2015 Second 100: Family Dining, Buffet restaurants continue to struggle2015 Second 100: Family Dining, Buffet restaurants continue to struggle

Executives at Second 100 Family Dining and Buffet/Grill-Buffet chains say they’re focusing on operational fundamentals to reenergize the struggling segments, after another challenging year of sales declines and shrinking unit counts.

Aggregate U.S. systemwide sales for the group — which includes eight Family Dining chains and five Buffet/Grill-Buffet chains — totaled $3.10 billion in the Latest Year, down 1.3 percent from $3.14 billion in the Preceding Year. The group also saw a 4.5 percent year-over-year decrease in total U.S. unit count from 1,996 to 1,906.

Seven of the 13 chains in the segment recorded year-over-year sales declines in the Latest Year, and 10 saw their unit counts drop in the same period. On average, the chains recorded a sales decline of 0.6 percent and an average decline in units of 2.2 percent.

“That’s the challenge for everyone in full service — how to make the model continue to work,” said Doug Branigan, vice president of franchising for Black Bear Diner.

Wilbraham, Mass.-based Friendly’s held onto its No. 1 sales rank, although systemwide sales fell to $384 million in the Latest Year, a 5.6 percent decrease from $406.6 million in the Preceding Year. That followed a 9.9-percent decrease a year earlier. The chain also posted a 17.4-percent decline in unit count in the Latest Year. In fact, of the 101 units closed by Second 100 Family and Buffet/Grill-Buffet chains in the Latest Year, 59 of them were Friendly’s units.

There were some bright spots, however. Black Bear Diner, which makes its Second 100 debut this year, continued its growth trajectory with year-over-year sales growth of 13 percent, on top of 24 percent sales growth a year earlier. The Redding, Calif.-based chain ended the Latest Year with 67 locations, a 9.8 percent increased from the Preceding Year.

A more upscale experience and strong value proposition are key to the chain’s momentum, the company said.

“We separate ourselves from the majority of players by being more upscale, premium family dining — not so much from pricing, but from value and presentation of our concept,” Branigan said.

Other bright spots were Sonny’s Real Pit Bar-B-Q and Village Inn, which posted year-over-year sales gains of 5 percent and 4.9 percent, respectively.

For everyone else in the segment, sales growth was nominal or negative.

Still, a number of Family Dining or Buffet/Grill-Buffet chains found ways to drive estimated sales per unit, or ESPU, by revamping their food, service and decor.

In fact, 10 of the 13 chains in the segment posted year-over-year gains in ESPU. Sizzler led the pack with 9.7 percent ESPU growth in the Latest Year, followed by Sonny’s Real Pit Bar-B-Q and Friendly’s, with 8 percent and 7.4 percent growth, respectively.

Mission Viejo, Calif.-based Sizzler spent most of 2014 continuing its store remodeling, improving its salad bar and menu options as well as increasing social media marketing, chief executive Kerry Kramp said.

“We focused on the food and the decor to create an experience that resonates more with Millennial families,” Kramp said.

Ingredients at the create-your-own salad stations went from pudding, peaches and cottage cheese to jicama, edamame, quinoa and artichoke hearts. Once customers assemble their salad, chefs at the station toss it with a dressing and put it on a chilled plate.

“We’re excited to see how it’s broadened our guest base,” Kramp said.

Atlanta-based Huddle House which posted 4 percent ESPU growth in the Latest Year, has been updating its locations with a more contemporary decor, and has revamped its employee training to boost customer service. Limited time offers also helped boost sales.

“It was blocking and tackling, Restaurant Operations 101,” Michael Abt, chief executive, told NRN late last year.

While Old Country Buffet and HomeTown Buffet had category-leading estimated sales per unit of $2.4 million each, their ESPUs declined more than 6 percent from the Preceding Year, the largest decreases of any chain in the segment.

However, parent company, Ovation Brands Inc., in Greer, S.C., began last year on a reimaging effort that included 85 new recipes for menu items offered on the buffet line, as well as a move toward more individualized portions of food. The new format generated same-store sales increases when rolled out in Denver stores, chief executive Anthony Wedo told NRN last spring.

“Fundamentally, you have to do the right thing,” Wedo told NRN. “We’re building it and they’re coming.”