Leslie Patton (c) 2014, Bloomberg News. CHICAGO — Casual-dining restaurants, long known for boasting tome-like menus to appeal to a broad range of customers, are narrowing their offerings to focus on the cuisines they do best.
Red Lobster recently axed tortilla soup, while Chili’s got rid of pizzas. Olive Garden, meanwhile, stopped selling hummus. The changes are geared toward winning back customers from fast- casual eateries such as Chipotle Mexican Grill and Five Guys Burgers & Fries. In addition to keeping prices low, those chains have found that offering fewer items speeds up service, which increases sales.
“What we’ll see in the next five years is a lot of menu simplification,” said Keith Melker, a partner at Boston Consulting Group in Dallas who co-wrote a November report on the U.S. casual-dining industry.
The cleaned-up menus already may be helping. Sales at casual-dining chains rose 1.9 percent in October, the biggest gain since March 2013, and customer traffic turned positive, according to Knapp-Track indexes that measure revenue and guest counts. Sales may rise 3.4 percent to $95.1 billion in 2015, which would be the biggest gain since 2006, according to a September report from IBISWorld Inc.
The improving labor market and lower gas prices also are helping the casual-dining industry. The unemployment rate stayed at 5.8 percent in November, the lowest in six years. The average cost of a gallon of regular gasoline slid to about $2.53 on Dec. 15 in the U.S., down from a 1-year high of about $3.70 in April, according to AAA.
Revamping the menu was Red Lobster’s first move after it broke off from Darden Restaurants Inc. this year. The struggling chain last month cut nine items to focus on seafood. Gone are the fiesta salad, wood-grilled pork chops and spicy tortilla soup. Diners weren’t ordering those items, and they didn’t suit the brand, said Salli Setta, Red Lobster’s president.
“People are busy today,” Setta said. “They need to be able to make choices and get help in categorizing quickly to make a choice.”
Red Lobster hasn’t yet measured whether the new lineup, introduced on Nov. 3, has helped sales. Customers rated the food as tastier during testing, possibly because the kitchens had fewer items to concentrate on, she said. For example, cooks no longer have to make a portobello wine sauce to top the wood- grilled chicken that’s been booted.
Chili’s, the Tex-Mex chain owned by Dallas-based Brinker International Inc., this year nixed its Philadelphia cheesesteak sandwich and cut four pizzas, including a pepperoni and five-cheese variety. The pizzas didn’t fit with the Southwest image, Chief Executive Officer Wyman T. Roberts said on a conference call earlier this year.
“It wasn’t in our sweet spot,” he said.
In October, the chain also scrapped country-fried steak from its national menu — it’s now only available in some regions.
Olive Garden, owned by Orlando, Florida-based Darden, has been trying to stick closer to what it’s known for: gigantic portions of Italian food. Earlier this year, it began selling a create-your-own pasta, called Cucina Mia, which lets customers choose from six pastas and five sauces. The chain eliminated dishes that weren’t Italian classics, such as white-bean hummus and chicken skewers.
Restaurants’ mega menus grew out of a desire to overcome having a visit vetoed by one diner in a group who wanted a specific kind of food, said Peter Saleh, a New York-based analyst at Telsey Advisory Group. Years of adding menu items sometimes helped short-term sales but hurt the chains’ images, Boston Consulting’s Melker said.
“Now, the brands don’t stand for much, and the kitchens are slower,” he said.
Some restaurant chains have long held that less is more. Steve Ells, founder and co-CEO of Denver-based Chipotle, has stuck with the chain’s lineup of burritos, bowls and tacos and refrained from adding extras like breakfast and dessert. That formula has helped boost same-store sales more than 5 percent for the past four years and more than 10 percent in the past three quarters, according to data compiled by Bloomberg.
“Customers at Chipotle tend to get the same thing over and over,” Ells said on a conference call in 2012. “They might tweak it here and there and slightly vary it, but I don’t think our customers are necessarily looking for a radically new menu item.”
Chipotle shares gained 19 percent this year through yesterday, while Darden rose 2.8 percent and Brinker added 20 percent.
Restaurants’ variety isn’t as important as food quality, cleanliness, service, value and atmosphere, according to a study published in March by Nation’s Restaurant News and WD Partners.
That lesson is being heeded by more than just casual-dining chains. McDonald’s, the world’s largest fast-food company, said last week that it would trim eight menu items and five of its extra value meals to speed up service. Some of McDonald’s Quarter Pounder burgers and McWraps are among the items that the company has removed from menus in tests at a handful of cities around the country, Lisa McComb, a spokeswoman, said in an e mail.
Small chains are trying to slim down their menus, too. The 11-location Four Corners Tavern Group in Chicago has been getting rid of items in an effort to make other dishes tastier and faster. In October, the company’s Schoolyard eatery dropped about 20 percent of its menu, including quesadillas and BLT salads. The burger and taco purveyor now sells 25 main items.
Schoolyard already is getting food out to customers quicker — 15 minutes or less — which means higher revenue, said Ryan Indovina, director of Four Corners.
“The trap is thinking you need to have something for everyone,” he said. “We are focusing on what we do best.”