Despite the unstable economy, Morton’s The Steakhouse chief executive Chris Artinian says the fine-dining chain’s core business-traveler clientele will probably be more resilient compared with the start of the recession.
Morton’s traffic and sales fell precipitously at the beginning of the downturn. In response, the restaurant turned its bar area from a “holding cell” into a profit center called Bar 12-21, where a small-bites menu caters to new diners and drives sales of cocktails and wines by the glass.
The chain also is raising its profile by sponsoring the Professional Golfers Association and its Celebrity Servers fundraisers, where pro athletes work the dining room. Artinian said continually bolstering Morton’s reputation would pave the way for growth domestically and abroad, particularly in China.
Artinian recently spoke with Nation’s Restaurant News about those economic factors, as well as the 77-unit chain’s growth in the United States and Asia, and marketing strategies that have helped attract younger diners to the Chicago-based brand.
Morton’s core customer is the business traveler, so does the economic uncertainty worry you?
Certainly anybody in business on the luxury end is going to worry about where the economy’s going, but I think today it’s a little bit different. We went through ’08 and ’09 and learned a lot from that experience. In 2010, the mantra from the business community was, “We have to get back out there.” I don’t think this economy is going to change the fact that if we’re ever going to get out of this recession, we have to be in front of our clients doing deals.
Has private dining come back?
We’re not seeing 40-person groups anymore; it’s a little bit more conscious, parties of 15 to 20. But it’s coming back, and we’ve seen it all year long, and the past six quarters of positive comps have reflected that.
The bar has broadened our appeal, so we’re seeing a younger demographic of people that eventually will be entertaining more in our dining room and our private-dining rooms. Tylor Field, our director of wine and spirits, and his team have done a phenomenal job with our wines by the glass and craft beers — something for everyone. At first I giggled about our [new low-calorie cocktails] Spa-tinis, but the feedback has been incredible.
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What went into 2011’s real estate strategy of relocating restaurants rather than opening new ones?
We’re in some markets we don’t want to leave. There’s no better steakhouse market than Dallas, and it’s a hub for travel. We were in a basement-level location there for 20 years, literally out-positioned by a Subway restaurant. So we relocated to uptown Dallas across the road. The story was windows, maximum signage, a great street presence, and the total new package. The restaurant out of the gate is doing two to three times the sales of the old location. We’ve been in Tysons Corner, Va., for more than 20 years, and there’s no reason to leave that market. We found a Main and Main location, put in the new dining room package, and we expect similar results from that location. We are working through a list somewhere between six and 10 candidates for relocation. We’re talking about $1 million to $1.2 million difference to the bottom line.
Does China have the market for a luxury brand like Morton’s? Or do you have to be a pioneer?
Well, I think we are the pioneer. We’ve been in Singapore for 13 years and in Hong Kong for 12 years. We opened in Macao five years ago, and we opened our first restaurant in mainland China, in Shanghai, back in October. It’s not unreasonable to project eight restaurants there in three or four years. One could say there could be 40 restaurants out there, and I’m not sure about that, but there could be 10 to 12 restaurants there, easy. The beauty of China and Asia is that strong brands do very well there. Another location in Shanghai and one in Beijing are low-hanging fruit and could be there in the next 18 months.
How does social media factor into Morton’s marketing strategy?
We have Facebook, Twitter and a company blog, and we’ve done Facebook campaigns to drive certain special events. We use those tools to stay top of mind, and it is absolutely social. The guys in business today who are living on their PDAs — which is virtually everybody — you come into a city and you know what’s going on. We’ve had tweet-ups, and all of a sudden 60 people show up because of one person with a lot of followers. We continue to gain momentum with followers on both Twitter and Facebook.
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We’re so well-known for being a business destination, but we can’t forget about the fact that we’re a strong special-occasion destination. With the onset of our bars being able to create this lighter environment and broaden the appeal with our guest base, we are going to see more social diners in our restaurants. As these younger guests get bigger expense accounts, it helps the lifecycle, and we’re getting them younger so we can keep them longer.
Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN
