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Tag Archives: Morton’s Steakhouse

Restaurant earnings: Beyond the numbers – from Nation’s Restaurant News

Restaurant earnings: Beyond the numbers

By Mike  Dempsey

(Feb. 18, 2010) Financial results were mixed this week as a cross-section of restaurant companies reported fourth-quarter earnings. Stalled consumer spending and continued traffic declines plagued top lines, while bright spots included positive earnings growth from cost-cutting moves and favorable comparison to year-ago figures.

Beyond the numbers, companies laid out strategies aimed at combating the sluggish economy and igniting sales and traffic.

Read the rest of the article here:

http://www.nrn.com/breakingNews.aspx?id=379646

The article goes on to list four companies’ results, Darden, the parent of Red Lobster, P. F. Chang’s, which reported a doubling of profit in the 4th quarter of 2009, Denny’s and Jack in the Box. The article explains that there are bright spots in casual dining, while higher end chains still continue to struggle.

Ruth’s Hospitality Group is such a restaurant operator still struggling with profits, although they “cut their losses” in the 4th quarter. According to NRN, they are still struggling with same store sales, falling 11.2%. You can read the whole article here:

http://www.nrn.com/breakingNews.aspx?id=379656

This is a long way from 2005, when articles like this from NRN were legion:

Big high-end steakhouse chains are primed for 10% growth

http://findarticles.com/p/articles/mi_m3190/is_9_39/ai_n13251038/

Most steakhouses have struggled to fill seats and stem bloodletting from eroding covers. Some, like Palm Steakhouse, are expanding to foreign and other markets. Palm has recently opened a London restaurant and is planning several more in Europe and are eying the Pacific Rim. They are also opening Palm Bar and Grill, a micro version of the venerable restaurant, in JFK’s Terminal 4 (slated for opening last month) and, by all accounts, plan more in the future.  Morton’s is reaching even higher, announcing in-flight offerings from their famous brands. They’ve also offered a Filet & Lobster Tail Dinner via Lobster Gram, a full dinner for 2 delivered to your door for $149.00. You still had to cook it, but they tossed in a couple of “signature engraved steak knives” and Morton’s Signature Grilling Salt and clarified butter.  This program, started in November 2008, has since been discontinued. Guess it wasn’t the hit that they hoped for. 

Independent restaurants have also struggled. One ingenious thing that has been done in Nashville is Nashville Originals, an organization of like-minded indie restaurants designed to promote dining locally as well as offering the benefits of increased scale. While it’s been around for several years, it’s still a nascent organization. Its on-line presence is still a bit primitive and the promise hasn’t been fulfilled quite yet. When they first started, there was talk about possibilities like shared purchasing in order to get better prices, but I’m not sure that this promise has ever come to fruition (it’s probably logistically difficult). About the only shared thing that’s really evident other than the occasional press release is a gift certificate that can be used at any of the member restaurants. I hope that they can get some traction, but it looks like the day-to-day challenges of running an independent restaurant are preventing some serious traction. It’s probably like trying to herd a clutch of cats. Here’s their website:

http://www.nashvilleoriginals.com/index.php

As you can see, there’s definitely improvement to be made there.

I’ve noticed that there are such organizations in various communities throughout America. Hopefully, they can offer some benefits that will help indie restaurants through this challenging economic landscape.

Image found at http://positivesharing.com/2006/03/make-your-business-happy-and-rich/

Steakhouses work the bar angle to attract guests

Premium steakhouses are using expanded bar offerings, in both the food and drink realm, to bring guests back to their dining rooms and bars. They are offering smaller and less expensive variations on their normal fare, almost in a tapas style. They are also rolling out signature drinks in order to capture a younger demographic.

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Morton’s has their “Power Hour” in selected locations. They have some value-priced $5 glasses of wine, $7 “Mortini’s” (selected Martinis, Cosmopolitans and Mojitos) and they are offering $6 “bar bites”, including miniature crab cakes, trios of little burgers, four tiny filet mignon “sandwiches” and “iceberg wedge bites”.

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The Palm Steakhouse has upped the ante with their “Prime Times Bites” bar menu. They also have trios of “sliders”, theirs being Kobe beef. They have a smaller version of their massive fried calamari bowl, plus they have mini crab cakes, a trio of steak “capri” sliders (steak, basil and mozzarella) and little Philly steak bites. Prices range from $7 to $12  but from 5-7pm and after 9pm, they sell for the unheard of price of $3.50 (three Kobe beef sliders for only about 50 cents more than Krystal or White Castle burgers?!!??) They have also done an upscale makeover of the look of their bar tables . This is rolling out nationwide as I write this, having been tested in certain locations.

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Fleming’s Steakhouse has their “5 for $6 ’til 7” promotion in their bar. For $6, they have 5 premium cocktails, 5 value priced wines and 5 appetizers such as “tenderloin carpaccio”, seared ahi tuna and “wicked cajun barbecue shrimp”. This is served from 5pm to 7pm.

These are examples of fresh thinking in the steakhouse sector. They augment the usual summer special dinner deals that chains have been offering during their slower months and are intended to expand their demographic.

How things have changed since 2005 when Nation’s Restaurant News ran an article entitled “Big high-end steakhouse chains are primed for 10% growth”. Here’s a snippet of that optimistic report:

“Demand for high-end steakhouses seems to have continued to rise in many markets across the country. ‘I’ve never seen anything like this in 25 years,’ said Dave Cattell, chief development officer for Ruth’s Chris, the 86-unit chain based in Metairie, La. ‘There are lots of opportunities, and I don’t see any end in sight.’ “.

You can access the rest of the article here:

http://findarticles.com/p/articles/mi_m3190/is_9_39/ai_n13251038/?tag=content;col1

Upscale chains are taking heavy hits

Restaurant News Logo

From Nation’s Restaurant News’ Breaking news:

                                                  

NEW YORK (Aug. 7, 2009) High-end restaurant results are hitting new lows as slowed consumer spending and continuing budget cuts by corporate clients eat away at earnings.

McCormick & Schmick’s Seafood Restaurants Inc. and Morton’s Restaurant Group Inc. both said this week that lower traffic and resulting double-digit dips in same-store sales drove year-over-year declines in second quarter revenue and profit.

Though McCormick & Schmick’s of Portland, Ore., is known for seafood and Chicago-based Morton’s, for prime beef, the two high-end casual-dining operations shared some challenges in the latest quarter. Morton’s, operator of the Morton’s The Steakhouse chain, exhibited the greater struggle, however, as it reported this month a loss for the quarter and greater erosion in same-store sales. McCormick & Schmick’s was able to maintain a profit, albeit a much lower one than a year ago.

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The results followed last week’s report from high-end operator Ruth’s Chris Hospitality Group, which also included double-digit declines in sales and profit. 

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High-end seafood operator The Oceanaire Inc., which runs 12 locations of The Oceanaire Seafood Room, filed for Chapter 11 bankruptcy protection in early July and closed four locations. The sector has taken severe traffic hits not only from consumers that have tightened spending, but also from corporate clients that have cut back on travel and entertainment expenses.

Read the rest of the article here:

http://www.nrn.com/article.aspx?id=370874

This shows the challenges that restaurants are struggling with in this tight economic times. As you can see from some of my posts, there are restaurants that are responding to the challenge. And Morton’s, Ruth’s Criss and McCormick and Schmick’s are a top-flight operators that will find ways to regain profitability. However, it’s important for both restaurant workers and patrons alike to realize that we aren’t in Kansas anymore, Toto.

It’s not quite as bad as this though:

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Morton’s settles wage-and-hour claims

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Morton’s settles wage-and-hour claims By Mark  Brandau

 

 

CHICAGO (July  24, 2009) Morton’s Restaurant Group, the Chicago-based parent of the 78-unit Morton’s The Steakhouse chain, announced the settlement of several wage-and-hour claims dating back to 2003, including a class-action suit filed against the company in 2005.

 Morton’s denied the allegations of the claims, but said it settled in order to spare the company further legal fees and management time devoted to the litigation.

Under the term’s of the settlement, Morton’s will pay an undisclosed amount of cash to the plaintiffs over a four-year period as well as issue preferred stock, which will have an aggregate liquidation preference of $6 million, following the court’s approval.

Read the rest of the article here:

http://www.nrn.com/breakingNews.aspx?id=370364

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Morton’s – The Steakhouse forced to close three locations

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From Nation’s Resaurant News Breaking News:

Morton’s shutters three restaurants

By Dina  Berta

 

CHICAGO (July  14, 2009) Morton’s Restaurant Group, whose namesake steakhouse chain has suffered dramatic drops in sales this year, recently closed three of its 81 restaurants.

Morton’s spokesman Roger Drake on Tuesday cited “a strategic assessment of trends” for the closures of restaurants in Southfield, Mich.; Westchester, Ill.; and Minneapolis. The Michigan and Illinois stores closed June 26 and 27, respectively, and the Minneapolis location closed July 3.

For the closings in Minneapolis and Westchester, a reported company statement alluded to those restaurants not meeting “base financial targets needed to support continued operations.”

Upscale steakhouse chains like Morton’s have seen falling customer traffic as corporate expense accounts shrink and consumers cut back on spending. In May, Morton’s reported that same-store sales plummeted 24.1 percent for the April-ended first quarter and said it expected same-store sales to continue to drop for the rest of the year.

“The recession affects convention business,hotel occupancy and air travel, which all have a direct correlation on our business at Morton’s,” Thomas Baldwin, chairman and chief executive, said in a statement in May.

Read the rest of the article here:

http://www.nrn.com/breakingNews.aspx?id=369808

The high-end chain steakhouse segment hasn’t proved immune to the economic climate. Ruth’s Criss has reported large losses, Capital Grill has suffered crippling quarterly drops in profit, and even the Palm, which seems to be outperforming the rest of the segment, has had to close two under-performing restaurants itself in the past couple of years.

Steakhouses are trying to attract new guests and save regulars by offering such things as half-price wine on certain days, inexpensive bar menus, and prix fixe dinners at reduced prices.

This is not symptomatic just of the high end segment. Mass market casual chains have also been hit hard and are trimming their properties as well. They are also being aggressive with coupons, 2-for-1 entree specials and special promotions.

While restaurants are being far more accommodating to the dining public than before, it isn’t totally a case of the guest getting what they want at all costs. Restaurants are getting closer to what they should always be, i.e. welcoming and flexible toward the guests’ needs and appreciative of their patronage. But one unintended consequence that the guest might need to be aware of is that restaurants are occasionally trimming their service away from their posted hours, especially in high-end restaurants. If you are dining late, it’s more important than ever to make a prior reservation  because you might walk in at 10:15 to find that the restaurant that normally closes at 11pm has already closed their kitchen. If you make that late reservation, the management can plan accordingly. These days, if the last table is at 8pm and there are only one or two walk-ins before 9pm, many managers now have permission to close the kitchen early at their discretion.

So, while guests might rejoice that they seem to have the upper hand in their relationship with the restaurant, there’s another side to the coin.

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