Recession Got Your Restaurant Down? Savvy Chains Bite the Bullet and Redesign

Last Updated Apr 20, 2010 12:09 PM EDT

When the economy gets tough, many restaurants put a freeze on innovation, choosing to hunker down and cut costs until the bad times end. That's usually a bad idea, as eateries can easily get stale and begin to bore diners.

Several smart restaurant chains have instead used the slow times as an opportunity to rethink their store environments and reposition their restaurants for future success.

Changing your look is always a risk, but there's a rule in retailing that you need to freshen up every five to seven years or so or your brand gets stale. If it's done right, the rewards can be substantial.

Ruby Tuesday (RT) recently began reaping results from the family-dining chain's brand overhaul begun back in 2007. The chain invested $100 million to modernize its look and develop more-expensive menu items in a bid to lure more upscale diners and improve sales and profits. It's paying off -- the company recently notched its best sales quarter in three years and tripled its net income to nearly $18 million.

Four other restaurant chains are rolling out new designs now. Many of the changes emphasize freshness, warmth and a layout where diners can watch their food being made. Here's a look at the companies and their initiatives:
  • Jack in the Box (JACK) subsidiary Qdoba made its name with a look that said "modern nouveax Mex," as CEO Gary Beisler recently told Nation's Restaurant News. You can see the old look at right here -- dark-red walls and big murals of old Mexico predominated. The new look -- that's it up above right -- was created to communicate the company's evolution to an "artisanal Mexican kitchen" feeling. The emphasis is on communicating the freshness of the ingredients with cues such as having a whole avocado on display in the food-prep line. The old-timey murals are gone, replaced by a wall of small black-and-white photos of Mexican scenes. Wood-look tables replaced more industrial stainless-steel ones, and new uniforms and music round out the upgrade. The company began work on the new prototype just as the economy tanked, but kept at it and unveiled their new model a few weeks ago in Chicago.
  • Steak n Shake, owned by Biglari Holdings (BH), unveiled its new design for future eateries earlier this month. It's a retro-upgrade that salutes the company's signature folding hat in its roof design and opens up the kitchen so diners can watch their steakburger being grilled and their milkshake made. CEO Sardar Biglari said he hopes to open 1,500 new units.
  • For its part, Columbus, Ohio-based family-dining chain Bob Evans (BOBE) launched a retail and carryout division in December for its restaurants called Taste of the Farm. The ministores, designed by Chute Gerdeman Retail, use antique-white, old-fashioned display cabinetry and lettering that evokes a down home, fresh-from-the-farm feeling.
  • Privately-owned, 300-unit bakery chain Bruegger's Bagels introduced its new look at the end of April with units in Charlotte, Cincinnati, Milwaukee, Minneapolis and Pittsburgh. The company plans to complete 50 remodels this year, renovating hundreds of its bakeries and spending more than $10 million over the next three years. It has been seven years since the last time the chain changed its store design. New in the interior -- a warmer, cozier, more colorful look with a brick and stone hearth where customers can watch the bagels being kettle-boiled and then baked.
Photos courtesy of Qdoba
  • Carol Tice

    Carol Tice is a longtime business reporter whose work has appeared in Entrepreneur, The Seattle Times, and Nation's Restaurant News, among others. Online sites she's written for include Allbusiness.com and Yahoo!Hotjobs. She blogs about the business of writing at Make a Living Writing.

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