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Maggiano's Little Italy
Maggiano's traffic turned positive this past quarter, something that hadn't happened in nearly three years.

For Maggiano's, Authenticity Drives Innovation

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No matter what happens in the restaurant industry, the classic Italian brand won't change what it stands for.
By Danny Klein March 2019 Chain Restaurants

We’ve all heard the restaurant peril, “trying to become all things to all people.” But what if we looked at it another way. One of the dangers brands face, especially those with strong guest affinity, is the temptation to chase another restaurant’s core equities. It’s working for them, why can't it work for us? Perhaps, more than any other trait, this is where Maggiano’s Little Italy draws a line in the competitive sand, says Larry Konecny the Brinker International chain’s VP and chief concept officer.

It’s the simplest answer he can provide as to why Maggiano’s racks up consumer awards. “I think being authentic is critical,” he says. “It can’t just be a strategy. It has to be a part of your brand essence. So anytime we do any menu innovation or change any design element, or any cue that the guest notices, we have to be aware of who we are and what we stand for.”

In January, Market Force Information released its annul study—one of the most cited in the industry—ranking America’s favorite restaurant chains. No. 1 on the list: Maggiano’s, which scored 64 percent on the “composite loyalty index” metric used to measure brands. It finished a point ahead of casual-dining powerhouse Texas Roadhouse, one of the steadiest performers in the business. First Watch (58), Cracker Barrel (58), Cheddar’s Scratch Kitchen (57), and LongHorn Steakhouse (56) were close behind. See the entire list here.

Just a couple of weeks ago, Maggiano’s grabbed another crown. For the seventh straight year, AllergyEats ranked the brand atop its list of the most allergy-friendly large chains (50 or more locations) in the country.

Maggiano's Little Italy
Chefs are put on the cover of each menu at Maggiano's, showcasing its unique commitment to culinary.

“I think what the [Market Force] honor says is that we’re successful in our goal to offer great food, offer great hospitality, and do it in an environment that’s a step above a normal dining occasion,” Konecny says. “It says everything we’re doing, it’s paying off. We’re doing a great job in hitting those marks.”

Recent financial results provide backbone to the survey sentiment. The 53-unit (there is only one franchise) brand’s same-store sales climbed 1.8 percent in the second quarter, year-over-year. That as traffic upped 1.3 percent versus a 0.4 percent decline in the comparable period. It marked Maggiano’s first positive traffic quarter in nearly three years.

Here’s a look at the trends:

Comparable sales trends, year-over-year

  • Q2 2019: 1.8 percent
  • Q1 2019: Flat
  • Q4 2018: 0.3 percent
  • Q3 2018:  0.5 percent
  • Q2 2018: 1.8 percent
  • Q1 2018: –2.6 percent
  • Q4 2017: 0.5 percent
  • Q3 2017: –1.6 percent
  • Q2 2017: –0.8 percent
  • Q1 2017: –0.6 percent
  • Q4 2016: ­­­–1.7 percent
  • Q3 2016: 0.2 percent
  • Q2 2016: –1.8 percent

Comparable traffic trends, year-over-year

  • Q2 2019: 1.3 percent
  • Q1 2019: –2.1 percent
  • Q4 2018: –1.6 percent
  • Q3 2018: –1.4 percent
  • Q2 2018: –0.4 percent
  • Q1 2018: –2.8 percent
  • Q4 2017: –2.1 percent
  • Q3 2017: –5.4 percent
  • Q2 2017: –2.5 percent
  • Q1 2017: –1.6 percent
  • Q4 2016: –1 percent
  • Q3 2016: 1.1 percent
  • Q2 2016: –2.9 percent

Brinker CEO Wyman Roberts said in a conference call that all aspects of Maggiano’s business—dining room, banquets, takeout, and catering performed well. It set more than 100 sales records in the quarter, including a record-breaking $3 million day across the brand. Maggiano’s 22-year-old Tyson’s Corner, Virginia, store also achieved the busiest day for a single restaurant ever at nearly $116,000.

Additionally, Maggiano’s debuted its first non-traditional location since being founded on the corners of Clark Street and Grand Avenue in Chicago in1991. The Dallas Fort Worth International Airport unit, a partnership with HMSHost and Java Star Inc, opened in November and seats 225 guests in two dining rooms divided by a bar area. HMSHost, which runs 17 Chili’s spinoffs, Chili’s Too, in airports nationwide, branded the concept with “M” signage and put it in Terminal C, DFW’s busiest section.

Also Maggiano’s first franchise, Roberts said the venue has been a hit so far. And later in 2019, Brinker will bring a second airport Maggiano’s to life.

Maggiano's Little Italy
Maggiano's hasn't been hit as hard by the mall crisis as some. The reason: A-plus properties and remaining a destination restaurant.

But focusing on the legacy footprint, Maggiano’s has done an enviable job weathering America’s mall troubles. Most of the chain’s locations fall into one of two categories: mall restaurants, or restaurants near a mall. Recent data suggests the overarching notion that malls are dying is a grossly exaggerated point. MasterCard said 2018 sales were up 7.9 percent, year-over-year—the best since 2010. Developers are reimagining the mall landscape with new entertainment, restaurant concepts, and smart technology. And sales, including in the food court, are trending upward.

What it really boils down to is a gap between class A properties and less-prime outlets. The latter is really where foot traffic is fleeting. That split between top real estate and everything else is sharp. Currently, the overall national retail vacancy rate is low. Statista data shows that vacancy rates are expected to rise slightly to 12.1 percent at the beginning of 2019, fall to 11.9 percent in the second quarter, and then rise to 12.3 percent by year’s end.

For the most part, though, none of this has affected Maggiano’s all that much. For starters, the upscale casual brand typically targets high-volume and prime real estate over units it can fill quickly and at a low cost. Similar to The Cheesecake Factory. It’s one reason there’s only 53 units and no need to grow for the sake of growing.

The other factor is something more ironclad. Maggiano’s isn’t a concept that counts on spontaneous traffic. “The reality is, in malls, we are a destination,” Konecny says.

Maggiano’s, he adds, ends up in or near malls not because it’s seeking crowds. “Typically we’re in that location because the same demographics that made the mall open there show up on our radar, too,” Konecny says. “So I think accessibility and some of the attributed specific to the site are more critical at times [than the foot traffic].”

Maggiano's Little Italy
At Maggiano’s, it’s all about “equity of abundance.”

Standing out

Konecny’s notion, “don’t chase other brand’s core equities,” shines a light on the opposite reality for Maggiano’s: Guard those values that define your brand. Maggiano’s looks at innovation and technology as a vehicle to improve customer satisfaction; not replace in-store human elements. Driving those decisions, however, is what Konecny calls Maggiano’s, “equity of abundance.” People have developed an affinity for the chain over the years because it’s a celebratory experience. They expect great food, and lots of it. You don’t take your family out for graduation to a place that disappoints or leaves someone asking for more.

“We are fortunate that a lot of our guests have fond memories of Maggiano’s from their past. We have a special place in their heart,” Konecny says. “Many of our guests have celebrated weddings or rehearsal dinners or birthdays, and so I think over the years we’ve gained some loyal fans, and we continue to do so.”

And how do you keep them? By using the tools at hand to keep delivering and delivering in new ways—not cut back on recognizable elements. One example: Maggiano’s has offered delivery for about a decade. So it’s well ahead of most casual brands in the off-premises space. Yet take-out and catering have spiked over the past couple of years as millennial consumers drive the convenience conversation into uncharted territory. As at-home occasions rise, restaurants are forced to translate their four-wall experience into a grab-and-go format. This is one area some brands go astray. It sounds straightforward, but serving a new occasion and customer poorly turns an incremental possibility into a brand value nightmare. McDonald’s says it sees incrementality around 70 percent for delivery, with high repeat orders. But what if that guests had a terrible experience? It might be business the restaurant wasn’t getting before, like over-indexed late night or younger consumers, but it’s business they won’t get again. Incremental ends up being a one-time result, not a serious, long-term revenue driver.

For Maggiano’s, this chance came down to understanding their core guest and delivering to that promise. The brand created a double-the-portion menu where consumers can double anything on the carryout menu for about half the price of the original dish.

“As opposed to running an LTO or pulsing in some coupon strategy we decided to chase permanent value on the carryout menu,” Konecny says. “This way guests could have the same Maggiano’s grand experience, but they could do so in their own home.”

Maggiano’s delivers in-house (minimum orders of $125) but does work with third-party vendors in certain markets to grab share in that smaller-order space. There’s also an internal catering program where Maggiano’s deploys its own vans. Maggiano’s created a pasta bar, focused on customization, so it could differentiae from the typical big-pan packages of old.

“People will eat more food outside of restaurants than they did last year, and I think that will continue over time,” Konecny says. “So we just want to be positioned to be authentic to our brand and provide the experience that someone would be used to if they came and ate at our restaurant.”

“I think you could ask anybody who works for Maggiano’s what our passion is, and they would tell you it is to make people feel special. And that’s the core of it.” — Larry Konecny, Maggiano's COO.

Maggiano’s has a menu designed for off-premises orders, highlighting the items it thinks will travel well. Guests can still request anything off the regular menu, however, if they want.

Given the family style nature of Italian food, Konecny says, some customers have figured out how to use Maggiano’s to-go menu to feed their entire family or themselves for multiple nights. Seeing this unfold in real time, the brand wanted to encourage guests. It created bundles to help along those customers who weren’t as hip to the possibilities. In the $50–$60 range, these cover the basics—salad, protein, and pasta, for example, and can run a couple of weeks at a time as Maggiano’s collects data. “It’s more of a teaching tool than anything else, just to get guests comfortable with using us for carryout,” he says.

Take another relatively recent change. In February 2017, Maggiano’s updated its menu for the first time since inception, introducing brunch systemwide. It unveiled 12 new menu items with a focus on Benedict options. Previously, Saturday and Sunday mid-day occasions were slow for Maggiano’s. Diving into a daypart and segment it missed before was a no-brainer. Making sure it fit the brand’s proposition? That was the next step.

Why offer five different kinds of Benedicts, all made from scratch? Because it’s something consumers can’t do at home, Konecny says. And that’s how Maggiano’s thinks. “We want to keep in line with our made-from-scratch food positioning, and then also offer something special that you may not make at home, or something that may not be as available in other restaurants. Even on an occasion like brunch that’s intended to have a higher frequency than, say, your birthday dinner.”

Brunch has stretched Maggiano’s operationally because of the complexity, Konecny says. “But we can do that because of the chefs in our kitchen … It was a great strategy to fill some slower dayparts but also protect the upscale prestigious offering around or food,” he adds.

Protecting the brand

Maggiano’s empowers employees to interact with guests, Konecny says. This is a critical four-wall initiative. Because on any given night, there could be a couple celebrating their 50th anniversary sitting next to a family who just needed to reset, reconnect, and take a night off from cooking.

Konecny says Maggiano’s heavily corporate structure has allowed it to adjust and reinforce training at the store level.

The chain also uses its hefty email database for the typical things—promotional emails, new menu items, to prompt trial, etc. But where Maggiano’s differs is communicating special events, which, again, speaks to the dine-in traffic promise. Wine dinners. The always popular kids cooking classes. “I think we use it to try to connect closely with the guest and make sure of the hundreds of emails they get a day our message is differentiated and it’s something they want to open,” Konecny says.

Perhaps the most recognizable, un-chain-like trait of Maggiano’s is its chefs. Every 30 days the brand features a menu of new dishes. It puts pictures of each chef on the menu of every individual location. They make table visits and discuss allergies or any other food preferences with guests. “It’s pretty cool,” Konecny says. “Because you just saw the chef on the menu and then they’re at your table.”

It’s a hefty investment, he adds, but one the brand is happy to make.

“I think you could ask anybody who works for Maggiano’s what our passion is, and they would tell you it is to make people feel special,” he says. “And that’s the core of it.”