Restaurants Redefine to Struggle Through Recession

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Restaurants Redefine to Struggle Through Recession

MCLEAN, Va. -- The recession is jolting the restaurant industry to concoct products that are redefining what the industry's biggest brands stand for, USA TODAY reported.

KFC’s biggest campaign of 2009 is selling what it calls unfried (i.e. grilled) chicken, while Pizza Hut is pushing home-delivered pasta like there's no tomorrow. McDonald's, the world's biggest fast-food chain, is in the midst of rolling out a line of designer coffees, whileStarbucks is peddling value meals, according to the report.

In addition, Domino's is delivering subs and pasta-stuffed bread bowls. Boston Market, the rotisserie chicken king, is pitching crispy chicken. Arby's, the anti-burger chain, is hyping Roast Burgers. Cheesecake Factory, known for its gigantic servings, is offering "small" meals. Even Morton's, the pricey steakhouse, has $5 burgers at the bar.

"This is a defining moment for the industry," Hudson Riehle, research chief at the National Restaurant Association (NRA), said in the USA TODAY report. "The financial crisis has brought with it a redefining of boundaries."

The fallout looks—or tastes—surreal. Many of the food innovations appear to be the opposite of some chains' founding principles, and carefully honed brand image.

"Could sushi at Taco Bell be next?" USA TODAY asked.

"The industry has never faced a period of stress like this," Alan Hickok, a veteran restaurant industry consultant, told the newspaper. "There's never been anything this deep."

As a result, the restaurant industry is spinning out new products as fast as any time in its history. "There are innovations, and there are spinovations," said Russell Weiner, Domino's marketing chief. "When you're trying to grow a category, you need to bring in innovations."

Recession-hammered chains have been trying just about everything to lure folks in the door, according to the report. Gobs of publicity have been given to some for slashing prices to $5 (as TGI Friday's did to sandwiches and salads in May) or even giving away food (as Denny's and KFC have done recently).

But experts say there is a more fundamental change taking place deep inside the restaurant industry's R&D departments. This product mill isn't necessarily about buffing restaurants' brand images. They are just desperately trying to give folks what they want.

"Everyone is looking in everyone else's backyard to see if they can find any green grass," Dennis Lombardi, an industry consultant at WD Partners, told USA TODAY. While there are some signs that the restaurant world's troubles are bottoming, Lombardi said, "This is the worst I've seen in the 35 years I've been in the industry."

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