Saturday, January 19, 2019

Denny’s CEO’ and the Hypocrisy of Do No Harm

The retail landscape denial at Denny’s by the CEO John Miller simply mirrors restaurant industry trade magazines last gasp at retaining a following while denying that restaurant sector brand protectionism has become boring, yesterday’s news, and a food positioning disadvantage for consumers according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Consumers are dynamic not static.The fact is consumers are moving from the restaurant sector where company after company touts their brand power all the while year over year customer counts continue to dwindle.

Regular readers of this blog know consumers are migrating from the restaurant sector to C-store foodservice that is expected to grow another 6% in 2019. They are also going to new points of fresh food distribution the ilk of IKEA, Nordstrom, Ralph Lauren, and Club Store Costco as fresh food and coffee as preferred destinations. O’ yes recently legacy grocery sector service deli’s with redefined missions have elevated meals and meal components from bucks to fresh prepared food garnering customers.  
So, let’s look at what Denny’s CEO said and you will then get our view.  Miller said:
1.  Grocery stores like Whole Foods and Kroger have restaurants 'beating each other's brains out'
2.   Restaurants are competing to keep prices as low as possible and offering more deals, even as labor costs rise.
3.  "We're beating each other's brains out," Denny's CEO John Miller said of the restaurant industry's attempts to undercut rivals' prices.
4.Low grocery prices are contributing to restaurants' drive to keep prices cheap.
The fact is Denny’s and most U.S. legacy chain restaurants including the ilk of TGI Friday’s, Olive Garden, McDonald’s, Wendy’s, Carrols, Burger King and Pizza Hut look a lot like they did in 1989 than with the exception of a new furniture, paint, some technology that was add late in the cycle much still frustrates consumers according to Johnson.
Restaurant sectors CEO’s moto of do no harm has created a retail platform of yesterday, lacking the attributes of an evolving consumer.  Restaurant sector CEO’s are not “beating each other’s brains out” as Miller said.  They simply are acting like Neanderthals doing what they did in 1980, 1990, and 2000 and expecting that business model to work.  Customers have move on.  Today’s restaurant sector needs to evolve with a customer focus not a focus on Wall-Street metrics of the past according to Johnson.
All the while over-priced C-stores have put the roller grill on the back burner, lowered prices, introduced fresh food fast, at competitive price garnering consumers attention driving incremental customer migration from both the grocery sector and restaurant sector. 
The consumer price, service, value equilibrium has evolved the problem with many in the restaurant sector they are raising prices on yesterday’s products, refusing to innovate, rather than evolve their brands with customer relevance they continue to practice brand protectionism.
Our Grocerant Guru® has spoken at leading restaurant industry events including MUFSO, NRA and the National Restaurant Show has a ‘NRA Grocerant’ section.  Restaurant sector leader are well aware of the undercurrents of the evolving retail food market place.  However, it is easier for a Restaurant sector CEO to blame someone else or a competitor than to drive change within an outdate labyrinth of a legacy chain restaurant apparently.
The grocerant niche products and service provide the restaurant sector with a platform of options to deal with an impending increase in the minimum wage, for product stagnation, day-part customer malaise, and edifying the brand with customer relevance.
Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Johnson, or

No comments:

Post a Comment