By: Leo J. Shapiro and Steve Yahn Restaurants, like morticians, are unbundling or decoupling their offerings. Recognizing that it is the food that brings and satisfies customers, restaurants are innovating new trade-offs that let customers eat with gusto without paying for unwanted ambience and service. Specifically, this unbundling is creating a new a breed of casual-gourmet restaurants such as Starwich or Fish City Grill that are moving into the gap between casual and gourmet restaurants.
Unbundling of food from ambience and service provides a new newspaper advertising category opportunity. Brand-building advertising is needed to romance food served in settings that do not have the great ambience or service that now comes with gourmet food -- new, more informal settings that offer prices attractive to the emerging casual-gourmet diners.
Like morticians, restaurants now face the difficulty of tempting consumers by advertising a product which consumers resist thinking about. Leo J. Shapiro and Associates' national surveys find that more than half of consumers (55%) are trying to cut back on calories. In October 2005, nearly half (48%) of consumers interviewed feared that what makes food tasty is bad for their health. Broad majorities of consumers are trying to cut back on fat, sugar, salt -- the very things that make food seductively tasty.
Only 7% of consumers surveyed name a gourmet restaurant as the place where they go most often to eat out. Why? They do not want to spend the money a gourmet restaurant charges for food or spend the time they feel they should spend lingering over a meal in order to benefit from the ambience and service for which they have paid.
Gourmet restaurants may be great places to eat, but they are poor prospects for the sale of advertising media or creative services. Fiscal prudence demands that the sum of the dollars spent for occupancy and advertising be controlled as a fixed percent of revenue. So much of what gourmet restaurant spend for rent, fixtures, and labor that there is not enough money is left over to buy brand-building or, even, promotional advertising. In fact, to offset a portion of their high cost of service, gourmet restaurants strongly encourage tipping.
Quick-serve restaurants are at the other extreme. Given the somewhat dubious reputation of quick-serve restaurants for food and their barebones ambience and service, quick-serve restaurants must rely heaving on promotional, price-oriented advertising to attract traffic.
Still, because saving money and saving time is important, quick-serve restaurants are named by 24% of consumers as the place where they eat out most often. Today, quick-serve restaurants are trying to edge into the vast middle ground between themselves and casual restaurants by promoting innovative dishes that aspire to being great -- witness McDonald's gourmet coffee. Brand-building advertising is needed to romance food served in a barebones setting with minimal service.
The vast middle ground between the gourmet and quick-serve restaurants has been filled, partially, by casual restaurants -- like Red Lobster, Olive Garden, Applebee's, and Chili's, for example. These casual restaurants occupy a "goldilocks" position between quick-serve and gourmet restaurants. Their prices are not seen as being the highest and their food, ambience and service are not seen as being the worst.
Casual restaurants are great prospects for brand-building. They have learned to use the power of brand-building advertising lavishly to create the aura of fun and sizzle that adds to the enjoyment of eating food in a place with middling ambience and service.
The middle position is inherently vulnerable. Having grown fat by virtue of offering an attractive trade-off between price, food, ambience, and service, casual restaurant chains are beginning to attract nimble predators. A new breed of restaurants, what we call the casual-gourmet category, is now moving into the gap between casual and gourmet restaurants.
New, fast-growing casual-gourmet chains open in lower-rent, neighborhood locations, offering food that approaches gourmet quality but at sharply discounted price in comfortable settings with pretty good service. Casual-gourmet restaurants have created a trade-off between food, ambience, service, and price that has great appeal for consumers.
THE BOTTOM LINE
What is exciting for advertising media and creative marketing services is the absolute need for brand-building advertising by innovative casual-gourmet restaurants.
When it comes to going after casual-gourmet restaurant advertising, newspapers, with their stronghold of "local" customers, have a significant opportunity to get their fair and financially rewarding share of this exciting new advertising category. Not only can newspapers provide creative input, but their demographic databases and "gut" feeling for the lifestyles of readers in their community will be an invaluable asset to the "newbie" casual-gourmet restaurant operator.
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