Eatzi's serves up fine food fast

Discount Store News, April 15, 1996

DALLAS - With 65 highly paid chefs and the same number of hourly staff crammed into 8,000 sq. ft., Eatzi's, the chef-to-go, grocery and convenience concept from Brinker, must have an overhead comparable to Netscape's R&D department or Planet Hollywood when Sly, Arnie and Bruce are there, at least on a per-square-foot basis.

"You can't measure it that way," said Brinker director of new concepts Anthony Tedesco, with a laugh. "We measure it against sales."

And sales are booming. The 3-month-old Eatzi's, which offers some 450 ready-to-eat, ready-to-heat and chef-to-go entrees along with fresh produce, from-scratch baked goods, wines, cheeses, snacks, beverages and a host of other consumables, is averaging 2,500 customers per day, with traffic increasing sharply as word-of-mouth spreads (the company spends little or nothing on advertising, using an everyday low price strategy).

Shoppers can choose from entrees in prepacked single portions or purchase by the pound for family-style meals. They can go home with anything from a humble sandwich to a gourmet offering of osso bucco with all the trimmings. One of its 65 chefs will help with an appropriate wine, salad tips and cooking instructions, as well as suggest a perfect dessert and coffee selection.

"Everything we serve is cooked from scratch right on the premises," Tedesco said. "We use only the freshest, best-quality ingredients. The suppliers know better than to send less to [the company's] demanding chefs."

Eatzi's, brought to you by the same group that developed the casual fine-dining concepts Macaroni Grill and On the Border, jumps in with both feet where grocers, convenience stores, mass merchants (like Wal-Mart with its aborted Harry in a Hurry concept and the present Radio Diner test) and fastfood restaurants have only tested the waters. With the number of meals cooked at home in the average American household plummeting, and the need for convenience and quality in time-stressed, two-earner families skyrocketing, Eatzi's, Tedesco said, is right on trend in supplying the changing needs of the middle-class-consumer.

"There are really three elements that are vital," Tedesco told DSN. "Products have to be fine restaurant quality, the consumer has to get them quickly, and there has to be a full fresh grocery selection to round out the meal. We're delivering all three."

With a strategy similar to that of a supercenter or a wholesale club, Eatzi's looks to pick off a small portion of business from a wide array of food suppliers: fast feeders, sit-down restaurants, convenience stores, grocery stores, wine shops, bakeries, farmers markets and even caterers. After all, who needs a caterer when a consumer can pick up - in minutes and at a fraction of the cost - everything from hors d'oeuvres to an intricate dessert, with appropriate wines for each course, and serve a five-course dinner with only moderate preparation?

"And we're finding that demographically, Eatzi's reflects its neighborhood," Tedesco said. "While 35% of our shoppers fit the `affluent, time-stressed' profile you'd expect to find, another 35% are under 32, so they're not necessarily affluent, and the remainder includes senior citizens, singles and so on. You can find a meal here for $4, in which case the customer is seeing it as the least-expensive alternative - even to a grocery store. And you can spend more, where the customer sees an extra dollar or two as well worth the convenience and time savings. Also, families see that they can buy exactly the right quantity instead of being limited to grocery store quantities, which cuts down on waste."

The accent at Eatzi's is on fresh and healthy. "We don't use butter, and we reduce salt by emphasizing good fresh herbs that deliver a lot of flavor," Tedesco said. "We have 65 chefs competing with each other, so we're always going to be on the cutting edge of taste trends."

And the menu changes so rapidly (about 25% of items change daily) that the consumer is always seeing something fresh and new. "And it's not just time of day," Tedesco noted. "Demand changes by day of the week." On Saturday, for instance, demand splits into the lower-end (pizzas and finger food) and higher-end entertaining products, with demand for comfort foods like meat loaf and lasagna dipping.

Customers enter the store through the busy open kitchen and bakery, where they see for themselves the from-scratch cooking process. "We lead with quality," Tedesco said. "Consumers can see for themselves, and it gives us instant credibility."

The company prices by segment against the market leader. Hot prepared meals might be priced against Boston Market, wine and beer against a neighborhood liquor store, produce against Kroger and baked goods against a local bakery.

The synergy of offerings and convenience gives Eatzi's an advantage over most competitors. Where a fast feeder might average a $5 check at lunch, Eatzi's can sell flowers, muffins, a bottle of wine, a pound of fresh-ground coffee and fresh fruit, easily doubling the average ring.