|By Emily Bryson York, Chicago
TribuneMcClatchy-Tribune Regional News
Sept. 09, 2011--While casual steakhouses are struggling, fancy steakhouses are booming -- especially in Chicago. The city has seen an 18 percent jump in fine-dining steakhouses for the year ended in March.
One of the newest downtown restaurants, at 505 N. Michigan Ave., drew instant attention for being named after one of Chicago's most beloved residents: Michael Jordan.
Last year, three acclaimed steakhouses opened in River North alone: Benny's Chop House, 444 N. Wabash Ave.; Mastro's, 520 N. Dearborn St.; and Chicago Cut, 300 N. LaSalle St.
Fine-dining steak restaurants also have been springing up nationwide, with locations up 9 percent from a year ago. The growth is being driven by independent restaurants, up 23 percent across the U.S. and a whopping 83 percent in Chicago.
By contrast, casual-dining steakhouses are closing, with locations down 5 percent in the U.S., and 6 percent in Chicago, during the past year. This category includes Outback Steakhouse, Texas Roadhouse and LongHorn Steakhouse, which offer full service but a casual atmosphere and the possibility of dinner for less than $20 per person. At the next level, "contemporary casual," dinners run $25 to $50 at such places as Fleming's Prime Steakhouse & Wine Bar or Brazilian steakhouses such as Fogo de Chao.
Dinner at a fine-dining steakhouse with white tablecloths, extensive wine lists and prime beef, such as Morton's the Steakhouse or Chicago Cut, is likely to run $50 to $100.
Bonnie Riggs, a restaurant industry analyst with the NPD Group, attributed some of the increase in locations to available real estate. According to a recent NPD report, 9,450 restaurants closed in the year ended March 31. The vast majority were independently owned.
Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant industry consultancy, said fine-dining steakhouses are bouncing back faster than their lower-priced counterparts "because affluent consumers are hitting better employment numbers than the lower middle class."
Also, businesses are again spending more to take clients out to dinner. At some finer steakhouses, Tristano said, expense accounts account for 70 percent or more of sales.
Roger Drake, senior vice president of marketing and communications at Morton's, said the Chicago-based chain has posted its sixth consecutive quarter of same-store sales growth since the depths of the recession. He credits the chain's work in social media; adding windows to some of its dark, clubby restaurants; the expansion of its Bar 1221 concept inside restaurants that offers lower-priced "bar bites," and the return of business travel.
"Business travel is a big part of our business," Drake said. "They're back traveling again, and we're seeing really good signs."
Baby boomers in particular are fueling the steakhouse resurgence, Tristano said, if only because younger people don't have the money to spend on a $100 steak-and-martini dinner. And despite the rapid growth in high-end steakhouses, he added, there probably is room for growth. Nationally, steakhouses are outnumbered by Mexican, Italian and seafood-themed restaurants.
Aside from the business clientele, Riggs said that deal sites such as Groupon have helped bring consumers back to steakhouses. The question remains as to whether there is enough business to sustain them, especially since consumer sentiment has been backsliding.
And deals offered during the worst times might backfire if customers no longer see value at the usual prices.
"They're kind of letting the consumer know that they've been taken advantage of a little bit," Riggs said. "It's going to be difficult for them to go back."
(c)2011 the Chicago Tribune
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