First Coast restaurants try to recapture customers with special offers

Nov 01, 2009 (The Florida Times-Union - McClatchy-Tribune Information Services via COMTEX) -- OSI | Quote | Chart | News | PowerRating -- Outback Steakhouse, a restaurant used to customers waiting to get in, has started offering buy-one, get-one-free coupons to bring the lines back to Tuesday night. On Lane Avenue, Sharon Moran has had to add more specials to the menu of Salty's Steak and Seafood and she's seeing people sharing those.

And when Bluefish Restaurant and Oyster Bar opens next month in Avondale where Sterling's once was, Richard and Evalee Grenamyer will offer a wide range of prices.

"That's the only way you can do it in this economy," said Evalee Grenamyer.

These have not been easy times for restaurants.

"We're just not getting the volume of people that we used to," Moran said. "And when they come, they're trying to cut back on much they spend."

So restaurants are having to resort to a variety of specials, coupons, fixed-price meals and other methods to get the customers back in.

The National Restaurant Association conducts a monthly survey of restaurants nationwide, and in its latest report, which came out Friday, 65 percent of owners saw lower sales in September 2009 than in September 2008. Twenty-two percent had higher sales.

The dropoff has been across the board. The number of casual dining restaurants, such as Chili's and Applebee's, has grown 14 percent in the United States since 2001, but some analysts think the growth has simply been too much too fast, especially with the current economic situation.

Brinker International, which reported first-quarter results Tuesday and owns 1,700 restaurants, most of them Chili's Grill & Bars, said customer traffic fell for the 21st consecutive quarter.

Meanwhile, revenue skidded 21 percent and profit sank 34 percent, despite efforts around its three-course meal deals for two, priced at $20. That sent shares down more than 11 percent Tuesday, and the stock continued to decline Wednesday, falling 48 cents, or another 3.3 percent, to $14.17 in late-afternoon trading.

Despite the roughly 5 percent decrease in customer traffic, the offer is bringing in customers, temporarily. But Stifel Nicolaus & Co. analyst Steve West said the deal is cutting into profits for diners whose dollars will be fleeting -- a trend that was apparent in September, when the company temporarily shelved the promotion and saw fewer customers.

"Customers are conditioned to 'shop the discounts,' as sales declined when promotions were absent -- a dangerous line to walk, in our view," West wrote to investors in a research note.

It's not just casual dining. Morton's the Steakhouse saw the second-quarter revenues of its restaurants drop an average of 26 percent over a year ago.

But Morton's has come up with variety of less expensive alternatives to its usual menu, where the average check is $97 per person and 80 percent of its business is on an expense account.

Small plates, called Bar Bites, are $5 each. A $49.99 three-course meal that used to be a summer special has been extended through the year.

In the past year, it's begun a Morton's By Day program, opening dinner-only restaurants for private breakfast and lunch meetings.

"You can do lunch in the $40 range," Morton's spokesman Roger Drake said, "which is much more reasonable than if you tried to host a dinner meeting. And people tend to drink less wine then."

Other restaurants are doing what they can.

The Grenamyers opened a Bluefish Restaurant and Oyster Bar in Memphis, Tenn., in 2005, and Evalee Grenamyer said they did well right away with entrees going to $30 and above. But in the past year or two, business started to drop off.

So they started what they called the Sunset Menu. Smaller portions were offered at lower price for a few hours late afternoon and early evening.

"We finally realized that we needed to do it all the time," she said.

They hope to open the Bluefish in Jacksonville just before Thanksgiving, in the same building where Richard Grenamyer operated Sterling's in the 1980s and early '90s. They're going to continue the smaller plates here as well as other entrees that start as low as $10 and go up to $30.

"You have to be able to offer fine dining and casual dining," Evalee Grenamyer said. "You have to be able to have the seats fill or you're not going to make it in this business.

"We'll still have crabs from 'The Deadliest Catch,' but they won't be $10."

Out on the Westside, Moran has seen a big dropoff at Salty's, the Lane Avenue restaurant she's run for 20 years.

"It's been pretty significant," she said. "Everyone's in the same boat, we're competing for the same dollar."

She's come up with a few things, including a $10.95 special with three meats or seafood and sides.

"A lot of people are going for that," she said, "and they're doing a lot of sharing. I don't mind."

And she's recently been bottling and selling the dressing they put on their house salad.

"I'll tell you," she said, "every little bit helps."

The Associated Press contributed to this report.

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