Glad summer's on the way: operators' moods improve following surge in tourism, firmer sales during first quarter

Nation's Restaurant News, May 18, 1992 by Alan Liddle, Theresa Howard

Operators' moods improve following surge in tourism, firmer sales during first quarter

Encouraged by signs of recovery tied to first-quarter results and growing tourism industries, foodservice operators throughout much of the Northwest are forecasting sunnier skies and better sales for the summer months.

For the most part, operators in Alaska, Idaho, Montana and Wyoming were upbeat in their comments about their prospects for the near future. But the situation in the more densely populated states of Oregon and Washington seemed to vary with the price points of individual restaurants and the location of the operations.

"We were up about 12 percent from last year's first quarter," reports Doug Pearl, district manager for two-unit Yankee Diner in Bellevue, Wash., a suburb of Seattle. "As far as the summer goes, I'm sure we'll be up some percentage from last year even though the recession is finally starting to have an effect [on some higher-end restaurants] in Seattle."

The Yankee Diner concept, which offers such items as pot roast and roast turkey, runs per-person averages of about $4 at breakfast, $6 at lunch and $8 at dinner. The two existing units generate combined sales of about $6 million a year, Pearl says.

Jim Simonson, a vice president with Seattle-based Restaurants Unlimited Inc., is not so optimistic about the coming summer.

"We're looking for about the same [kind of summer] as last year, which, as everyone knows, was not a great year," Simonson points out. "We ended the first quarter just about flat with 1991."

RUI's full-service contemporary dinner-house concepts in the Puget Sound area generate average tickets of $11 to $15 at lunch and $23 to $30 at dinner.

Al Fleenor, president of 14-unit Pacific Coast Restaurants Inc. of Portland, Ore., gives an assessment similar to that of Yankee Diner's Pearl.

"We'll probably be up a few points [this summer]; we were in April." explains Fleenor, whose partner is noted industry veteran Robert Farrell. Referring to the April upswing, he adds, "We're not talking astounding numbers, but we're talking up."

Pacific Coast Restaurants operates the full-service Stanfords and Newport Bay Seafood Broiler concepts in Oregon and Washington.

"We're positive about the summer" is the observation of Gerry Danna, who, along with his brother Joe, are franchisees of four Elmer's Pancake & Steak House restaurants in the greater Portland market.

Danna acknowledges that things began slowing down at his company's restaurants just about the time that he and his brother opened their fourth unit, "making it really hard to differentiate between what we have done to ourselves vs. what the recession might have done to us."

Whatever the cause of the dropoff at the restaurants, as of the first quarter of this year, "we're back up to par," he says.

Bill Cross, executive vice president of the Oregon Restaurant Association, says his "best guesstimate" was that this summer "is going to be better than last."

Part of that assessment, he explains, was based on comments from participants at two recent industry trade shows where manufacturers and distributors' representatives reported that sales were up over those of the prior year. Cross says such reports would suggest that"people buying were taking advantage of show specials, but also that they were feeling somewhat confident that summer was going to be decent."

Adds Cross, "Southern Oregon seems to be doing pretty well."

Comments by operators in southern Oregon support Cross' observation.

Dave Thomason of the Thomason Restaurants Inc. in Grants Pass, Ore., believes that the region's economy continues to benefit from efforts to lure in new industry and from the growing base of well-to-do retirees from California. His company is a franchise of the Carl's Jr. fast-food concept and operates three units in Northern California and three units in Oregon with a fourth under development.

"The first few months of the year have been good for us. The California market seems to be rebounding to prior-year levels, and Oregon is outpacing last year by between 3 percent and 7 percent, depending on the location," Thomason says.

For their part, many of the attendees to the recent Pacific International Hospitality Show in Seattle were upbeat about business. Gene Vosberg, executive vice president of the Restaurant Association of the State of Washington, which hosted the convention, notes that a survey of 247 showgoers resulted in "a positive report" and reflected "a high level of optimism."

Operators in Alaska, Idaho, Montana and Wyoming were particularly appreciative of developments in their state's tourism industries or special events slated for this summer.

"We have been very fortunate in these recessionary times," observes Carl Wilgus, Idaho's state tourism director. "Part of it is that we are in a good location. The Pacific Northwest seems to be a hot destination."

Indeed, more than a dozen operators from Idaho, Montana and Wyoming, ranging from fast feeders to contract feeders to independents, have reported that they have had solid sales gains in the first quarter. They say sales were up from 2 percent to 15 percent, and they expect more of the same for the upcoming summer season, typically their busiest time of the year.