Wanna Buy a Franchise? Maybe now is the time

With the global economy in turmoil and banks reluctant to lend to even the most well-heeled organizations—or even to other banks!—it looks like next year could be tough sledding for the franchising industry. And it could be even tougher for chains that have pinned their hopes on refranchising their existing company-owned restaurants to raise needed capital. Prior to the financial meltdown, bankers already regarded lending to restaurants as risky business; what are they thinking now?

Franchise information service provider FRANdata gave its industry outlook in late September (which is to say, just before the financial and credit markets fell off the cliff) at the Franchise Leadership & Development Conference in Chicago. Even without knowing about the massive shocks that loomed just around the corner, the company sensed that the overall economy was going to weaken dramatically and was unlikely to stabilize until 2010.

What was the tip-off? The unprecedented deleveraging then already under way. “The crisis of credit is becoming a crisis of confidence,” FRANdata president Darrell Johnson declared. He couldn’t have been more prescient.

Yet some franchisors will be winners, he said, with a few sectors staying hot and an increasing number of foreign brands entering the U.S. Alas, there will be losers, too. Which chains are most vulnerable? Johnson forecast that franchisors that rely on royalty fees to cover their G&A (general and administrative costs) could be in trouble. And brands that already have marginal performance will stand out, and not in a good way.

On the other side of the coin, Johnson foresaw that opportunities to buy underperforming units and opportunities to expand into other brands will abound for the better-performing franchisees. But given the chance, he’d probably want to insert the word “relatively” into his statement that “better performers will have better capital access” if we asked him his opinion today. Hey, even Fortune 500 companies with solid balance sheets struggle to find capital now.

Johnson declared that capital access will be a huge challenge for marginal performers, who will be exiting the business in greater numbers, followed upon almost immediately by increased litigation. In short, he foresaw a shakeout coming among franchisees, even before the worst of the financial and economic problems had become visible.

Which brings us to the refranchising issue. The concept—a chain sells off its company-owned stores to franchisees—has become a popular financial vehicle in the franchised restaurant world of late. It’s a key strategy on the fast food side of the business, where big companies like Sonic, Yum! Brands and Hardee’s have employed it to varying degrees. In full-service, the list of refranchisors includes DineEquity (owners of IHOP and Applebee’s), Denny’s and T.G.I. Friday’s.

There are many potential benefits to both franchisor and franchisee in a refranchising situation. One attraction for franchisors is that they get out of the business of running their own restaurants—which often significantly underperform franchised units—and further into the business of helping others do so, the better to build the brand. More importantly, they acquire significant funds to pay down corporate debt or invest in new ventures. It’s a tempting scenario: Companies acquire more capital just as their business becomes less capital-intensive.

In the case of DineEquity’s refranchising push for Applebee’s, the idea is to sell off 480 of its 511 company-owned stores in the 2008-2010 period. If successful, this will enable the Applebee’s brand to reduce its operating expenses and increase its operating margins. More importantly, it will enable DineEquity to reduce the large debt it took on to buy Applebee’s in the first place. So far, DineEquity reports it has “agreements” for 110 Applebee’s units.

It’s a savvy plan on paper. But ask yourself: Would you want to buy an Applebee’s, or an entire region’s worth of Applebee’s, right now? And if you did, who do you think would lend you the money to do so, and what sort of interest rate do you think they would charge? Restaurant industry lending giant GE Capital Solutions, Franchise Finance, has already announced that it will be cutting its loan activities significantly until the coast clears.

On the other hand, if you are somehow able to line up financing, what a time to buy. As speaker after speaker at Restaurant Hospitality’s Concepts of Tomorrow conference in Las Vegas this week pointed out, it’s a great time to get into attractive locations. And it’s an equally great time to negotiate with the landlords who control those locations. When both bankers and landlords are especially risk averse, their interest in dealing with proven brands and proven operators increases dramatically.

That’s exactly where we are right now. No one knows when the economy will turn around. But when it does, those who had the guts to go into strong brands and solid locations during the current downturn should be positioned to be the big winners. Maybe those who take the plunge on the Applebee’s refranchising offer will be among them.

Consumers Becoming Less Tolerant of Recalls, Demanding More Control Over Information

More than half of consumers change buying habits for nine months or more

The buying habits of consumers change dramatically and cost companies millions when product safety and quality issues arise, according to a new study released today by Deloitte.

More than half of consumers responding (58 percent) who heard about product safety and/or quality problems changed their buying habits, according to the survey. These consumers turned away from such products for more than nine months, on average, increasing the likelihood that they would discontinue the use of the product or brand entirely.

“Our research shows that consumers are becoming less tolerant of recalls, with more than 50 percent changing their product choices,” said Pat Conroy, Deloitte LLP’s vice chairman and consumer products practice leader. “As these consumers continue to buy different products, product manufacturers can expect lower sales and run the risk of damage to their brands.”

The survey, “Food and Product Safety and Its Effect on Consumer Buying Habits,” addresses consumer behavior around product safety and product quality issues in general. Specifically, it focuses on key issues in four product categories:

• Toys
• Consumer electronics
• Fresh food
• Packaged food/beverages

Of these categories, changes in buying habits were most common for fresh food and packaged food/beverage. Roughly half (49 percent) of respondents said they were extremely concerned about product safety, with the greatest concerns coming from women (53 percent) and consumers 55 years of age and older (56 percent). All in all, there is a wide awareness about product safety and quality problems, and more than half of respondents (54 percent) said they were more concerned about the safety of fresh food products than they were a year ago.

Global Concerns
The global lines that were once drawn have now begun to blur, and corporate globalization has created “businesses without borders.” However, although globalization is an increasingly valuable part of doing business, roughly two-thirds of consumers surveyed (65 percent) were extremely concerned about the safety of products produced outside the United States, with the greatest apprehension coming from older consumers.

Approximately three-quarters of the overall respondents (73 percent) were extremely concerned about the safety of products produced in China, with half having the same doubts about products produced in Southeast Asia and Mexico.

As products fall under greater scrutiny, consumers surveyed indicated they would like more information about the safety of food products provided on packaging (86 percent), company Web sites (81 percent) and by the government (81 percent). Some 67 percent said that food product labels with country of origin labeling, certification of product testing and certification of quality testing would be extremely important in their buying decisions.

“Consumers’ increased sensitivity of product safety and quality is having a long-term effect on business,” said Conroy. “Product recalls impact companies’ revenues and share price, as well as market share and brand perception. We’ve seen that, while some companies can maneuver through recalls relatively unscathed, others suffer catastrophic damage.”

The research shows that some of the key factors that drive the extent of a product recall's impact range from the extent of the company’s product diversification, if the recall is specifically for a branded product, strength of the company’s brand when the incident occurred and how the company responds.

“Companies are meeting consumers’ concerns by upgrading or expanding safety procedures including stricter safety standards, testing and third-party audits, and government intervention is driving change,” said Conroy. “The recent granting of the Consumer Product Safety Commission to initiate product recalls and monitor ingredient levels such as lead allowed in toys and other children’s products, is a very timely and relevant example of changes being made all with consumer safety and peace-of-mind at the top of the agenda.”

About the Survey
The survey was commissioned by Deloitte and conducted online by an independent research company on September 3, 2008. The survey polled a nationally representative sample of 1,004 adult consumers. The survey has a margin of error of +/- 3.1 percentage points at the 95 percent confidence level.

The Amazing Artichoke

Artichokes are among the most fascinating and delicious vegetables in the world. One of the oldest-known foods, artichokes have nourished people for several thousand years. Today, artichokes are enjoyed in every corner of the globe.

Artichokes are the ultimate social food, bringing friends and family together for a hands-on, savory experience that gets better with the pluck of each new pedal and ends with a succulent hidden treasure: the artichoke heart.

Unfolding artichokes

As vegetables go, the artichoke is among the most fascinating visually. It is as beautiful as it is delicious to eat. An artichoke is actually the bud of a plant (Cynara cardunculus) from the thistle family. Mostly, the Green Globe cultivar is used for commercial U.S. cultivation. At full maturity the plant grows to a width of six feet and a height of three to four feet, marked by long, fern-like levels. If not harvested, the bud will eventually blossom into a beautiful, blue-violet flower that is not edible.

The height of the stalk and the bud's position on the stalk influences the size of the bud with the largest buds at the top end of the stalk and the smallest, or “babies” found where the leaf joins the stem. The bud contains the heart, the meaty core of the artichoke, and is topped by a fuzzy center, or choke. Rows of petals surround the artichoke heart. The thorns aren’t a problem if handled carefully and will soften while cooking. Beware of artichokes promoted as thornless: they have smaller hearts, less meat and their flavor is not as robust as globe varieties.

Serving artichokes

Artichokes are grown year-round in California, due to the mild, temperate climate and sandy soil. Due to their year-round availability and consistency, artichokes are a profitable addition to foodservice menus.

During preparation for cooking, the center choke (except in baby artichokes) must be discarded, but the base of the petals, the center of the stem and the entire artichoke heart are edible and easy to cook.

Depending on their size, small, medium and large, artichokes can work as an appetizer, side dish or, in the case of the jumbo variety, a main entrée.

Cooked Whole Artichokes

• Fill cooled artichokes with cold salmon, tuna, shrimp or chicken.

• Brush with olive oil and grill until brown.

• Stuff with Italian herb breadcrumbs and smoked Gouda cheese.

Cooked Halves

• Serve as cold buffet dish.

• Pour balsamic vinegar between the petals and finish on the grill for a spectacular flavor combination.

As an Ingredient

• Add to spicy Asian sautés and stir-fries.

• Slice stem into “coins,” deep fry with batter until crispy and dip in mayonnaise.

• Add as a tasty filling to your favorite omelet or quiche.

• Use to create artichoke dip, one of the world’s greatest appetizers (and guilt-free pleasures!).

Baby Artichokes

• Quarter and add to baked pastas, fish and meat casseroles, stews, rice pilaf and quiche.

• Sprinkle with olive oil, garlic and pepper, and oven roast.

Flavor, texture and nutritional benefits

Artichokes deliver flavor, texture and a complete set of nutritional benefits in one little package. Artichokes are more nutrient-dense than the average vegetable and provide a staggering array of health benefits. Artichokes are nutrition all-stars: One medium artichoke is an excellent source of fiber and vitamin C, and a good source of folate and magnesium.

Potassium: Artichokes are an under-recognized source of potassium, a mineral that's vital to maintaining normal heart rhythm, fluid balance, muscle and nerve function. One medium artichoke provides more than 400 milligrams of potassium, about as much as a small banana. There is strong evidence that a diet rich in potassium is linked to reduced risk of stroke. Potassium also blunts the effects of salt on blood pressure.

Magnesium: Magnesium is used in building bones, manufacturing proteins, releasing energy from muscle storage and regulating body temperature. Many adults—especially women—aren't getting enough of this mineral. Artichokes are a good source.

Vitamin C: Artichokes are an excellent source of vitamin C, a water-soluble vitamin that functions as a potent antioxidant. Vitamin C is vital for a healthy immune system. It also is important in forming collagen, a protein that gives structure to our bones, cartilage, muscle and blood vessels. Vitamin C also aids in the absorption of iron.

Fiber: Found only in plant foods, fiber helps maintain a healthy digestive system, lowers blood cholesterol, reduces the risk of heart disease and may prevent certain types of cancer. Fiber also works to keep blood-sugar levels stable, which is especially important for people with diabetes. It can also help create a full feeling which aids in weight control. Artichokes are very fiber-rich, providing six grams in one medium artichoke.

Protein: The USDA Dietary Guidelines for Americans recommends eating more plant-based protein in place of animal-based protein as a way to help reduce saturated fat and cholesterol intake. With no fat, cholesterol or trans fat, artichokes are a healthful source of protein. One medium artichoke provides four grams of protein.

Artichokes contain an array of phytonutrients, or plant compounds that have antioxidant properties and promote human health. Scientists are just beginning to understand which of the dozens of phytonutrients provide artichokes’ anticancer, antiaging, heart-healthy, immunity-boosting and cholesterol-lowering attributes. However, it’s the combination of these powerful phytonutrients in the whole artichoke, along with the vitamins and minerals, that provide health benefits. Some of the most powerful, polyphenol-type antioxidants are found in artichokes, including:

• Quercetin: A flavonoid that works as an anticarcinogen and antioxidant to protect against cancer and heart disease.

• Rutin: A flavonoid that promotes vascular health, helps prevent cell proliferation associated with cancer, and has anti-inflammatory and anti-llergenic properties.

• Anthocyanins: Color pigments that act powerful antioxidants and are associated with a lower risk of certain cancers, urinary tract health, memory function and healthy aging.

• Gallic Acid: A potent antioxidant also found in red wine and black tea that has been shown to inhibit cell proliferation in prostate cancer cells.

• Luteolin and Cynarin: Very powerful polyphenol antioxidants that may lower cholesterol levels and may also help in regeneration of liver tissue.

• Caffeic Acid and Chlorogenic Acid: Contains anticancer, antimicrobial, anti-LDL (bad cholesterol) and antiviral properties.

• Silymarin: A powerful antioxidant believed to aid the liver in regenerative tissue growth.

Smart product designers know they should keep artichokes on the menu year round as appetizers, or to add a special touch a signature dish. Good taste and good business were never so compatible.

Kori Tuggle is the marketing manager for Ocean Mist Farms (www.oceanmistfarms.com), headquartered in Castroville, CA. Ocean Mist Farms has been growing fresh artichokes and vegetables since 1924. The family-owned company is the largest grower of fresh artichokes in the United States with locations in three areas of California: Castroville, Oxnard and Coachella.

Web Resources

California Artichoke Advisory Board

CDC Vegetable of the Month: Artichoke

Taking the Mystery out of the Artichoke

Other Resources

Ocean Mist Farms

Vegetables

Artichoke Nutritional Information

Globe Artichokes, (cooked, boiled, drained, without salt)

Nutrient Value per 100 grams

Water: 84.08 grams

Energy: 53 kcal

Protein: 2.89 grams

Total lipid (fat): 0.34 grams

Fatty acids, total saturated: 0.081 grams

Fatty acids, total monounsaturated: 0.011 grams

Fatty acids, total polyunsaturated: 0.143 grams

Ash: 0.74 grams

Carbohydrate: 11.95 grams

Fiber, total dietary: 8.6 grams

Sugars, total: 0.99 grams

Minerals

Calcium: 21 mg

Iron: 0.61 mg

Magnesium: 42 mg

Phosphorus: 73 mg

Potassium: 286 mg

Sodium: 60 mg

Zinc: 0.40 mg

Copper: 0.127 mg

Manganese: 0.225 mg

Selenium: 0.2 mcg

Vitamins

Vitamin C: 7.4 mg

Thiamin: 0.050 mg

Riboflavin: 0.089 mg

Niacin: 1.110 mg

Pantothenic acid: 0.240 mg

Vitamin B6: 0.081 mg

Folate, total: 89 mcg

Choline, total: 34.4 mg

Betaine: 0.2 mg

Vitamin B:12 0.00 mcg

Vitamin A: 13 IU

Vitamin E (alpha-tocopherol): 0.19 mg

Vitamin K (phylloquinone): 14.8 mcg

Other

Beta carotene: 8 mcg

Lutein & zeaxanthin: 464 mcg

Source: USDA National Nutrient Database for Standard Reference, Release 20 (2007)

NRF’s Top Tips for Buying Gift Cards

Once again, gift cards will be the most requested gift this holiday season. According to NRF’s 2008 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, 54.9 percent of consumers would like to receive a gift card this holiday season, up slightly from 53.8 percent last year. Gift cards will be the most requested gift this year, followed by books, CDs, DVDs, videos or video games (50.0%) and clothing or accessories (49.8%).

Preliminary gift card research conducted for NRF by BIGresearch found that shoppers’ main reasons for buying gift cards were that gift cards allow the recipient to select their own gift (25.4%) and that gift cards are easier and faster to buy than traditional gifts (12.6%). Some consumers say they are enticed to buy gift cards by retailer incentives (6.3%) or because they are easier to ship than traditional gifts (6.7%). Others say gift cards help them stick to their budget (5.7%) or like the fact that a gift recipient won’t have to deal with returning unwanted merchandise (5.1%).

The main reasons why consumers said they would be less likely to buy gift cards this holiday season are because they feel the cards are impersonal (22.7%), that they would rather stretch their dollar by buying merchandise on sale (10.9%), and because they do not want to buy a card with expiration dates or added fees (9.8%). Other shoppers say they simply do not know which gift card a person would want (7.7%), while a small number of shoppers says that they are worried the gift recipient will lose it (3.9%) or that the retailer will go out of business (3.1%).

As the popularity of gift cards continues to grow, NRF offers gift card tips that all consumers should keep in mind while shopping this holiday season.

1. Know the difference between gift card policies from retailers and banks. One in ten consumers (9.8%) says they are discouraged from buying gift cards because they are worried about fees and expiration dates. Shoppers should be aware that there are big differences between store-issued and bank-issued gift cards. According to NRF, none of the gift cards from the nation’s 25 largest retailers have expiration dates and 84% have no fees. On the other hand, gift cards issued by banks, malls, and credit card companies are more likely to add expiration dates and tack on annoying activation, maintenance, inactivity, and transaction fees. Some bank-issued gift cards even charge a fee for simply checking the balance.

2. Buy gift cards from reputable retailers. To ensure that a recipient receives the card’s full value, shoppers should only buy gift cards from reputable retailers (not online auction sites). Gift cards sold through online auction sites are more likely to be counterfeit or obtained fraudulently.

3. Spend your gift card, don’t save it. Because retailers are not allowed to count a gift card until it is redeemed and merchandise is exchanged, retailers will be enticing consumers to redeem their gift cards by holding special sales after Christmas and stocking shelves with new merchandise in January to give shoppers more of a selection.

In many states, gift cards that go unused or unredeemed for more than a few years are often treated as "abandoned" property. Where these laws apply, sometimes in as little as two years, retailers are required to turn over unused gift card dollars to state governments under the guise of returning the “abandoned” money to the gift card purchaser. In fact, states make millions of dollars a year from these clauses. Consumers are encouraged to spend their gift cards within the first year of purchase so that they—not the state where the gift card holder lives—receive the full value.

4. Personalize your gift card. One-fourth (25.4%) of people said they would be less likely to buy gift cards because they think the gift is impersonal, but there are ways to personalize a gift card without breaking the bank. When giving a gift card, make it more personal by packaging the gift card with other small items you know a person would like. Enclose a movie theater gift card with candy and popcorn, or add a pair of earrings with a gift card for a clothing retailer. Personalize the gift even more by buying a gift card from a retailer that allows shoppers to design their own cards with personal messages and photos.

5. Keep your receipt. Some retailers are able to reissue a lost gift card if consumers have kept the original purchase receipt. Many retailers also allow gift card recipients to register their card through the store's website, which enables them to check their balance online and receive a new card if they lose or misplace the original one.

The survey about gifts consumers want to receive polled 8,117 consumers and was conducted for NRF by BIGresearch September 30 – October 7, 2008. The consumer poll has a margin of error of plus or minus 1.0 percent. The survey about positive and negative considerations when buying gift cards polled 4,048 consumers and was conducted for NRF by BIGresearch October 17-21, 2008.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2007 sales of $4.5 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com

Price Pressure Hits Package Goods

Price hikes that have driven top-line growth in package goods -- and marketing budgets along with them -- could be in jeopardy, threatened by a fast-emerging combination of consumer and retailer resistance, rising private-label sales and increased promotion.

Package-goods marketers such as Kraft Foods and Hershey have seemingly defied gravity, with sales buoyed by higher pricing that has largely stuck despite the downturn. But now that retail gasoline prices have plunged 30% to 40% in many markets in the past month, consumer expectations are changing as well.

Sunil Garga, principal at marketing-analytics firm Mphasize, believes marketers will have no choice but to pass along cost savings as fast as they can, though he expects a lag of at least several months. "Some companies are already contemplating or will ratchet down prices," Mr. Garga said. "Companies that don't will get their sales hurt."

He said he anticipates that any increased marketing spending made possible by falling commodity costs will go heavily into incentives and price promotion, given the weak economy and rising unemployment. "Everyone I talk to is worrying about what their revenue is looking like in the next few weeks or months," he said. "So value-conscious offers I think will dominate."

It's already starting. Faced with what could be a brutal holiday season for batteries should consumers cut back on toy and electronics purchases, Spectrum Brands' Rayovac already appears to have boosted promotional spending to win display space, said an executive familiar with the industry. While Rayovac is a relatively small player with a share of around 3% in channels measured by Information Resources Inc., according to data from Morgan Stanley, its actions can have a ripple effect on the bigger branded players -- Energizer and Procter & Gamble Co.'s Duracell.

Consumer resistance
That threatens to end what has been a few years of relative peace in a category long prone to price warfare, particularly around the holiday season.

But it's not just batteries where prices are under pressure. The extent to which consumers are resisting price hikes became clear when Kimberly-Clark Corp. reported earnings Oct. 22, showing a global volume decline of 1% despite healthy organic sales growth of 6% driven by price hikes.

Kimberly-Clark Chairman-CEO Tom Falk acknowledged private-label products are making inroads and that consumers even appear to be cutting back use of paper towels, which had modest category-wide volume declines last quarter.

"We've seen a little bit of shift from training pants into diapers as you're seeing consumers are leaving children in diapers longer and maybe opting for the diaper as less expensive per piece than a training pant," Mr. Falk said.

Kimberly-Clark actually hiked what it terms "strategic marketing spending" last quarter in the face of such consumer resistance, but it's not clear how long it and other package-goods marketers can afford to do so. Any retreat on pricing would severely pressure profits or media spending for consumer package-goods companies, which don't have much wiggle room in their margins right now.

Holding the line
Though marketers are starting to see relief on commodity costs -- particularly oil -- most costs aren't expected to ease until the middle of next year. Meanwhile, fourth-quarter earnings for U.S.-based multinationals are under severe pressure from a sudden strengthening of the dollar, which will slash profits from overseas operations.

Mr. Falk said that he, and so far apparently competitors, are holding tight on price. "We're going to want to be competitive," he said, "but ... there's been so much cost inflation our focus is also to improve our margins."

Private-label products have gained about a percentage point of market share to 24.4% in Kimberly-Clark's categories through the first nine months of the year, mostly at K-C's expense, according to IRI data from Deutsche Bank. And ACNielsen data from Sanford C. Bernstein show private-label share up around 0.8 percentage points from a year ago to 13.3% across a broader array of household and personal-care categories.

Analysts and sales representatives say Wal-Mart Stores also has been pushing back harder against price hikes of late. Grocery retailers such as Kroger Co. and Safeway are also stepping up their private-label efforts, in part to push back against price hikes, according to Sanford C. Bernstein analyst Ali Dibadj.

Ominous signs
In comments to USA Today last week, Wal-Mart Stores U.S. CEO Eduardo Castro Wright said the retailer's private-label sales have doubled recently as the economy headed south and prices headed north.

There's no indication quite that dire yet in financial results of package-goods players. But ACNielsen data that track channels other than Wal-Mart and club stores do show private-label sales grew 8.9% in the four weeks ended Oct. 4 in household and personal care, more than quadruple the 2.2% rate for the category.

So far, no major players have broken ranks on prices officially, but industry watchers debate how much longer they can hold out. "In the more commoditized or single-ingredient categories, the prices are likely to come down faster," Mr. Dibadj said. "On the more [value-added], less commoditized categories [such as skin and hair care], you may have more stable pricing."

Farm-to-table meals let you dine right at the source

On a recent fall night, more than 100 people shelled out nearly $200 to tromp through a rural Virginia field in the near-dark to an outdoor table illuminated only by candles. Their reward? A five-course meal from chef Anthony Chittum of Vermillion in Alexandria that included crispy soft-shell crabs, cornmeal-crusted catfish, bison chops and peach-and-blackberry pie — all made on a makeshift kitchen at the George Washington Birthplace National Monument.

The site was two hours away from Chittum's restaurant but just a stone's throw from the aquafarm where the catfish were raised.

Such farm-to-table dinners — where diners interact with farmers, even eating their meals outside — are the cornerstone behind Outstanding in the Field, a group founded by California surfer-turned-chef Jim Denevan. The group travels around the country promoting locally grown food.

The movement has taken root among foodies around the USA. Chefs nationwide are hosting farm dinners in their restaurants, and organizations such as Meadow Lark Farm Dinners in Colorado and Plate & Pitchfork in Oregon are bringing diners and the meal to the farm.

"When we started doing dinners, 'local,' 'sustainable' and 'organic' were not buzzwords," says Erika Polmar, one of the co-founders of Plate & Pitchfork, which began hosting dinners at Portland-area farms six years ago. "Now everyone is talking about that."

Denevan has seen his events blossom since the mid-1990s, when he first hosted dinners where area farmers came to his restaurant to provide commentary with meals created from their produce. Guests ate up the experience, and the next step seemed obvious to Denevan: take the meal to the farmer's field. In 1999, he hosted three dinners in California farm fields. Half of the guests were family and friends.

That first year "was a money loser," Denevan says. "It was pretty difficult to convince people to come out to the farms. But seeing the farmer give a tour and having the table right at the (food) source, well, that was profound."

In less than 10 years, Denevan has gone from cajoling friends to attend his dinners to hosting hot-ticket events. The group has thrown more than 100 dinners, most of which sell out quickly.

As farm dinners have become more mainstream, the price has increased. Outstanding in the Field dinners started at $60 and are now $180. Plate & Pitchfork dinners began at $75 and now range from $90 to $150, depending on whether the event is also a fundraiser. Denevan says the increase is necessary for the high-end experience he aims to create. Polmar cites rising food costs.

"Not being able to offer these dinners to an audience that isn't affluent is a stumbling block for us," Polmar says. Being able to afford the dinner, however, is the only common denominator among guest lists that blend flannel-clad hippies with Fendi-bag-carrying foodies.

"We see twenty- and thirtysomethings who are coming on date nights," Polmar says. "We get forty- and fiftysomethings in groups. We've had businesses buy an entire table for a client-appreciation night. We wouldn't have seen that six years ago. The client would have thought they were loony."

The changes Polmar has seen go far beyond ticket price.

Today, diners "are much more informed," Polmar says. "People are paying far more attention to how their food is being raised, processed and how it gets to their table."

For the chefs, farmers and organizers involved, that is the point. It's education with a sweet glaze of entertainment. And the foodies who try the farm-to-table experience because it's sexy or adventurous are getting the point, too.

"You lose where food comes from, especially in a city environment," says Pete Webb, 34, who attended Chittum's farm-to-table dinner with his wife. "It was eye-opening to hear from the vintner and the farmer who raises the buffalo. We've been more environmentally conscious. We're buying more local produce. It's already changed our habits."

Eating yogurt every day reduces risk of bladder cancer, study finds

Eating yogurt every day could cut the risk of developing bladder cancer by up to 40 per cent, according to a new study.

Scientists found that those who ate two servings a day were significantly less likely to go on to have the disease than those who ate yogurt only occassionally or not at all.

No benefit was found from regularly eating other dairy products, the study found.

The scientists behind the research believe that bacteria in yogurt could help to fight disease.

The study, by researchers at the Karolinska Institute in Stockholm, Sweden, followed 80,000 patients over nine years.

Asked about their diet, those who went on to develop bladder cancer were less likely to have eaten yogurt regularly than those who remained cancer free, the scientists said.

According to the findings, published in the American Journal of Clinical Nutrition, a couple of yogurts a day reduced the risk of developing the disease in women by 45 per cent and in men by 36 per cent.

"Cultured milk products, such as yogurt, contain lactic acid bacteria, which have been shown to suppress bladder cancer in rats," according to the report.

"Our research suggests a high intake (of yogurt in humans) may reduce the risk."

People who eat yogurt regularly could also be more health conscious generally and likely to look after their body better than others.

Half of all cases of bladder cancer in men and a third of those in women are caused by smoking and experts agree that quitting can significantly reduce the risk of developing the disease.

Around 10,000 people in Britain are diagnosed with the disease every year.

Although it can be treated, left undetected it can spread to other parts of the body.

How Small Stores Can Lure Holiday Shoppers

Call it a customer service Christmas. Consumers are expected to rein in spending this year, and the retail climate favors big-box stores that can offer bargains. But because small retailers can't win price wars (BusinessWeek.com, 4/14/08), experts say independents need to leverage their biggest advantage over the chains: personal relationships with customers and the ability to deliver superior service. With some economists predicting one of the weakest Decembers since 1991, retailers that falter could face a cold winter

"The independent and the small business person are fighting a much steeper battle for sales in a shrinking market," says Eugene Muscat, professor of management at the University of San Francisco. Unemployment reached 6.1% in August, the highest rate since 2003, and while gas prices are down from their summer peak, consumers still face high costs for energy and other essentials. The spending boost from the summer's tax rebates has mostly petered out (BusinessWeek.com, 8/11/08). With shoppers squeezed, the National Retail Federation expects year-over-year sales to rise just 2.2% for November and December, half the average rate of the last decade, the group plans to announce Sept. 23. (Retail estimates exclude spending on cars, gasoline, and restaurants.) TNS Retail Forward, a consulting and market research firm in Columbus, Ohio, predicts a 1.5% growth rate over the fourth quarter last year, while Deloitte Services forecasts between 2.5% and 3% from November to January over the same period last year.

Pursue the Well-Heeled

The outlook for independent stores is bleaker still, says Frank Badillo, senior economist at TNS. "As shoppers become more value focused, they're turning toward big-box retailers," he says. Small retailers can bolster sales by targeting wealthier shoppers who are less price-sensitive and may pay premiums for better service, Badillo says. "Upper-income households often perceive of value in very different ways from lower-income shoppers."

So what can independent retailers do to compete with their larger counterparts? Advice from experts follows:

1. In whatever market they're targeting, small retailers need to court their best customers this holiday season. "During the next three months they need to maximize the one-on-one personal relationships that they have with customers," says Daniel Butler, vice-president for retail operations at the National Retail Federation. "That is the secret weapon that small independents have against big national chains. If I'm savvy and communicate with my customers well, I can draw loyal customers into my store before they go into the national chains," Butler says.

One way to do that is through affinity discounts that encourage loyal customers to spend more, rather than trying to attract new business by cutting prices across the board, says the University of San Francisco's Muscat. "They're going to their customer base, and they're mailing out to their best customers targeted discounts to get them into the store. That's a lot smarter than putting a"70% Off" sign in front of your store," he says. Through affinity programs, retailers can strengthen their relationships with their best customers and appeal to those shoppers' bargain-hunting mood at the same time.

2. Beyond customer service, retailers need to keep inventories lean to keep costs down. Butler says store owners should be especially vigilant in refusing late orders and watching for overshipments to avoid having merchandise they won't be able to sell. In addition, small retailers can take a cue from large chains that display as much merchandise as possible on the floor, rather than holding inventory in the stockroom. "National chains don't have any inventory in stockroom," he says. "They want it to be out there where the customer is."

3. Likewise, stores should watch their staffing levels to control costs. "They want to be able to staff to the peak hours as much as they can," Butler says. That means mostly in evenings and weekends, as most two-income families have little time to shop during the day. Businesses might decide to open later in the morning and extend hours at night to reach more customers without needing to staff more hours.

4. Retailers that sell both online and through physical stores should coordinate their Web and brick-and-mortar strategies, especially in anticipation of "Cyber Monday," the post-Thanksgiving shopping day that's been deemed the online equivalent of Black Friday. Many people browse in stores the weekend after Thanksgiving and then make their purchases online. "If you have a Web site and do business online, you want to make sure you're cross-promoting your Web site with your in-store traffic and vice versa," Butler says. Still, retailers may not be able to count on strong Internet sales. While TNS Retail Forward predicts Web sales will grow 9% this year, that's down from 19% in 2007 and the first single-digit growth rate since 1999.

Pricing in Times of Uncertainty

Maintaining a good relationship with your vendors could help you weather high prices.

It’s like a broken record: Oil is trading higher, the dollar continues to weaken, and the prices of thousands of goods are rising to unprecedented levels. Many have lost money, some have lost jobs, and all are wondering when this will end. The better question is: Have we learned anything along the way?

If the market’s continued volatility still has your company searching for ways to control costs, maintain supply, and forecast the future, consider the following strategies.

Assess your Risk Tolerance

With prices escalating so quickly, it is natural for chains to seek out lower-cost providers, but purchasing agents should thoroughly analyze the potential risks associated with such an endeavor. For many commodity goods, market dynamics have shifted considerably in favor of the seller as a result of increased global demand. As demand increases, so too does competition among suppliers. Consistent with basic economic principles, when demand rises more rapidly than supply, price increases are an inevitable outcome. Consider then, if the price of a commodity rises shortly after committing to a low-cost vendor. The purchasing agent, once a hero for obtaining a lower price, may now be unable to secure supply because the vendor’s low margin pricing cannot compete with the competition.

Should you decide the cost benefits outweigh the potential risks, be sure to validate your choice before ceasing business with the original supplier. Having to return to the first vendor after supply problems is not only humiliating; it can also be very costly.

Know your Vendors

Start thinking of your vendors as business partners, not simply providers of goods that come and go. Developing successful partnerships with suppliers can provide extraordinary benefits. Researching pricing trends and the factors driving market conditions for each product would be an impossible task for purchasing agents responsible for sourcing hundreds or even thousands of goods. Instead, turn to your vendors as a resource for market data, and insist that they be prepared to share industry news, pricing trends, and market insights at your request. The ability to readily provide this pivotal information separates ordinary vendors from strategic sourcing partners.

Strong, lasting partnerships between a vendor and a restaurant chain foster honesty and supportiveness.

Purchasing agents stand much higher odds of gaining a transparent picture of market conditions if the vendor does not have to fear losing the business on account of some bad news regarding pricing trends. Vendors may also be more willing to absorb price increases on your behalf if they have some assurance that you will not abandon them at the first sign of cheaper prices.

Explore Alternative Products

Seek alternative products that could provide cost savings or improved efficiency. Here again, the strategic sourcing partner possesses the product knowledge required to assess your needs and will be prepared to recommend alternatives when substitute products exist. For foodservice customers, for example, substituting vinyl gloves in place of latex could bring substantial cost savings over time. For some, these product substitutions may serve only as a temporary solution, but also relief in times of rising prices.

Of course, substitutions should be tested before committing entirely. Cost savings look great on paper, but can become the source of skepticism if the quality does not meet the standards of the end user.

Maintaining a good relationship with your vendors could help you weather high prices.

It’s like a broken record: Oil is trading higher, the dollar continues to weaken, and the prices of thousands of goods are rising to unprecedented levels. Many have lost money, some have lost jobs, and all are wondering when this will end. The better question is: Have we learned anything along the way?

If the market’s continued volatility still has your company searching for ways to control costs, maintain supply, and forecast the future, consider the following strategies.

Assess your Risk Tolerance

With prices escalating so quickly, it is natural for chains to seek out lower-cost providers, but purchasing agents should thoroughly analyze the potential risks associated with such an endeavor. For many commodity goods, market dynamics have shifted considerably in favor of the seller as a result of increased global demand. As demand increases, so too does competition among suppliers. Consistent with basic economic principles, when demand rises more rapidly than supply, price increases are an inevitable outcome. Consider then, if the price of a commodity rises shortly after committing to a low-cost vendor. The purchasing agent, once a hero for obtaining a lower price, may now be unable to secure supply because the vendor’s low margin pricing cannot compete with the competition.

Should you decide the cost benefits outweigh the potential risks, be sure to validate your choice before ceasing business with the original supplier. Having to return to the first vendor after supply problems is not only humiliating; it can also be very costly.

Know your Vendors

Start thinking of your vendors as business partners, not simply providers of goods that come and go. Developing successful partnerships with suppliers can provide extraordinary benefits. Researching pricing trends and the factors driving market conditions for each product would be an impossible task for purchasing agents responsible for sourcing hundreds or even thousands of goods. Instead, turn to your vendors as a resource for market data, and insist that they be prepared to share industry news, pricing trends, and market insights at your request. The ability to readily provide this pivotal information separates ordinary vendors from strategic sourcing partners.

Strong, lasting partnerships between a vendor and a restaurant chain foster honesty and supportiveness.

Purchasing agents stand much higher odds of gaining a transparent picture of market conditions if the vendor does not have to fear losing the business on account of some bad news regarding pricing trends. Vendors may also be more willing to absorb price increases on your behalf if they have some assurance that you will not abandon them at the first sign of cheaper prices.

Explore Alternative Products

Seek alternative products that could provide cost savings or improved efficiency. Here again, the strategic sourcing partner possesses the product knowledge required to assess your needs and will be prepared to recommend alternatives when substitute products exist. For foodservice customers, for example, substituting vinyl gloves in place of latex could bring substantial cost savings over time. For some, these product substitutions may serve only as a temporary solution, but also relief in times of rising prices.

Of course, substitutions should be tested before committing entirely. Cost savings look great on paper, but can become the source of skepticism if the quality does not meet the standards of the end user.

Popularity of prepared foods grow

Grocery stores say they've seen the popularity of their prepared foods grow as consumers try to save time, money and sometimes calories. And the economic downturn has helped boost the trend as folks trade down from restaurants to dinner at home. So grocers are boosting the selections in response to people's growing appetite for prepared foods.

"When they are trying to return to more meals at home, they don't want to start from scratch like we would a generation or two ago," said Tim Hammonds, president and CEO at the Food Marketing Institute, an industry trade group. "That's why the prepared foods are so popular."

They come in ready-to-eat form — like rotisserie chicken, mashed potatoes or sandwiches. Or there are ready-to-heat styles like stuffed salmon, lasagna or meatloaf that just need to hit the stove.

"I've been doing (this) for years," said Michael Braun, 54, buying his dinner from the New Season's grocery deli counter in Portland. "It's just easier."

Grocery stores have taken note of the popularity.

Last month, Stop & Shop and Giant-Landover supermarkets added more than 100 fresh prepared foods such as soups and bourbon chicken. Last week, Supervalu Inc. introduced a line of more than 150 items that aim to rival restaurant-quality food such as pork carnitas enchilada casserole and pineapple upside-down cake.

Cincinnati-based Kroger Co., which has long offered prepared foods at its stores, recently expanded its options to include items such as lobster bisque, baked ziti and dinner packages that feed a family of four for $10.

But many grocers say they are seeing the biggest growth in simple comfort foods.

Whole Foods Market Inc. said its best-sellers include macaroni and cheese and mashed potatoes in some stores. The company has recently added a "family-size savings" program that allows shoppers to get a discount when they buy two or more pounds of some prepared foods.

"They can basically pick up dinner in one stop," said Whole Foods spokeswoman Libba Letton.

About 28 percent of shoppers do not know what they are having just two hours before the meal, according to the Food Marketing Institute, making the meal a great opportunity for grocers.

"I would think almost everybody is going to have their stores outfitted with a full-blown foods offering because they have to, or folks will go down the street," said Jack Horst, a grocery specialist and principal at retail consulting firm Kurt Salmon Associates.

He said it's part of the trend of grocery stores expanding their offerings, trying to draw shoppers in with Web sites, recipes, cooking classes and other options beyond the traditional supermarket fare.

Hammonds said it's a change that isn't likely to end when the economy improves.

"It accelerating basic trends — recognizing that food at home is healthier, there is better control of the calories, content of food, less expensive and in tune with family values," he said.

"We are seeing the economic downturn speed up a transition that is tune with their lifestyles."

Vitamin D again linked to breast cancer protection

Increased intake of vitamin D from the diet and from sunlight may reduce the risk fo breast cancer by over 20 per cent, says a new study.

The potential protective effects of the vitamin were not limited by the hormone receptor status of the tumours, according to research published online in the American Journal of Epidemiology.

“This study suggests that vitamin D is associated with a reduced risk of breast cancer regardless of [oestrogen-receptor (ER) positive and progesterone-receptor (PR)] status of the tumour,” wrote lead author Kristina Blackmore from Mount Sinai Hospital in Toronto.

Over one million women worldwide are diagnosed with breast cancer every year, with the highest incidences in the US and the Netherlands. China has the lowest incidence and mortality rate of the disease.

Hormone-sensitive oestrogen-receptor (ER) positive and progesterone-receptor (PR) positive tumours are said to be the most common type diagnosed among breast cancer patients in the US. These tumours are stimulated to grow by the female hormones oestrogen and progesterone.

Study details

“Few epidemiologic studies have considered the association between vitamin D and hormone-receptor-defined breast cancer,” wrote Blackmore.

In order to start filling this knowledge gap, the Canadian researchers analysed the vitamin D intakes of 759 women with breast cancer, and compared this to the vitamin D intakes of 1,135 healthy controls.

Increased intakes of the vitamin were associated with a 24 per cent reduction in the risk of developing ER+ and PR+ tumours, said the researchers. Moreover, increased intakes were also associated with 26 and 21 per cent reductions in the risk of receptor-negative (ER–/PR–) and mixed receptor (ER+/PR–) tumours. However, these last two associations were not significant, said the researchers.

“Future studies with a larger number of receptor-negative and mixed tumours are required,” they concluded.

D and the big C

The link between vitamin D intake and protection from cancer dates from the 1940s when Frank Apperly demonstrated a link between latitude and deaths from cancer, and suggested that sunlight gave "a relative cancer immunity".

Vitamin D refers to two biologically inactive precursors - D3, also known as cholecalciferol, and D2, also known as ergocalciferol. Both D3 and D2 precursors are hydroxylated in the liver and kidneys to form 25- hydroxyvitamin D (25(OH)D), the non-active 'storage' form, and 1,25-dihydroxyvitamin D (1,25(OH)2D), the biologically active form that is tightly controlled by the body.

There is growing evidence that 1,25(OH)2D has anticancer effects, but the discovery that non-kidney cells can also hydroxylate 25(OH)D had profound implications, implying that higher 25(OH)D levels could protect against cancer in the local sites.

Casual dining chains hunger for change

If there's one moment that crystallizes the sorry state of the casual dining industry, it's Ruby Tuesday's (RT) gambit this summer to blow up a store "live" online.

Kaboom! Bye-bye, old store.

There's growing sentiment that this is something the whole $75 billion casual dining industry needs to do. We know their names — such as T.G.I. Friday's, Chili's (EAT), Applebee's (DIN) — but over the years, too many of the nation's 81,000 casual dining restaurants have come to look, taste and feel the same.

The segment's same-store sales (a key retail measure comparing stores open at least 16 months) are down 1.8%, and same-store traffic is down 4.3% through the first eight months of this year, reports Knapp-Track, which tracks industry sales.

And that was before the economy really went south. Now, who's got dough to blow at a sit-down restaurant with prices rising at a rate that will make you sit up?

Ruby Tuesday didn't really blow up a store. It was a made-to-go-viral online video stunt supposedly ending with a rival's store being blown up by mistake. And it was a Web hit that was a Hail Mary attempt to shine lights on the fact that Ruby Tuesday just spent $70 million to reinvent itself with new décor, a new menu and even new duds on its servers.

Even with the publicity bump, the chain's same-store sales are off.

"We rested on our laurels too long — and now we're paying for it," says Sandy Beall, CEO of Ruby Tuesday, speaking not only of his company, but of all casual dining — known for full service, alcoholic beverages and check averages of $10 to $23 a person.

These tough times are forcing the industry to rethink, retrench, reprice, redesign and even re-imagine — just as the credit squeeze has been choking access to financing to do it.

Meanwhile, competition is coming from all directions. Improved fast-food menus are stealing business.

So-called fast-casual chains such as Panera Bread and Chipotle — no waiters and higher quality than fast food — keep stealing share. Ever-expanding prepared foods sections in supermarkets keep gobbling business.

"What worked yesterday isn't going to work tomorrow," says Doug Brooks, CEO of Brinker International, parent to Chili's. He's in the midst of reinventing Chili's with new décor and menus, along with technology to speed service.

Casual dining's leaders may want to mimic what McDonald's did five years ago when the then-struggling chain went on a tear to improve food quality, speed up service and boost public perceptions. It worked.

"McDonald's (MCD) is the poster child for proper strategy," says consultant Malcolm Knapp. "They were written off as dead, but they found a way to become relevant."

That's where casual dining wants to get. But it won't be easy. Even McDonald's has recently felt the pinch of tightening credit. Last month, it warned franchisees that Bank of America had squeezed lending to restaurant owners but later said sufficient credit was there.

Reducing the glut

With way too many restaurants serving far too few customers, at least 1,000 casual dining units will close over the next 12 months — helping to lessen the glut of casual dining spots, says Ron Paul, president at researcher Technomic. "In the eyes of consumers, these restaurants are the same. There are too many. They are too similar. And their prices got out of whack."

That may be an understatement. Just three of 30 restaurant companies that offer guidance on same-store sales trends see improvement before 2009, says a report from securities analyst Jeffrey Farmer at Jefferies & Co.

The Bennigan's and Steak and Ale chains made Chapter 7 bankruptcy filings this summer, shuttering hundreds of stores. Pizzeria Uno is in financial hot water. Lone Star Steakhouse closed 26 stores earlier this year.

Darden, thought to be above the fray, has felt the pain. The owner of Olive Garden, (DRI) Red Lobster and four other chains says same-store July sales at Red Lobster were down 3.7%.

Last year, Darden closed 56 Smokey Bones units and sold off the rest. Applebee's closed 24 underperforming restaurants last year, and parent DineEquity has struggled to sell company-owned units to franchisees to pay down debt.

"In a crowded marketplace, we are working very hard to stand out from the crowd," says Julia Stewart, DineEquity's CEO.

What do these chains need to do to survive and thrive? Here's what top casual dining executives, consultants and consumers told USA TODAY:

•Stand out. Casual dining's long-term problem is one that vexes all companies as they age: how to stay fresh, while offering a unique draw to which no one else in the category can lay claim. Such as Cheesecake Factory's (CAKE) giant portions. Outback's high-quality steaks. Olive Garden's Tuscan-like ambience. And Seasons 52's bite-size desserts.

"Each concept must stand for something unique to survive," says Christopher Muller, an industry consultant.

Chili's turned its familiar chili pepper into a towering icon outside its stores to symbolize that things also have changed inside. "It's all about getting out of the sea of sameness," says Brooks.

•Lower prices. More than anything, high prices are what rile USA TODAY readers.

"The prices used to be reasonable, so you could go out more often," says Marcia Lafferman of Paradise, Calif. Now, she says, casual dining prices have crept so high, she's stopped going.

To save money, Brace Cain, an events planner from Atlanta, stopped going to casual dining spots for dinner but goes at lunch, when prices are lower.

While most casual dining chains continue to raise menu prices 1% to 3% every six months — with commodity and labor costs rising — many have been trying splashy specials. Some of the biggest chains are touting $9.99 dinner deals and $5.99 lunch specials.

Seeking more than a temporary — and profit-zapping — boost from discounts, others are trying new tactics. T.G.I. Friday's "Right Portion, Right Price" dinner menu offers smaller entrees starting at $6.99.

One day this summer, Cheesecake Factory rolled back cheesecake prices to $1.50. It resulted in huge lines, says marketing chief Mark Mears. Now, the chain is rolling out a customer loyalty card with incentives to return.

Small freebies — even a free cup of coffee — are a restaurant's lowest-cost marketing with the highest returns, says Dennis Lombardi, executive vice president at consultant WD Partners.

•Fix the food. Casual dining's takeoff 20 years ago was driven a lot by the fact that the food quality far exceeded fast-food offerings — but the prices did not.

That changed drastically in recent years, says Jeff Davis, president of Sandelman & Associates. Fast food's quality has gone way up, but the prices have risen relatively slowly

.

At the same time, casual dining's food quality and innovation stagnated, even as its prices kept creeping up, he says.

Few are making a more concerted effort to improve the food than Ruby Tuesday.

Four years ago, its flimsy, paper menu focused on finger foods and $6.99 burgers. Earlier this year, it replaced that with a stiffer cardboard menu featuring luxurious photos of its $13.99 New Orleans seafood entree (now served with brown rice instead of white) and upgraded, prime burgers starting at a hefty $9.49.

Ruby Tuesday is gambling big time that quality ultimately will trump price.

When the economic storm clouds clear, says Beall, "Consumers will focus less on price, price, price and more on food quality."

•Improve service. Slow service and discourteous staff have given casual dining a black eye.

Lengthy waits for meals "don't reflect how Americans eat," says Kyle Kieper, vice president at FRCH Design, a consulting firm.

Chili's is trying to knock 15 minutes off the typical 45-minute lunch for customers who want to save time, says Brooks. It's testing new, handheld BlackBerry-like devices that directly connect the front desk and servers to the kitchen, says Brooks.

It's also testing new ways to screen potential employees. Instead of managers hiring by instinct, it's testing applicants with skill questions. As a result, the turnover rate is down 25%.

Ruby Tuesday's staff no longer wears casual shirts and jeans but long, black aprons. "It's more professional looking," says Beall.

Nickole and Ron Ketterer are more concerned about how servers behave than what they wear. The couple haven't been back to Outback Steakhouse in more than two years since a server and a manager very publicly argued with them about how steak was cooked. That's too bad, because the couple from Fort Thomas, Ky., used to be regular customers.

•Spiff up stores. "We have an entire industry of 20-year-old locations," says Marc Buehler, CEO of Lone Star Steakhouse. "They need more than a coat of paint."

Even Lone Star, which has had a rough financial year, is slowly spiffing up. This year, it's remodeling six of its 153 stores. Out with the beat-up concrete floors and in with polished wood. Out with fading tablecloths, in with oak tables. More locations will follow.

Ruby Tuesday, meanwhile, has redesigned all of its company-owned restaurants over the past six months. The dark, knickknack décor has been replaced by contemporary designs and lighter colors.

•Get kid-friendly. Families are a big part of casual dining's business, and for many parents, what matters most is how happy their hungry kids are.

Parissa and Derek Eggleston of Millersville, Md., have mostly kissed off casual dining now that they have a 5-year-old son and 2-year-old daughter.

And when they do go out, says Parissa, "We hold our breath."

Looking for casual dining spots to be more kid-friendly, she wonders if they could install kid playgrounds. Or maybe they could lend kids handheld video games at the same time parents are handed those electronic pagers.

The last time they went to Chili's, her son dumped the salt and pepper shakers into his water glass while awaiting dinner.

One small victory: She stopped him before the sugar went, too.

Customers cutting back on going to Starbucks

Starbucks Corp. has spent the past year attempting to revive traffic with new products and a renewed emphasis on coffee, but lapsed customers would be more likely to come back for lower prices, according to a survey of 2,500 coffee drinkers.

The research, conducted by Morgan Stanley & Co. Inc. and released Tuesday, found that nearly one-third of Starbucks’ customers have cut back on visits in the past three months. Just 17 percent of McDonald’s guests and 18 percent of Dunkin Donuts’ patrons say they’ve similarly tempered their traffic at those brands, Morgan Stanley said.

Of the Starbucks customers who are decreasing their visits, 84 percent blamed economic pressures. When asked what would increase their visits to Starbucks, 65 percent cited lower prices.

The conclusions run contrary to the view by Starbucks management that declining sales could be reversed with the introduction of new, more healthful menu options, as well as better brewing equipment and barista training. All have figured into what the coffee giant describes as a year of transformation that began in January.

According to the survey, 31 percent of the existing Starbucks customers who participated said a more aggressive customer rewards program would boost the number of their visits. Starbucks launched a reward program earlier this year that offered repeat visitors free flavor shots, refills on brewed coffee and free WiFi service.

The survey also found that Starbuck’s offer of $2 drinks after 2 p.m. did not bring in many new customers and was favored only by heavy users. Most customers want to stop at Starbucks only once per day, the survey found.

While new beverages like the Sorbetto drink in Southern California and the Vivanno smoothies were well-received, they are consumed infrequently and could prove seasonal, according to the report.

The surveyed customers gave a tepid assessment of Starbucks’ recent menu additions. Fewer than 10 percent said they were interested in the chain’s new oatmeal, which officials have touted as a strong seller. Other new products include whole-grain pastries and a protein plate. The survey was conducted before Starbucks introduced its new baked breakfast sandwich, called the Piadini, last week.

The introduction of new gourmet coffees by McDonald’s does not appear to be tempting customers away from Starbucks, according to the survey.

When asked what would cause them to switch to McDonald’s for their coffee, 48 percent of Starbucks customers said they had no interest in switching. However, more than half the respondents who said they are visiting McDonald’s more often reported trying and liking the burger chain’s new specialty coffees.

Both Starbucks and McDonald’s coffee drinkers believe their respective brands are more convenient, but Starbucks customers agreed that McDonald’s offered better value. The report concluded that Starbucks needs to improve the perception of its value to recapture lapsed guests.

Half of the customer-respondents, however, said they would go to another Starbucks if their local store was closed, indicating the company could see a comparable-store sales bump of two percentage points in fiscal 2009 from the previously announced closure of 600 units, according to the report.