Chin Up in the Downswing

positive economic news during recession

“Ate” Is Great: Homey Atmosphere, Affordable Prices Keep Restaurants Flush

May 27, 2009 08:00 PM
by Anne Szustek
Thanks to deft management practices and affordable prices, some restaurant chains are weathering the recession well.

In Surviving Recession, Customer Service Is Essential

Customer service, streamlined corporate operations and renewed focus on food quality are common threads in the recession-era success of several chains profiled by trade magazine Nation’s Restaurant News, writes Blue MauMau, a site geared toward franchise investors. Among the 20 restaurants that Nation’s Restaurant News writes “are using numerous moves in an effort to declare checkmate on the economy” are McDonald’s, “take-and-bake” pizza chain Papa Murphy’s, sports bar Buffalo Wild Wings, Panera Bread and burger chain Five Guys.

Buffalo Wild Wings stock has been getting attention for some time now. The March 27 edition of “Chin Up in the Downswing” profiled the chain’s bullish results during the last three months of 2008.

P.F. Chang’s Survival Niche

Another casual dining survivor: P.F. Chang’s, the terracotta statue-decorated restaurant chain Consumerist writes is “easy to dismiss … as the Applebee’s of Chinese food.” But its bill of Asian-inspired fare is tempting both casual dining fans looking for an affordable extravagance as well as market watchers.

Like the five restaurant chains mentioned above, honed operations have helped to keep up balance sheets at the chain’s two restaurants, P.F. Chang’s China Bistro and the lower-priced Pei Wei Asian diner. The company’s first-quarter 2009 operating margins at the P.F. Chang’s China Bistro’s 190 locations were up to 14 percent from a year earlier; total profits for both chains were up 38 percent year-on-year during the first three months of this year. Meanwhile, P.F. Chang’s price-per-share has doubled since November.

Part of P.F. Chang’s secret, writes Slate, is its concept of familiarizing East Asian cuisine to Americans who might not otherwise find the cuisine palatable. “It’s very consciously designed to cultivate an appeal to mainstream America,” Jennifer 8. Lee, author of “The Fortune Cookie Chronicles: Adventures in the World of Chinese Food,” tells Slate. For example, rather than offering traditional dishes such as bird’s feet, the menu includes desserts such “the Great Wall of Chocolate.” The chain’s recent price reductions, such as a two-person dinner for under $40 haven’t hurt its popularity either.

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