Restaurants cross lines as they struggle through recession
— -- The recession is jolting the restaurant industry to concoct who'd-a-thunk-it products that are redefining what even the industry's biggest brands stand for.
Pizza Hut, whose first name is pizza, is pushing pasta like there's no tomorrow. Home delivered, no less.
"This is a defining moment for the industry," says Hudson Riehle, research chief at the National Restaurant Association. "The financial crisis has brought with it a redefining of boundaries."
The driver is how the recession is eating into the heart of the $566 billion restaurant industry, which has seen 10 consecutive months of same-store sales declines and 19 consecutive months of falling store traffic.
"The industry has never faced a period of stress like this," says Alan Hickok, a veteran restaurant industry consultant. "There's never been anything this deep."
As a result, the big chains are spinning out new products about as fast as any time in the industry's history. "There are innovations, and there are spinovations," says Russell Weiner, marketing chief at Domino's. "When you're trying to grow a category, you need to bring in innovations."
Innovations beyond a chain's usual fare can build sales by helping to quash the "veto vote," the person in a group who can stop or divert a fast-food run because they don't want a burger or chicken or pizza. If all three items and more are on the same menu, it can thwart the trip-killer.
This is even more important in tough times, when consumers who eat out take on a "one-size-fits-all" mentality — wanting to go to just one place to satisfy the entire family's needs, says Christopher Muller, director of the Center for Multi-Unit Restaurant Management at University of Central Florida.
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