conscious, user-friendly concepts. Daniel Boulud's The Dinex Group, based in New York City, describes its newest culinary star, DBGB Kitchen & Bar (opened in June), as “a lowdown downtown place where the French brasserie meets the American tavern.” The menu is focused largely on burgers and house-made sausages, such as the classic DBGB Dog, a beef wiener with ketchup, mustard, sauteed onions, relish and fries for $9. At lunch, a three-course prix-fixe meal goes for $22.
Pizzerias also continue to be go-to casual concepts for MCOs. Philadelphia-based Starr Restaurants launched Pizzeria Stella locally at the end of September, and Pulino’s Bar and Pizzeria, the much-anticipated collaboration between New York City restaurateur Keith McNally (Balthazar, Minetta Tavern) and Chef Nate Appleman (formerly of San Francisco’s A16) is scheduled to debut in Manhattan in December.
Atlanta’s Concentrics Restaurants claimed its piece of the pie with the June introduction of Max’s Coal Oven Pizzeria, a New York-style pizzeria with a communal table meant to encourage guests to “share a friendly meal.”
“There’s nothing esoteric about it,” says owner and founder Bob Amick, “It’s [a simple], ingredient-driven concept. We’ve never been in the high, high end of the market.”
Good Neighbors
Beyond the opening of new, more-casual concepts, growth this year among MCOs continues to be in the area of hotel partnerships, although the deals likely were inked before the U.S. economy hit its roughest patch.
The key to success for MCOs in this segment? Positioning hotel-based concepts as neighborhood spots with as much appeal for local residents and business lunchers as for travelers.
Case in point: Concentrics’ three Chicago concepts, State & Lake, cibo matto and ROOF, all located inside the new theWit hotel, have done well since they debuted in late spring and early summer. In ROOF, for example, “We’re probably doing five times what we thought we’d do,” says Amick.
Of course, being the cool new kid on the block may be part of the reason for the concepts’ success. But Amick also credits Concentrics’ efforts to “bring the neighborhood feel downtown.” State & Lake, the three-meal-a-day, 110-seat eatery at street level, has a local-beer program that focuses on brews from Chicago and other areas in the Midwest. It also sources ingredients from local farms and markets.
“We were challenged with how to make these restaurants feel not like a hotel product but [concepts] that can stand on their own,” he says. About 75% to 80% of State & Lake’s business comes from customers who aren’t hotel guests, and the restaurant has established itself as a popular lunch spot.
“We want to become part of the fabric of the city,” says Amick. “We want you to [come in] if you stay in [theWit]; we want you to come in if you live in the neighborhood or if you’re staying in the hotel across the street.”
Contact writer at kelly.killian@reedbusiness.com
Opening Acts
The economy hasn’t completely put the kibosh on MCOs’ expansion plans. Here are some of the forthcoming entries on the culinary landscape.
Concept/Operator: Bistro Niko (Buckhead Life Restaurant Group)
Location: Atlanta
The Buzz: Slated for a mid-October debut, the 200-seat French bistro promises to showcase the lighter side of French cuisine and hopes to be a destination diners will look to when they want a to grab a quick bite, such as a pressed sandwich, or celebrate a special occasion.
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Concept/Operator: Bakeshop (Concentrics Restaurants)
Location: Atlanta
The Buzz: Pastry chef Jonathan St. Hilaire (pictured), formerly of the group’s flagship restaurant Trois (which Concentrics originally closed this summer for a makeover but ultimately decided to shutter permanently) heads up this bakery-cafe, scheduled to open October 15. Concentrics plans to stir up interest with promotions on social-networking sites such as Facebook and Twitter.
Concept/Operator: Maialino (Union Square Hospitality Group)
Location: New York City
Due to open in November, Danny Meyer’s “neighborhood Roman trattoria,” to be headed by Gramercy Tavern’s Nick Anderer, will anchor Ian Schrager’s Gramercy Park Hotel.
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