Steakhouse price point wars heat up

Bob Krummert

Just when you thought pressure for cut-rate deals might be letting up in the full-service restaurant industry, major players in the upscale steakhouse segment have begun to aggressively court customers with less-costly options. Dining room pricing remain at lofty levels; but it’s a whole new world in their bars.

Consider: 130-unit Ruth’s Chris Steak House is giving bargain-hunting customers an enticing new option other operators could be hard-pressed to match. The high-end steakhouse chain now lures happy hour patrons with the likes of seared Ahi tuna, tenderloin skewers over spring greens and other upscale fare for $7 apiece.

Sweet deals like this one are a given at happy hour. That’s just the nature of the business. More worrisome to full-service casual dining operators could be the latest move from 64-unit Fleming’s Prime Steakhouse. Through the end of May, the upscale chain is running a “small plates, big pours” offer. It’s a prix fixe deal that invites customers to pick one of seven small plate offerings and enjoy an oversized glass of wine paired with each item by the company’s director of wine.

This special is available only in the bar. But unlike happy hour deals, it’s available all night long. The price point is $24.95—a good deal for the caliber and portion size of the food and drink offerings, and a number that’s right in the wheelhouse of most casual dining patrons. Throw in the handsome surroundings of Fleming’s and it makes for a tempting offer.

Here’s what on Fleming’s “small plates, big pours” menu:

• Sliced Filet Mignon/Penley Gryphon Merlot (Australia)

• Shrimp Scampi Skewers/Paco & Lola Albarino (Spain)

• Petite Lamb Chops/Cline Cashmere Red Blend (California)

• Seared Ahi Tuna/A to Z Wineworks Pinot Noir (Oregon)

• New Bedford Scallops/Cakebread Sauvignon Blank (Napa Valley)

• Filet Mignon Skewers/ B.R. Cohn Silver Cabernet (Napa Valley)

• Lobster Tempura/Silverado Chardonnay (Napa Valley)

The wine pours come from top shelf vintages that are part of the Fleming’s 100 list. That’s just one of the factors that makes this particular deal tough to compete with for most casual dining operations.

The Ruth’s Chris happy hour provides some serious competition, too. Dubbed “Sizzle, Swizzle and Swirl,” this program is a sweet deal for customers. But it could create challenges for other restaurants that depend on happy hour traffic to keep their bar areas busy during early evening hours.

Consider: Ruth’s Chris guests can choose one of seven tasty items from the new happy hour menu, down a stiff drink with it, pay the tax and leave a decent tip and still get change back from a $20.  Factor in the plush surroundings in which all of this is consumed and we think a lot of customers will give this one a try.

The full $7 food lineup at Ruth’s Chris includes:

• USDA prime burger with fries

• Tenderloin skewers over spring greens

• New England lobster roll with fries

• Three petite prime sliders

• Sliced filet steak sandwich with fries

• Seared Ahi tuna

• Spicy lobster

Plenty of wines by the glass, beers and handcrafted cocktails are available at similar savings The Ruth’s Chris happy hour runs from 4 p.m. to 7 p.m. nightly.

The company thinks a strong happy hour can be a key business driver, even for a restaurant of its caliber and price point.

“Sizzle, Swizzle and Swirl means happy hour just got a serious upgrade—one that turns first-time guests into regulars,” says Ruth’s Chris director of beverage strategy Helen Mackey. “With the incredible quality this happy hour delivers, all at the very accessible $7.00 price point, Ruth’s Chris is the ideal, go-to happy hour destination.”

No argument here.

The Ruth’s Chris happy hour menu and strategy is similar to that of its steakhouse segment brethren The Palm and Morton’s.

Morton’s long-running Power Hour (from the 4 p.m. opening until 6:30) has a $7 happy hour menu that includes mini crab cake BLTs, smoked salmon pizza, three prime cheeseburgers and four petite filet mignon sandwiches. For $6, customers can sample iceberg wedge bites, blue cheese steak fries and chicken-finger like chicken “goujonettes.” Drinks are priced at $5 for beers,  $6.50 for wines and $7.50 for “Mortinis” and cocktails.

The Palm has similar food and drink offerings at its Prime Time happy hour, available at most of its 30 units. Prime Time ranks with Morton’s and now Ruth’s Chris as the gold standard of steakhouse happy hours.  

Ruth’s Chris isn’t breaking new ground with its strategy. But if your happy hour puts out average food and drink and counts on the low price point to bring patrons in, be aware that the competitive ante has been upped.

Fleming’s is breaking new ground. In effect, the chain is creating a casual restaurant in its bar that runs in parallel with the full-price dining room to which it’s attached. Check averages in the dining room are $68. With tip, the “small plates, big pours” deal in the bar amounts to a half-off deal. The Fleming’s offer is limited-time, for now. Most casual dining operators will have trouble competing if Fleming’s makes it permanent.