Tuesday, September 22, 2009 at 10:04PM FYI: Will Macaroni Grill clip customers by cutting calories?
The average student of commerce thinks the typical, on-going business to be run well--if not very well. Such a situation is usually a rare event--and certainly does not even come close to applying to Romano's Macaroni Grill!
A few days ago, there was a Wall Street Journal article describing how Macaroni Grill, under the leadership of new CEO Bran Blum, is trying do what seems very misguided: substantially trim the calorie count of its menu items--and re-vitalize sales in the process. The logic manifest behind this strategic decision goes something like this: the 226-store chain, after posting 12 consecutive quarters of declining sales, has decided that the recent rash of bad press it has encountered [which directed public attention to the fat-rich dishes it serves] accounts for the loss of customers. Thus, the strategy for re-claiming diners and market share is to make the menu more healthy. However, this plan, although well intentioned, is neither logical nor, from a marketplace perspective, very promising.
First, if one were to check the ratings by independent authorities on which restaurant chains most flagrantly flaunt unhealthy offerings, Macaroni Grill--while clearly on the list of undesirable places to eat healthy food--is far from leading the pack. Other chains take the prize for even higher-calorie items on their menus, 'way ahead of Macaroni Gill...the likes of Olive Garden, Cheese Cake Factory, Applebee's, and Chili's!
A case in point: The Center for Science in the Public Interest list of worst chains for healthy food offered ranks Macaroni Grill 10th, after the likes of Burger King, Carl's Jr., Denny's Dairy Queen, Ruby Tuesday, Chilis, Uno's Chicago Grill, On the Border, and others. True, Romano's has been featured more than its fair share of times on news and general interest shows for high-calorie items, that spot-light seems to lead management to think that if they simply exorcise the calorie demons from the menu, that such amends will bring back customers.
The truth is, that's simply not going to do the job--because that's not the problem--and, likely, will alienate its remaining customers at the same time. Let's get a few things straight:
[1] Customers who dine out, on average, don't really care about calorie counts--their dining out to get good tasting food and have a pleasant dining experience, not to loose weight or get fit! America's never been fatter; that's not a good thing, but only a few seem to care at this point in time--and most of those were not Romano's customers in the first place! People who want healthy food mostly stay home.
[2] While no corporate executive is--or should be--indifferent to adverse publicity and hostile news coverage--the handful of people who watched a TV show that talked about Macaroni Grill's menu in less than positive terms don't account it 12 quarter losses in patronage. If you took all the people exposed one way or another to the negative reportage on Romano's, it would be a drop in the bucket of casual diners in Romano's universe. Furthermore, it could be argued that when many heard about the menu items that were high in fat hardly cared that much in the first place!
[3] Just as surely as the calories get purged from the menu, the taste and texture of the food at the Grill will change for the worse--from the epicurean's point of view--driving even more customers away. All of the Grill's earlier success was, in large part, predicated on a menu that customers sought out and returned over and over again to order. Change the kind of food served--both practically and perceptually--and the chain seems on a fool's mission to also more than just the menu.
[4] When in 2004 Ruby Tuesday trimmed calories from various items--and then posted calorie counts of same in a re-vamped menu--such changes brought about a precipitous drop in same-store sales, leading Ruby Tuesday to stop posting nutritional information in its menu. If Macaroni Grill thinks that its soon-to-be more lean and calorie-attractive offerings will attract customers, it'll likely have to tell its diners that it's healthy--and, if the experience of Ruby's holds true--likely drive even more customers away!
[5] Changing what has historically been a successful menu offering in a secular down-turn of casual dining sales [of about 6%] is tantamount to tampering with both the product and the served segment--there couldn't be a worse marketing strategy to pursue during lean economic times! Other variables seem far more promising to fiddle with: promotional emphasis, advertising expenditure levels, pricing incentives, new product offerings--there are a lot other buttons to push than altering what attracts casual diners to your restaurant in the first place.
Mr. Blum and crew are well-intentioned and, frankly, to be commended on contributing to the common-good by providing healthier food. That's not in question; reversing a sales decline, however, is another story. Let's face it head-on, getting healthy food was never why anyone went to Macaroni Grill in the first place--and now that it's likely to be there in greater array is not what's going to bring very many of those people back again! Furthermore, the weight-watchers and fitness crowd never were tempted to go--and, even after all the calorie-cutting changes--still won't be inclined to dine at Macaroni Grill.
Yes, profit-wise, Romano's very easily could go hungry by cutting calories--and customers--in the process!
Reader Comments (2)
Interestingly, Whole Foods is another company revamping its product line to become more healthy. Its CEO, John Mackey, has undergone a personal shift to more healthy eating and living. When he began to look at his diet, he realized that Whole Foods actually has a product line-up that included many goods with high levels of saturated fat and cholesterol. I think Whole Foods has less risk than Macaroni Grille in trying to shift its products, as its image is much more closely tied to healthy living. Still, it will be interesting to see how customers react if Whole Foods lessens the availability of some of the very delicious, rich foods that it features in areas such as the cheese section, bakery, prepared foods area, etc.
There is no excuse for restaurants taking what is usually thought of as a healthy food and stuffing over 1000 calories into a single entree such as their scallop and spinach salad without indicating to customer that it is a double sized portion.
Restaurants have trained diners that it is OK to expect a lot of food and that it is perfectly normal to eat this much.
How do they expect people to eat responsibly when they promote such bad habits?