Steakhouse concepts seek a wider audience
America loves a high-end steakhouse, and the pricey fine-dining chains offering big steaks and generous cocktails are seeing a recovery from the recession like no other segment.
Chains like Ruth’s Chris Steak House, Del Frisco’s and The Capital Grille have been bolstered by the return of business travel and boons in the stock market, and their well-heeled customers are not balking at an average check of $100 or more.
Still, even as the casual-dining segment struggles to build traffic, some steakhouse operators see an opportunity to bring the traditional steakhouse experience to the middle market as well.
The ONE Group Hospitality Inc., parent to the high-end STK steakhouse brand, and Ovation Brands Inc., are targeting the middle market with new variations on their more familiar concepts. But the two companies couldn’t be more different.
New York-based ONE Group, which recently went public, is known for its food and beverage contracts with glamorous hotels around the world.
Ovation Brands, based in Greer, S.C., is formerly Buffets Inc., which emerged from bankruptcy two years ago and is parent to the Old Country Buffet, HomeTown Buffet, Ryan’s and Fire Mountain brands. Ovation, however, is poised for growth with the polished-casual Tahoe Joe’s concept.
Both companies contend that the space between the approachable Outback Steakhouse and high-end Ruth’s Chris is wide open, with little competition.
They both argue that traditional steakhouses all follow the same tired model — big cuts of meat with à la carte sides — and are typically seen by guests as special occasion or business meal events. The opportunity is to build frequency.
Both also point to companies like Southlake, Texas-based Del Frisco’s Restaurant Group Inc., which is successfully growing its more affordable Del Frisco’s Grille concept, with an average check of about $52 per person, alongside its higher-end Del Frisco’s Double Eagle Steakhouse brand, with an average check of about $107.