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Behind the Line: Let them eat cake
New value menu items support The Cheesecake Factory's bottom line
By Lauren Kramer
February 01, 2009
It's a rainy Friday night in downtown Seattle and The
Cheesecake Factory lobby is crammed with pager-holding, hungry
diners waiting between 30 and 40 minutes for a table.
Cheesecake samples are passed around and children snack on
baguettes as they wait. Yet even this busy scene is testament
to the
economic recession and the affect it is having on one
of the busiest and most successful U.S. restaurant chains.
"Waits on a Friday night are normally 45 minutes to an
hour," says Robert Okura, VP of culinary development for the
Calabasas Hills, Calif.-based restaurant chain. "We're still
busier than most restaurants, but our figures are definitely
down."
The Cheesecake Factory launched an eight-item value-focused
menu in November, adding to its 200-item regular menu with a
series of new dishes priced between $11.95 and $14.95.
"We came up with great recipes that don't sacrifice quality
or creativity, but are just priced somewhat lower than our
other menu items," says Okura.
The most expensive item on the value-focused menu is
barbecued salmon at $14.95. Other items include chicken
bellagio, cashew chicken salad, chicken potpie and tomato basil
pasta for $12.95 each.
At the Morgan Stanley Global Consumer & Retail
Conference held last November in New York City, Matthew Clark,
The Cheesecake Factory's VP of strategic planning, said that
several of the value-focused menu items are No. 1 in their
respective categories already.
The Cheesecake Factory has also introduced new marketing
efforts to boost sales at its 145 restaurants. For its 30th
anniversary this year the company handed out close to 2 million
guest cards in October, inviting past diners to return and earn
a complimentary slice of cheesecake with every $30 purchase.
"We're also featuring a $10 guest card instead of cheesecake in
three test markets," says Mark Mears, chief marketing officer.
The programs have had a 5 percent redemption rate since their
introduction.
The average check per person at The Cheese Factory is
approximately $18, with average unit volumes reaching almost
$10 million for the 144-restaurant casual-dining chain. But
with the continuing decline in the economy, Okura joins most
other restaurateurs in his expectation that this holiday season
will be slower than in the past.
"We're doing our best to ride this recession out, and that
includes continuing to look into the possibilities of
developing new items at attractive price points," says Okura.
"Nothing will change quickly with this recession and I think
it's a good thing we can come up with these good dishes at a
good price range."
At the RockSugar Pan Asian Kitchen, a new concept that The
Cheesecake Factory opened in Los Angeles last June, the
reception has been "unbelievably strong," according to Okura.
"Zagat just listed it as one of America's top restaurants," he
says.
RockSugar focuses on Southeast Asian food that is less
familiar to mainstream diners, particularly from Singapore,
Thailand and Vietnam. "It's a different, new and exciting
upscale casual-dining concept that took us three years to put
together," says Okura. "It's piquing customers' interest, and
people are loving it, so it's done remarkably well."
The Cheesecake Factory is hoping to expand its 13-unit Grand
Luxe Café concept in the near future. But the key to success
for all of its restaurants in these economic times will be
maintaining a commitment to quality food and service, Okura
says.
His advice to restaurateurs is not to take their eyes off
the guest. "Don't forget the fact that the guest is No. 1," he
cautions. "You can't just speak of guest service, you have to
make it your priority and not just focus on your bottom line.
The restaurants that stay true to providing exceptional dining
experiences for guests will be able to hit the street running
and get back to business when this economic storm has been
ridden out."
Contributing Editor Lauren Kramer lives in British
Columbia