Self-Control
Steak and Ale's new management team is determined to revive the pioneering concept
By Scott Hume, Executive Managing Editor -- Restaurants & Institutions, 5/15/2004
When Norman Brinker opened the first Steak and Ale in 1966, there wasn’t much of a casual-dining chain-restaurant segment to speak of. Alan Stillman had opened T.G.I. Friday’s in New York City the previous year, but the chain-restaurant scene was dominated by quick-service concepts such as McDonald’s, White Castle and Whataburger, or full-service family-oriented operations including Shoney’s, Waffle House, Big Boy and Howard Johnson’s.
Brinker’s Steak and Ale (S&A) was something new and different, offering the ambience and menus of upscale independent restaurants at prices above diners but below special-occasion destinations. With its 18th century English country-house design, S&A was adult dining, and it changed the face, finances and future of the restaurant industry.
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The concept has gone through a series of management and ownership changes: going public in 1971; acquired by Pillsbury Co. in 1976; spun-off and acquired (along with the Bennigan’s Irish American Grill & Tavern, Ponderosa and Bonanza chains) in 1993 by Plano, Texas-based Metromedia Restaurant Group (MRG). Last year, Mark Bromberg and John Todd, principals of Irving, Texas-based Apex Restaurant Group, assumed management of MRG and its brands (superceding an earlier deal under which Apex would have acquired S&A, Ponderosa and Bonanza). Bromberg became MRG chairman, Todd its CEO, while both separately retain their posts with Apex.
Inside the Box
Bennigan’s—dating from 1976, it was one of many casual-dining
concepts following S&A’s lead—had been MRG’s
lead concept. S&A maintains a loyal following, but its performance
over the past few years suggests it is a concept whose most-productive
years were decades behind it.
From system sales of approximately $200 million and more than 140 units in 1998, S&A shrank to $110 million in sales by a 66-restaurant system last year.
Jay Willoughby isn’t panicking, nor is he looking for ways to dramatically rethink the S&A brand. Named the chain’s president after the Bromberg/Todd management shift, Willoughby—who previously headed Caribou Coffee and earlier managed McDonald’s Corp.’s U.S. venture with British sandwich chain Prêt A Manger—intends to put S&A back on its feet—if never back on top—as a successful and growing concept.
“Over the years, I think there have been attempts to reinvent S&A. One of the things you hear often in business is think outside the box, outside the four walls,” Willoughby says. “But we said, ‘Wait a minute. Maybe in this case we need to think within the four walls; let’s think within the box. Let’s not try to be something we’re not, but let’s make sure we’re as good as we possibly can be in how we operate S&A today.’ ”
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Willoughby is quick to credit Bill Spae, his predecessor as S&A president, with having begun the concept’s turnaround. Spae understood that over the years the brand had nurtured a more upscale image than many other casual-dining chains had developed. Burnishing that aura rather than abandoning it was the strategic direction Spae had set, and, says Willoughby, it was a good one.
It was Spae (now Bennigan’s president) who decided S&A should take reservations. He returned candles to tabletops for dinner and he revised a dormant wine-merchandising program, expanding selection and quality.
Taking Control of the Brand
Dennis Lombardi, principal at Chicago-based research firm Technomic
Inc., says re-establishing S&A as a premier brand is “a
challenge, but doable. Is it tough improving a brand? Yes, but
that’s what brands have to do.”
In S&A’s favor, he says, is having “steak” in its name at a time with high-protein diets in vogue.
Brands that have been neglected need to evaluate where fundamentals—menu, décor, pricing, food quality, etc.—may have strayed off target, Lombardi says. Then they must determine how well they execute operationally against those fundamentals.
“You need to ask, ‘What can we fix?’ and ‘What will have the most impact?’ ” he says. “Identify the low-hanging fruit, the easy wins, because regaining positive momentum is critical.”
Taking small but significant steps is exactly how S&A’s new management team says it is pursuing the rebuilding. Marketing tactics were the first fundamentals addressed.
“Before, there was a lot of discounting going on. It was all $5-off coupons in freestanding inserts and direct mail,” says Willoughby. “We’re still doing some inserts, but we’ve changed the focus to beauty shots of our food at a compelling price point rather than dollars off. We’re trying to offer some value, but with more focus on the quality of our food.”
Recent advertised promotions have included a new shrimp-skewer entrée for $9.99, a mixed-grill entrée priced at $12.99 and the offer of adding a shrimp scampi side to any entrée for $4.99. In addition to appearing in inserts, these offers are presented on tabletops or included on the inside front covers of menus.
“A lot of the previous marketing approach was reactionary; this is more proactive,” says Clay Dover, S&A vice president for marketing. “I suppose technically it’s still discounting, but there’s a difference. It’s a lot of food, good food, at a hot price point rather than saying, ‘Take $5 off anything you want.’ We had people ordering $7.99 salads or sandwiches and taking $5 off. We were getting shafted.
“We had to get away from that. We still wanted to offer an incentive to come visit, but now it’s going to be for a menu item and at a price point we set. From our standpoint, it’s all about putting in a plan and taking control of the brand again.”
S&A was one of the first chain concepts to offer an unlimited-visit salad bar. Most competitors either didn’t adopt or have abandoned that tactic, but S&A has improved the selection and reemphasized it at lunch, offering it for $6.99 alone or $7.79 with soup or baked potato.
The dinner menu itself has been changed, not only to promote new items but to be more elegant in design.
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“The new menu is easier to read and navigate,” says Dover. “Before it was all jumbled; the [high-margin] combination plates were down at the bottom in a corner. We ripped it apart and decided what we wanted to promote. We’re highlighting items we’re proud of and want to sell.”
No Balloons; No Clowns
With food and service quality improved, the next step is to broaden
S&A’s customer base, Dover says. Research found that
the average S&A guest was 51 years old, a little higher than
the average casual-dining customer, he says, but loyal to the
brand.
“We don’t want to alienate those older guests, but we do have to bring in a younger demographic,” he says.
A benefit of the S&A layout is that it has multiple dining rooms, says Dover. “When families with kids come in, they can be seated in the King Henry room or whatever. But we don’t do balloons; we don’t want clowns. It’s not an Applebee’s. No one sings ‘Happy birthday.’ ”
To attract families, there has to be something for kids, so S&A has a created a new children’s menu (with kid favorites such as chicken tenders) and a four-color “Castle Kids Adventures” booklet.
“The kids menu we had before was pitiful,” says Dover. “It was a crumby black-and-white placemat. On the back it said, ‘Color my world’ but you got only one crayon and you were lucky if it wasn’t gray.”
A “kids dine free Monday through Wednesday” program is in test and will be rolled out, Willoughby says.
It’s OK to be S&A
Finally, S&A unit managers have been given training and materials
covering neighborhood marketing: banquet menus to attract business
and civic gatherings; special early evening menus for seniors;
“achievement awards” redeemable for free kids meals
that can be given out at schools for good grades; business cards;
stationery; and more.
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“Everybody says, ‘Do neighborhood marketing!’ but the general managers didn’t know what that meant. They didn’t have anything to say,” says Dover. “We broke it down for them, gave them materials they can mix or match and told them, ‘It’s a sales call.’”
Neighborhood marketing, increasing per-unit profitability and improving execution of fundamentals are the strategic pillars for 2004. After that, a new unit prototype will be introduced and the concept will again look at expansion through both company-owned and franchised locations.
“Despite what this brand has been through, it’s still averaging $1.7 million in [average unit] sales,” says Willoughby. “There are a lot of concepts doing more than that, so I’m not bragging. But still, that’s no small number.”
Adds Dover, “Being Steak and Ale is OK. It’s never going to be the hot, sexy new thing, but the chain is performing well. It’s been around for almost 40 years; we just have to do what we do and do it right.”
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