Romano’s Macaroni Grill, newly spun off from Ignite Restaurant Group, appears to be going all-in on its Romano’s Kitchen Counter initiative, expanding the express-lunch service to dinner as well. The appeal of adopting fast-casual tactics to target fast-casual consumers is understandable. But Romano’s is charging ahead with its “concept within a concept” initiative, even though the full-service segment is littered with “fast casualties”—notably Red Lobster, Mimi’s Café and Bakers Square.
When chains act like a fast-casual restaurant trapped in a casual-dining brand’s body, they risk confusing the guest and their own operations. Red Lobster ended its Seaside Express test at two central Florida restaurants after about six months in late 2013, after deciding to focus on the core casual-dining experience.
Macaroni Grill’s new owners say housing both fast-casual and casual-dining service styles in the same building lets the brand offer service proportional to a guest’s needs, from quick on-the-go dinners to a sit-down, full-service celebration. The risk is that guests could start to perceive the brand more as the Kitchen Counter than as the Macaroni Grill, and routinely trade down to $7 lunch options and $9 dinner offerings.
Brand President John Gilbert III and Ignite CEO Ray Blanchette said the Kitchen Counter format initially has lifted sales and traffic at converted units. But over the long term, we will need to watch the effects a tacked-on fast-casual element has on unit economics and employee retention. Will fast-casual price points pay the rent on a big casual-dining box? Will experienced servers stick around if they’re getting fewer tips as more people pay at the counter?
Nobody can fault Macaroni Grill for wanting to guard its flank from fast-casual competitors. Technomic’s recent Future of FSR: Family & Casual Dining Consumer Trend Report found that, while 33% of people who recently visited a casual-dining restaurant would have opted for a different varied-menu casual brand, 44% would have visited a fast-food place instead, and 28% would have considered a fast-casual restaurant. Diners aged 18 to 34 were much more likely than their older counterparts to drift toward limited-service restaurants, particularly regarding fast-casual brands.
The report also found that price was the top deterrent for consumers who are visiting full-service restaurants less often. Nearly two in three of those visiting traditional casual-dining restaurants less often say it’s because they have less money to spend on dining out, and one in three say it’s because prices at those chains are too high.
Since fast casual is eating casual dining’s lunch to some degree, it makes sense for Macaroni Grill to want to adopt elements that consumers find appealing. But because of average-check erosion and operations complexity, it’s worth considering an alternative path: a fast-casual spinoff, like Red Robin’s BurgerWorks. Similar moves will start popping up in family dining as well, including a test of a fast-casual variant for Cracker Barrel and growth of Denny’s spinoff, The Den.
It’s too early to close the book on Romano’s Kitchen Counter as a concept within a concept, but more often than not, chains have found that plan to be a riddle wrapped in a mystery inside an enigma.