No Happy Meal toy, though

Discounting, it seems, is highly relative. Knocking $2 off the price of a pie may work in the pizza business, but the high-ticket Ruth’s Chris chain has to operate on a different scale. So, after posting a 15-percent drop in comp sales for its non-franchised steakhouses, the wheezing brand is planning a mail drop of $25-off coupons. It's also experimenting with the fine-dining equivalent of value meals.

Upper-bracket bargain hunters will already find a new steal at the (steak)house that Ruth built: A five-ounce lobster tail stuffed with crab meat and coupled with a six-ounce beef filet for $39.95. Not exactly a Chicken Snack Wrap, but clearly a deep discount by the standards of the chain's market.

Three other Cadillac-echelon combos are in test. The Ruth’s Classic comes in two versions. For $39.95, patrons can pick an entrée, side and dessert. If they pop for the $49.95 version, the choices also include a full-sized rib eye, a lobster tail and lamb chops.

Simultaneously, the chain is testing a three-protein deal that would make Michael Jacobson overheat before he could condemn it as an obesity booster: A meat, a fish, and a chicken selection, accompanied by a side and a dessert, for $44.95.

“Frankly it's too much food,” Ruth’s Chris acting CEO Michael O’Donnell told shareholders.

And, perhaps, too much of an outlay. O’Donnell said the Ruth’s Trio will be recast with smaller portions and a price “in the $29.95 range.”

During a financial conference call convened by the chain’s parent, Ruth’s Hospitality Group, O'Donnell also mentioned a re-affiliation with Cameron Mitchell, the Columbus, Ohio, restaurateur who sold the company his Mitchell’s Fish Market and Mitchell’s Steakhouse chains. O’Donnell wasn’t clear on the nature of the affiliation, but indicated that the entrepreneur would be accessible if the company needed his expertise. “He has kindly agreed to be available to us on a limited basis,” O’Donnell said.

Signs of the (new) times

This is a good time to be in the sign business. First KFC reveals that it might replace its familiar exterior logos with ones reading, “Kentucky Fried & Grilled Chicken,” a dramatic act of support for the chain’s new roasted chicken (it’s roasted on a plate that leaves grill marks; hence the name. Apparently “Kentucky Fried & Roasted/Grilled Chicken” was adjudged to be a bit much.)

Then sister chain Pizza Hut disclosed that the home office in Dallas will replace its exterior nameplate with one reading, “Pasta Hut,” a not-so-subtle shill for the $11.95 trays of pasta that will be added to stores’ delivery menu on April 6. The rechristening is supposed to happen next Tuesday, otherwise known as April Fool’s Day, and last for a month. But, remember, Pizza Hut is run by the same company that announced on a past April 1 that it had purchased the Liberty Bell for promotional use by its Taco Bell chain.

You have to wonder what Taco Bell’s parent has in store for the exterior signs of that chain. If it follows the patterns set with its other holdings, Yum! Brands will be swapping out the current trade dress for logos reading, “Taco Platters,” or “Taco Smoothies.” Platters were introduced a short ways back, and smoothies are on the rollout schedule for this summer.

But in the meanwhile, the signage business can pick up a little more coin from Ruth’s Chris Steak House Inc. The high-end operation doesn’t feel that its corporate identity should be based on only one restaurant brand when the fold was enlarged through a recent acquisition to include the Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse concepts. It reportedly plans to ask shareholders at their annual meeting on May 22 to approve a switch to the more inclusive handle, “Ruth’s Hospitality Group Inc.”

A Ruth's by any other name

Restaurants routinely name menu items after people, be it the Gene Simmons Sandwich (tongue with lots of dressing) or a Paris Hilton dessert (tart or cheesecake, take your pick). But it’s far less routine to dedicate a section of the dining area to someone, especially when that person is another restaurateur.

But if you book a private function at the Ruth’s Chris Steak House in Knoxville, Tenn., you’ll options will now include the Regas Room, a tribute in carpet, wood and wall coverings to a famed local clan of restaurateurs. Oldtimers still cite Bill Regas as one of those unsung giants of the business, an entrepreneur who put the same emphasis on people, training and service that persons of a younger vintage would associate with the likes of Danny Meyer. He was also active in industry affairs through his service to the National Restaurant Association. Hence the Ruth’s Chris connection. The chain is headed by Craig Miller, a former chairman of the NRA and still an active director.

Bill and his business partner/cousin, Gus, are the sons of the Regas brothers who opened the landmark local Regas Restaurant. The family sold a part of their business in the 1980s to Brinker International, which eventually sold it to Quality Dining, with the name changed along the way. Now the Regas name will enshrined inside the Ruth’s Chris, which itself pays tribute to legendary restaurateur Ruth Fertel.

Are things bad all over?

If the restaurant industry has slogged through a worse reporting period than the last few weeks, a guy named Hoover was probably president—if not somebody named Voldemort. In a 19-day stretch, Domino’s posted a 55-percent freefall in net income, Ruby Tuesday posted a 48-percent plummet, Brinker notched a 21-percent decline, Wendy’s disclosed a 56-percent dive, P.F. Chang’s earnings sank 20 percent and IHOP finished $11.6 million in the red. For all but a few industry standouts (notably McDonald’s and Tim Hortons), the recent past has been the stuff of blues songs.

The industry has certainly shrieked through its share of rollercoaster drops before. As Ruth’s Chris CEO Craig Miller noted during MUFSO, the current ills of sky-high fuel prices and surging food costs are minor compared to what he saw in the 1970s, when President Nixon froze prices to check inflation and consumers couldn’t buy gas at any price because of an OPEC embargo. This is nothing compared to then, he suggested.

But what makes Quagmire 2007 unique, at least out of all the restaurant downturns I’ve witnessed, is its lack of discrimination. In past sales chills, business usually shifted, with the big brands wresting traffic away from the scrawnier players in a display that would have had Darwin smugly nodding. But this time, the dynamic seems to be more of a lowering tide. Many of the companies that reported their earnings with a decided wince were the very ones that filed their SEC documents with a swagger just a short while ago. This is truly a macro-effect, not a bad story with plenty of footnotes. The list of the unaffected is shorter than a mash note to George Steinbrenner.

Which, of course, underscores the question, What’s the industry to do? Miller offered his recollections of worse times to illustrate that better conditions will return eventually. But how can a chain hurry it along?

BJ’s Restaurants, one of the companies to clearly prosper during a period that most competitors characterize as a kick in the groin, has a very definite idea. “In this difficult operating environment, where consumer spending for casual dining occasions and the prime costs of doing business will likely continue to be under significant pressure on an absolute basis for the foreseeable future, we believe the more successful casual dining concepts will be those that protect their overall consumer 'approachability' for all dining occasions and that offer even greater quality, differentiation and overall value to the consumer," CEO Jerry Deitchle was quoted as saying in the company’s announcement of a 31 percent rise in net income on a 30 percent rise in revenues for the third quarter.

I’m not crystal-clear on what he means by “overall consumer ‘approachability,’” but I assume he’s trying to say that the objective is boosting customer frequency, a laudable goal. Certainly that’s more ambitious than the usual approach of trying to buy customers by giving them a deal, a reflex that can haunt a chain for years to come.

Avoiding that knee jerk to focus on “approachability” and differentiation—an objective that should trump the others, in my estimation—would be as much of a departure from the norm as this downturn itself seems to be.