Restaurants and Institutions

Dennis Lombardi

The Age of Casualty-Dining Restaurants?
July 30, 2008

The abrupt closing of Bennigan’s company stores (as well as Steak & Ale and the Tavern units) has been in the news.  I was speaking with a reporter yesterday about the Bennigan’s bankruptcy, and in the course of the conversation, she misspoke, referring to the segment as "casualty dining." It was one of those funny “out of the mouth of babes” moments. I have to say, it rang true.

We are all painfully aware of how tough these times are for operators. Consumer spending is down, commodity prices are soaring, other costs are following suit. It is about as bad as I have seen it in at past 25 years. So it is not a surprise that a casual-dining brand—-especially one that has not been the strongest of brands in the minds of consumers-—had to shut its doors. 

Casual dining seems to be particularly vulnerable. A lot of their occasions are discretionary, and easier for the customer to opt out, stay home, and save what little disposable income they have left.

What is sad about this event, first and foremost, is that a lot of people have lost their jobs overnight. It’s also is a bit sad to see Steak & Ale slip into history. How many executives in our business were trained under Norman Brinker during his S&A days? Many referred to themselves as graduates of “Steak & Ale University.”

It’s survival of the fittest.  Brands that have not evolved with changing consumer preferences are very vulnerable to economic downturns. Consumer expectations have increased too, and concepts need to match those expectations with their offer or face extinction.

There are a few other concepts out there that may face the same fate as Bennigan’s. No quick fix can bring a beleaguered concept back. The lesson is to invest in the concept before times get tough and it becomes a case of “too little, too late.”

Posted by Dennis Lombardi on July 30, 2008 | Comments (3)