Casual Chains

Starbucks recently lowered some prices on its drink menu, but now the chain is making headlines for just the opposite — double-charging customers for their purchases. On Friday, May 22, and half of Saturday, May 23, the coffee chain unknowingly double-charged a million customers in 7,000 stores for their debit and credit card purchases. Starbucks explained that most of its customers never noticed the "settlement processing error" — although consumers' receipts indicated the correct amount had been deducted, later twice that figure was taken out of the buyers' accounts when stores settled the transactions at the end of the day. Starbucks is hoping to reassure its patrons that the problem has been resolved. "As soon as we noticed the error, we had it fixed right away," a spokesperson for the company said. If you're concerned you were affected by this error, Starbucks is recommending that you contact its customer service department. Since I visit Starbucks daily, I'm checking my bank statement to make sure I wasn't charged double. Were you affected by this? Are you surprised that an error of this scale could occur within a company as large as Starbucks?

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America's largest coffee chain has decided to jump-start its own eco-friendly food revolution: Earlier this week, Starbucks announced it would be rolling out a new food menu on June 30 as part of its "Real Food. Simply Delicious" campaign. And yesterday, the chain said it would install new water faucets in its stores as part of an environmental initiative.

The company is reworking 90 percent of its baked goods, and eliminating high-fructose corn syrup, artificial flavors, and food coloring from its products. Starbucks is also removing preservatives from items whenever possible, attempting to mimic the number of ingredients used in homemade baked goods. In addition, this Summer the coffee titan will test the viability of a Frappuccino formula that appeals to health-conscious consumers, and the chain will begin selling salads. Despite premium prices of natural ingredients, the company maintains these changes will not affect prices on its food menu.

Yesterday, Starbucks also revealed a plan to install new water faucets that meter out water across all US stores by September, a change that could save each café up to 150 gallons of water a day. It hopes to expand this green initiative internationally by Fall.

The coffee company continues to make frantic changes in hopes of reviving sales. I'm skeptical about whether these strategies will truly spark sales — since things like instant coffee, ciabatta-bread sandwiches, and value meals really haven't. Still, I'll admit I hope that health-conscious Frappuccino comes to market. What do you think of these changes?

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Regardless of its location, price point, or popularity, no restaurant has remained untouched by the deteriorating economy. While many high-end restaurants have made adjustments, some of the most drastic changes taking place are happening between fast and casual food chains.

Casual restaurant chains such as Applebee's, Chili's, and TGI Friday's have desperately tried to keep sales steady with bargain deals. Applebee's started the trend by appealing to cash-strapped diners with a limited-time offer for a large appetizer with two entrees for just $20. Chili's joined in soon after with a "ten under $7" value menu. Earlier this week, TGI Friday's slashed the prices of all sandwiches and salads to a mere $5.Ironically enough, fast food chains have focused on premium items. Late last year, Burger King aimed to go higher-end with a new line of ribs, and this August, McDonald's is coming out with a one-third-pound Angus beef burger that's priced at $3.99. The number one fast food chain has also been selling specialty coffee drinks at its McCafé stores.

As both segments expand their food offerings, the casual chain and fast food sectors have become somewhat redundant. Have you frequented more fast food or casual chains lately? Which do you think has a better business model?

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Number two fast food chain Burger King has been testing a new line of premium items. This includes ribs and thicker burgers, made with grills, batch broilers, and other costly new kitchen equipment.

The fast food chain's decision to move in the direction of higher-price items comes at a time when the casual restaurant industry is struggling. National chains have seen declining sales across the board; Burger King is hoping to capitalize on the industry's market share.

CEO John Chidsey said he wouldn't elaborate further "because some things are still under wraps," but the chain's gourmet menu items could be advertised as soon as next Summer.

Still, Burger King has no plans to lose its value menu. "We work the value for the money equation on both ends of our menu," said Russ Klein, Burger King's president of global strategy.

Does Burger King's new strategy surprise you? Do you think the corporation will manage to draw business away from the casual restaurant business?

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Darden Restaurants announced that beginning next week, it will install wood-fired grills in all 680 Red Lobster restaurants.

The company has been testing the wood-grilled menu for over a year, and will train 3,500 employees on the grills. New items will be going on the menu, such as wood-grilled lobster, wood-grilled sirloin and shrimp, and wood-grilled fish. According to the chain's president, Kim Lopdrup:

This is the most comprehensive culinary and menu change in Red Lobster's history. Wood-fired grilling introduces our guests to a whole new way to enjoy seafood.

Red Lobster's announcement to add these costly new grills comes at a time when the casual restaurant chain industry has stumbled. Chains such as Bennigan's, Steak & Ale, Ponderosa, and Bonanza have all filed for bankruptcy protection in the past year. Do the wood-grilled menu items sound appetizing to you, and will they be enough to turn Red Lobster around?

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Two months ago, we reported the end of restaurant chains Bennigan's and Steak & Ale. Well, we've just learned that they're coming back to life! Private equity firm Atalaya is buying the two brands and their trademarks. It will partner with the Bennigan's franchises still standing to grow business, as well as try to reopen company-owned Bennigan's locations that closed after the bankruptcy.
The Steak & Ale brand closed in its entirety during bankruptcy, but Atalaya intends to leave the option open in the future for franchisees to open independently-operated Steak & Ale restaurants.

According to Atalaya managing director Joel Holsinger, the key to success this time around will be the new menu that's being developed: it will focus on quick pub fare, such as sandwiches, burgers, onion rings, and booze.

While I haven't been to a Bennigan's or Steak & Ale in years, some of you must be excited to hear about your Bennigan's potentially reopening. Do you think the menu overhaul will make the chain profitable again?

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Restaurant chain Ruby Tuesday announced its plans to destroy one of its locations next Tuesday in an explosion that will be broadcast live on its website. The explosion signals a new era for the chain, something the company has been trying to do with its slogan, "It's a brand new Tuesday."

The bomb will go off on Aug. 5 at 3 p.m. EDT, at an undisclosed restaurant location which is the last remaining "old-style site." The overhaul includes a new "simple, fresh, American dining" menu and revamped décor. The makeover was the plan of David Oakley, who said:

They have redone everything . . . gotten rid of all the bicycles hanging from the recycles, the surfboards and old movie posters to point where there wasn't an inch of space.

With an oversaturated sit-down restaurant market and an increasingly poor economy, the casual dining industry has been reeling. This campaign comes on the heels of an announcement two days ago that Bennigan's would be closing almost 300 restaurants after more than 30 years. What do you think about the bombing? Will you watch?

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For national chains Bennigan's and Steak and Ale, there is no pot o' gold at the end of the rainbow: The companies filed for bankruptcy protection and shut down all 292 corporate locations yesterday.

For the two bar and grill chains, the downhill slope has come steep and fast. In June, parent company Metromedia Restaurant Group asked lenders to restructure its debt, as earnings were lower than expected. A week ago, the group's CEO resigned. And yesterday, all of the corporate locations for the Irish-themed taverns and country steakhouses appeared empty. The company stated:

Similar to other members of the casual dining industry, current economic and industry trends have adversely affected the group's overall financial performance.

Fans need not despair just yet — for now, the franchise locations will stay open. But the question remains: for how long?

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