What’s causing TGI Fridays downfall?
10/07/14 Branding & Marketing Strategy # , , , , ,

What’s causing TGI Fridays downfall?

This article was posted to LinkedIn by request from their team, you can read it on that platform here.

Yesterday I had the honor of speaking with Alexander Kaufman from the Huffington Post about TGI Friday’s new promotion (AYCE Appetizers for $10) and the ramifications of it on their brand.  The article covers a lot of my opinions which were naturally confirmed by other restaurant experts, but I wanted to take the time to dig a little deeper.

For those that don’t know, TGI Friday’s launched a new, aggressive promotion where customers can get all the appetizers they can eat for only $10. It’s analogous to the slimy used car salesman. TGI Friday’s is pandering, peddling and pushing it’s low quality food at any cost. “What’s it gonna take to get you into an appetizer today?!” They might as well put a inflatable flailing arms guy out front of every location.

Although the promotion seems like it’s in the same vein as other promotions they’ve run in the past* this one seems more like a last ditch effort to stave off the inevitable: TGI Friday’s is failing. There are a number of drivers pushing towards this inevitable decline:

  1. They’re known for processed and frozen foods that aren’t great and definitely not healthy
  2. Their atmosphere is no longer unique and devoid of the attitude it once had
  3. Run on a business/operations model to which the market no longer responds

We all grew up eating at Casual FSRs whether it’s an Olive Garden, Applebee’s or Ruby Tuesday. These approachable restaurants touting fun-times and new experiences popped up all over the place decades ago. Their rapid growth could be attributed to a multitude to their new dining experiences, but that would only take a restaurant so far. The main reason places like Friday’s were about to replicate their concepts was the creation of processes that controlled consistency from location to location.

You could go to a Friday’s in New York and have the same experience you’d have in Florida. The food would be the same, the people, atmosphere, and so on. This assembly line approach to creating a restaurant experience was the foundation for their rapid growth. This strong backbone continues to keep things running, but a few recent trends have taken root and they’re directly chopping away at the core of the Friday’s model.

Farm-to-table craze hit the US market and with it came an ever-growing awareness around fresh ingredients and responsibly grown produce. Processed foods are now constantly demonized, and the rush towards eating better continues to skyrocket. Eating “healthy” isn’t about dieting any longer. It’s about eating fresher across the board and taking an acute interest in how animals are raised, how food is grown, and the effects of additives on the human body. Terms like “all natural”, “locally sourced” and “responsibly grown” are now apart of our vernacular.

People don’t want processed foods. They don’t want to eat frozen garbage that’s dropped in a fryer, or a bag of pasta heated in a boiling pot of water. It doesn’t matter how cheap you make it. That pushes the quality further into the gutter in the consumer’s mind. TGI Friday’s compounds their dedication to frozen, non-fresh foods by selling said food in a freezer at your local grocery store.

The second reason for the downfall of brand giants like Friday’s is their dining experience is worn out. The atmosphere of TGI Friday’s was always a zany, high energy, fun-time spot. Jokes about the amount of flare worn even made it into cult films like Office Space. It was a spot to go in the neighborhood because the other spots were rundown independent bars that were smoky, dingy and depressing. Casual FSRs brought a clean spot with a great vibe and changed the game.

However, with growth comes dilution of the restaurant’s brand. TGI Friday’s can’t be a neighborhood spot because neighborhoods have attitude, character and personalities that are different from anywhere else. TGI Friday’s is the exact same at every location. It’s been the same for decades. Nothing has changed which means we’ve all been there, done that.

In order to stay interesting and keep new trials and loyalty at a high, you have to grow and reconfigure the brand naturally. This means creating new ideas that reinvigorate the experience and interrupt the norm customer have come to expect. TGI Friday’s is the same today as it was yesterday and the only changes are the new promotions for cheap food.

Finally, the third reason Casual FSRs are declining and failing can be attributed directly to the Fast Casual movement. Independents and new small chains built on the fast casual format have sprung up with amazing atmospheres Their experiences have new character and authentic personality. These guys are fulfilling a desire in the market for higher quality food at a good price. Most Casual FSRs can’t offer the same.

The fast casual format alone has eliminated the need or desire for a full service casual experience. New fast casuals serve craft beers, craft cocktails and amazing food. They meet the markets demands for fresher ingredients and more sophisticated flavor profiles. What’s more is this format can keep prices low on the food because there isn’t the need for a large staff to run the ship. People aren’t concerned with having someone wait on their table. In a fast casual format the food is brought to you and you’re left in peace to enjoy the meal which is all most people ever wanted anyway. Save the waiters for a night out at a fine dining restaurant.

The very things that constructed the backbone of casual FSRs behemoths are exactly the things crushing them. This traditional model is dying quicker and quicker. Unfortunately, the only way these slow casual restaurants will change the inevitable is with a full overhaul of the business model, operations and food. It doesn’t look like any of them are even considering it.

What are your thoughts on the promotion and the future of TGI Friday’s and/or the slow casual restaurant model?

* – TGI Fridays ran a promotion pushing 2 for $20 in 2012.

no responses
Joseph chimes in on Friday’s “Endless Appetizers” for Huffington Post
09/07/14 In the press # , , , , , ,

Joseph chimes in on Friday’s “Endless Appetizers” for Huffington Post

TGI Fridays launched their controversial Endless Appetizers promotion in what looked to be a desperate effort to boost sales. Alexander Kaufman reached out to me to get my opinion on what this means for the brand and how it can negatively affect it. My comments were right beside notable brand strategists like Aaron Allen and TGI Friday’s CMO, Brian Gies. The full article is reposted below, and you can read it on the Huffington Post website. The conversation continued on Linked In after I was asked to embellish by LinkedIn staff.

TGI Fridays is so hungry for new customers that it’s giving food away.

The chain restaurant launched an all-you-can-eat deal on Monday, offering endless helpings of any one appetizer — potato skins, mozzarella sticks, spinach dip and other options — for $10 per person. The promotion is meant to draw new customers, and it’s getting heaps of press coverage of the sort not seen since the chain’s 1990s heyday.

Yet analysts say the endless apps deal is basically Fridays’ swan song, a last-ditch move that ultimately cheapens the company’s brand. The apps may be endless, but Americans’ desire to visit a so-called “casual dining” chain restaurant is just about over.

“In the short term, [Fridays] will definitely have more traffic, but in the long term it damages their plan and will really destroy them,” said Aaron Allen, founder of Aaron Allen & Associates, a restaurant industry consulting firm. “It’s the signal of a desperate brand.”

David Letterman devoted the Top 10 segment on his show Monday to the promotion.

Sales nosedived at casual chain restaurants during the recession, sending once-popular eateries like Bennigan’s and Friendly’s into bankruptcy. Even as the economy has recovered, most of these restaurants have struggled to regain customers. Millennials want fresh, cheap fastish food from chains like Panera and Chipotle. The Mexican chain’s revenue more than doubled to $3.2 billion from 2009 to 2013. The days of young “singles” flocking to TGI Fridays happy hours are long over.

Even Brian Gies, Fridays’ chief marketing officer in the U.S., said the company was stuck in a “combo-meal malaise” and admitted it needed to adapt to modern tastes.

“There are no silver bullets in this business,” Gies said in an interview with The Huffington Post. “The economy and consumer behavior are constantly changing, you’ve got to change with it.”

Sales are anemic at the 49-year-old company, which has more than 900 restaurants in 60 countries. The chain was sold in May by its longtime owner, hospitality firm Carlson Restaurant Inc., to two private equity firms for upward of $800 million.

Annual revenue at company-owned stores dropped 2 percent to $1.1 billion in 2013, according to numbers shown to HuffPost by PrivCo, a financial data provider on privately held companies. Including franchisees, sales revenue hovered at $2.7 billion last year, the same as the year before.

Gies declined to comment on those figures.

The “endless appetizers” promotion, which runs until Aug. 24, may eat into sales. But for the restaurant that claims to have popularized the term “happy hour” and the Long Island Iced Tea, the real money-maker may be alcohol.

“They’re probably hoping they can make it up on drinks,” said Joel Cohen, a restaurant marketing expert.

But a quick boom in booze sales may just further erode the struggling brand.

“If they’re just up-selling the alcohol, the promotion just looks like a ploy,” said Joseph Szala, a restaurant branding expert at the marketing firm Iris Worldwide.”They’re saying, ‘We’ll do anything to get you into a Fridays for a meal’ — it’s too kitschy, too car sales-y. It’s low class.”

To survive, Fridays may have to raise prices, Allen said.

“That’s the only way you can compete,” he said. “A casual dining restaurant can never be as casual and as fast and convenient as a fast-casual one.”

Or it can jazz up its menu. Sure, Gies said the mozzarella sticks now include asiago cheese and a dusting of parmesan. And, yeah, the potato skins have more cheese and are “more potato-y,” he said. But, according to Jeff Fromm, an advertising consultant at Barkley who co-authored the book Marketing to Millennials, the key to attracting the coveted 20-something consumers Fridays is losing to fast-casual chains is offering some culinary pizzazz.

“They’re going to need to look at creating experiences — creating flavor adventures,” Fromm said. “Less uniqueness means bigger problems for Fridays.”

no responses