Struggling restaurant chains try cheap eats to lure diners

The nation's struggling full-service restaurant chains seem to have found only one sure-fire way to lure folks in the door: cheap eats.

Chili's is about to roll out meals for less than $7. Texas Roadhouse is offering $7.99 meals. T.G.I. Friday's has $9.99 entrees. Outback has rolled out some entrees at $9.95. Even upscale Morton's Steakhouse has a value deal.

Almost every chain in the $183 billion full-service dining industry is waving a meal deal that beckons customers with low-ball prices — with the hope folks spend more once they come in. Times are so tough that some deals fall within a few dollars of fast food.

"The fact that you can eat a full-service meal for under $10 is incredible," says Christopher Muller, hospitality professor at University of Central Florida. "You couldn't even eat this cheaply in 1992."

Chains have little choice. Cash-strapped consumers are holding back on eating out. Same-store sales have been falling for 14 months and were down 3.6% in February, says researcher Knapp-Track.

"People are mourning the death of their money," explains restaurant consultant Malcolm Knapp.

Here's who's doing what:

• Chili's. On April 6, the chain will offer a "10 meals for under $7" deal. Officials declined to discuss details until closer to rollout.

• T.G.I. Friday's. This month, Friday's began a promotion featuring 10 entrees priced at $9.99 — in some cases a 29% price cut. "We need to offer deep value to drive traffic," says Andrew Jordan, marketing chief.

• Applebee's. Since mid-November, the chain has offered a "2 for $20" special of two entrees and one appetizer. "While we can't fix the economic challenges, we are offering … value," says Shannon Scott, marketing chief.

• Outback Steakhouse. For months, the chain has marketed 15 meals for under $15. "We decided to get back to the DNA of the brand," says Dan Dillon, marketing chief.

• Texas Roadhouse. The chain recently launched an "Early Dine for $7.99" promo on weekdays. "We're trying to drive early-week traffic," says marketing chief Chris Jacobsen.

• Cheesecake Factory. A "Small Plates and Snacks" menu includes a $4.95 Pizzette, a flat, football-shaped pizza some folks are ordering as a meal. "We're making Cheesecake Factory cake more accessible," says Mark Mears, marketing chief.

• Morton's. Even Morton's has got a $99.99 steak and seafood dinner for two and $6 mini-burgers at the bar. (Average check at Morton's is $97 per person.) The goal, says CEO Tom Baldwin, is to drive sales. "These are unprecedented times."

READERS: How are you saving money while dining out?

Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...