Restaurants try catering to boost sales

andertoons-sales-droppingUSA Today details: The restaurant industry has decided there’s only one thing left to do with so many financially strapped folks refusing to go to eat out at restaurants: bring the restaurants to them.

Some of the nation’s most familiar restaurant chains — from fast food’s Subway to fine dining’s Ruth’s Chris Steak House — are pushing catering business this holiday like never before.

“It’s been an abysmal year for the restaurant industry,” says Melissa Wilson, principal at the research firm Technomic. Restaurants reported declining same-store sales for the 17th-consecutive month in October, reports the National Restaurant Association. Some 61% saw sales decline in October at stores open at least one year.

So the race is on to find any new revenue stream — even if it changes the way a restaurant operates. “The sheer number of restaurants now with a presence in the catering space is amazing,” Wilson says. Catering is a $33 billion opportunity for the industry, she says. People may be eating out less often, Wilson says, “but there’s certainly no embarrassment about bringing a restaurant platter to a potluck dinner.”

Even in a pinched economy, sometimes a catered meal is a necessity. In a recent survey conducted by Subway, 40% of consumers said the hardest part about having family over for the holidays is feeding them.

So it’s no surprise that catering is hitting all categories this holiday:

•Fine dining. Ruth’s Chris Steak House, which suffered a 24% drop in sales in the third quarter at company-owned units open at least one year, began to test catering in Florida and Southern California last month. It will roll the program out to about half of its 129 restaurants in 2010, says Cheryl Henry, vice president of new business.

The chain will do weddings as large as 300 guests or drop off food for a home party, culinary Vice President Jim Cannon says.

•Casual dining. With same-store sales down 8% for the third quarter of 2009, California Pizza Kitchen has revamped its catering menu and given it new emphasis. “It’s challenging times that bring you into these things,” says Larry Flax, co-CEO.

It even dedicated an entire division to catering six months ago and hired a sales team and catering director, he says.

•Fast-casual dining.Panera Bread has had a good year, with same-store sales up nearly 7%, but catering is helping to drive awareness of new products: cobb salads and macaroni and cheese.

“The economy has shown us how much we have to go out and get the business.” says Rick Vanzura, co-chief operating officer.

•Fast food. Subway is giving an extra push to catering. Platters with five foot-longs (each cut in half) start at $25.

Two catering orders each day over a weekend “can mean an extra hundred bucks in sales that you wouldn’t have had,” says Tony Pace, who oversees Subway’s consumer marketing arm.

Wingstop is making a big catering push. It’s focusing on large orders of 100 wings or more. Catering, says Andy Howard, chief marketing officer, could be its largest growth initiative for 2010.