Upscale Casual Segment May Benefit from Down Economy

Published on
December 22, 2008

Seafood restaurants in the “upscale casual” segment are better positioned in 2009 than fine-dining steak and seafood eateries, says an expert who follows the category.

Because businesses are expected to trim travel and food expenses next year, chains such as Braxton Seafood Grill in Oak Brook, Ill., and Kona Grill in Scottsdale, Ariz., will present a value for guests, says Darren Tristano, executive VP of foodservice research and consulting firm Technomic.

“Businesses will look to cut back on their total expenses, and they might be trading down to a better value,” says Tristano. Large food supply companies have already said they are significantly reducing their food and travel expenses, he adds.

In 2009, Technomic expects a shift from upscale dining, which has an average check of $50 to $100 per person for dinner, to “upscale casual” outlets such as McCormick & Schmick’s, which average $25 to $50 per person at dinner.

“Steak restaurants such as Morton’s and Ruth’s Chris will probably be hit hard,” says Tristano.

In contrast, “upscale casual” concepts offer a way for employees to go out and celebrate a birthday or other event, or for companies to take clients out, for significantly less than for dinner at a chain such as Ruth’s Chris.

Braxton Seafood, for example, which has seven units in Chicago and other metropolitan areas, offers $5 martinis and half-price appetizers at the bar during its daily happy hours. Guests can also purchase one-pound lobsters for $11 each at the bar during happy hour, and oysters, typically priced at $2 each in the sit-down area of the restaurant, for 75 cents each.

“Happy hour menus have become very popular in the past two years. They are now going to become a driver [for business] and they are going to cannibalize on sit-down business,” says Tristano.
 

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