Catering to customers

Restaurants adapt to new tastes, shrinking wallets

McClatchy Newspapers

KANSAS CITY, Mo.

Happy days may or may not be here again, but happy hours and other promotions are.

As a result, a Kansas City-area restaurant is bustling with late-night customers. And they aren’t coming in just to chow down on discounted drinks and eats.

Depending on what night you drop into the Gladstone, Mo., Applebee’s Neighborhood Grill and Bar, you might find customers playing extreme bingo, family feud, water pong or even bar trivia.

It’s all part of the restaurant’s new late-night happy-hour offerings.

“It’s doing quite well as more customers hear about it,” said Steven Swift, general manager of the restaurant. “We’re nestled in a neighborhood, and they come in to see, ‘What are they doing tonight?’ We’ve had swim teams, football teams, softball teams, lots of couples and — should I say this? — church groups.”

As the restaurant industry slowly recovers from two years of traffic declines, operators are rolling out more and more options to keep the momentum going. There’s more emphasis on nontraditional “day-parts,” such as late-night happy hours or midafternoon snack times; an increase in daily deal offerings such as Groupon; new menu items such as chicken at breakfast or eggs at lunch and dinner; branded products; and even smaller, more cost-efficient formats.

“We’re seeing a lot of downsizing, a casualization of fine dining, more entertainment and promotions on the weekdays. Along with that, there’s been a lot of focus put on bar food,” said Bonnie Riggs, restaurant industry analyst for The NPD Group, a market research firm. “This serves a lot of purposes in terms of giving consumers more choices — smaller portions, small prices and also an opportunity for the operator to move a lot of high-profit-margin alcoholic beverages.”

For the year ending February 2011, total industry traffic was flat, compared with a 3 percent decline for the same period a year ago. A report by NPD Group forecasts growth of less than 1 percent a year through 2019. So if the market isn’t growing — or isn’t growing by much — restaurants have to be even more competitive and creative.

Take late-night happy hours.

Some people aren’t ready to call it a night after being at a sporting event or movie. Or maybe it’s just too hot to get out earlier in the evening.

Houlihan’s long has offered a late-night version of the traditional after-work happy hour, but it really took off a couple of years ago when the national chain began offering special prices on food as well as drinks.

Other restaurant chains have taken note.

From 9 p.m. to close, the Gladstone Applebee’s offers games along with special food and drink prices — such as Monday night’s Family Feud with $5 Rolling Rock beer pitchers and $5 burgers. About 80 percent of Applebee’s 2,000 locations offer the late-night menu, and nearly all are open until midnight or later every day.

There are other ingredients that could get the restaurant industry cooking again. Also on the menu:

Value, beyond low prices. Three-fourths of people surveyed by NPD Group are described as “cautious consumers” — especially skewed toward the unemployed, less affluent and retirees. They said they were reducing their restaurant visits, trading down and ordering fewer items. They are more concerned with price and value.

Technomic, a Chicago food industry research firm, found that many “daily deals” such as Groupon were bringing in new customers, and a majority would later return without coupons and recommend it to their family or friends.

New menu items. “Sustainable,” “healthy” and “low-fat” are still buzz words, but restaurants also are whetting appetites with new trends. They’re upping low-brow foods such as meatballs with higher-quality ingredients and sauces, and turning around our ideas of what we should eat when.

Eggs are not just for breakfast anymore. In Kansas City, the new Martin City Brewing Co. has a braised brisket sandwich with egg over easy, and the new Genessee Royale Bistro offers a fried egg and country ham biscuit, along with a buttermilk biscuit, fried chicken and sunny-side-up egg with gravy sandwich for lunch.

Small-size it. With fewer new shopping centers being built in the post-recession, restaurants have to look elsewhere to expand, and smaller formats give them more flexibility. They also are cheaper to build.

New products. Pieroguys Pierogies started as a pierogi manufacturing company but recently opened a caf in Kansas City. The cafe serves free sauces with its pierogis and will soon start selling two bottled versions under the Pieroguys Pierogies label.

It also will sell the sauces through its website and maybe later through grocery stores that also sell its frozen pierogis.

“Whenever we did caterings or parties, I would make my own marinara sauce and people were asking me why I didn’t bottle it,” said Frank Gazella Jr., co-founder of the company. “It’s an additional revenue stream. And it gets the Pieroguys Pierogies name out there. You want to have our own brand and not use other people’s sauces.”