Arby’s: Not Just Roast Beef Anymore

Discussion
Jun 25, 2004
George Anderson

By George Anderson


Arby’s is known for its roast beef sandwiches.


That was a big part of the problem faced by the chain, according to its largest
franchisee, company president and consumers.


Tom Garrett, president of RTM Restaurant Group Inc., Arby’s biggest franchisee,
told the Associated Press, “Our pipeline simply dried up and Arby’s for
a short period of time really became irrelevant given the focus on health and
nutrition.”


Former RTM executive and current president and chief of Arby’s, Doug Benham,
agreed. “We didn’t have a lot of new product news. I think our competitors were
coming out with more and more – I’ll call it high-end products.”


Mr. Benham was brought into Arby’s in December to get new menu items into the
pipeline. The company’s Market Fresh salads with fresh-cut apples, dried cranberries,
toasted almonds or mandarin oranges have begun to change some consumers’ perceptions
of Arby’s as a place for roast beef and burgers.


One consumer, Sonia Beato, said she had stopped going to Arby’s because they
didn’t have salads that appealed to her. She added, “We saw the ads about new
salads and they were so delicious that we’re going to come back.”


Arby’s Benham said the chain is not going to stop at salads. “Our strategy
is … to continue to come out with products that meet the nutritional alternatives
that our customers want. And whether it’s low carb, low fat, whatever the next
thing is,” he said.


Moderator’s Comment: What are your thoughts on the
menu trends in the QSR business? What restaurant operators are making the most/least
of the present opportunities?


Michael Gallo, an analyst who follows Triarc for brokerage
firm C.L. King & Associates, said keeping customers coming back to your
restaurant means, “You’ve got to constantly have fresh and new products. Arby’s
was late, but better late than never. … Benham is doing what needs to be done.”


At what point, we wonder, do consumers start to think
it doesn’t matter where they go since every QSR offers essentially the same
items?


We also wonder at what point do expanded menus begin to
cause problems (inventory costs, product handling, marketing, etc.) for the
restaurants themselves?

George Anderson – Moderator

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