LongHorn adjusts to life with Darden

By Rachel Tobin Ramos

The Atlanta Journal-Constitution

LongHorn Steakhouse opened in 1981 with a single restaurant on Peachtree Road, where it got off to a slow start until a rush-hour snowstorm sent people inside for refuge. That helped generate the word-of-mouth marketing that turned it into a local institution.

Nearly three decades later, LongHorn is part of giant Darden Restaurants, which bought its former owner, RARE Hospitality, for $1.19 billion in 2007.

The steakhouse chain has 323 locations -- up from 287 pre-Darden -- in 30 states, plus five in Puerto Rico.

But LongHorn is still an upstart compared to No. 1 Outback Steakhouse, with 950 units, and runs third behind Texas Roadhouse in revenue even though it has slightly more units, according to the Nation’s Restaurant News annual ranking.

Dave George, LongHorn’s president, recently was in Atlanta for a series of company events and talked about the homegrown chain’s future.

George, who became president in 2003, was a protege’ of LongHorn founder George McKerrow Jr. and its later leader, Phil Hickey Jr. (McKerrow is now president and CEO of Ted’s Montana Grill and Hickey is the former CEO and chairman of RARE Hospitality).

George said Darden -- also owner of Red Lobster and Olive Garden -- does business on a much bigger scale. Red Lobster and Olive Garden already have about 689 and 692 units, respectively.

“They’ve already been through what I’m about to go through,” he said.

For one thing, Darden uses sophisticated consumer feedback.

“Last year, across all of Darden’s brands, we solicited input from 16 million people,” said George.

A more tangible change: Under Darden, LongHorn’s decor has changed from “roadhouse” to “ranch house,” and its new slogan is “Discover the West in you.”

Q: Did you work with George McKerrow, LongHorn’s founder?

A: George brought me into LongHorn. He’s a great guy. An entrepreneur. An inspirational leader. His heart and soul went into the brand. I am just hoping to fill his shoes.

Q: Do you consider Ted’s Montana Grill a competitor?

A: It was founded on the same principal as LongHorn, which is high-quality food, great service, and a unique and genuine environment. We probably compete with each other at lunch based on our menus, but Ted’s is not so steak-centric.

Q: What determines new menu items?

A: One of the great benefits of Darden is the intense brand management, with marketing and consumer insight teams. They do deep-seated consumer research about what people are looking for in a menu. They will take 30 menu items and ask consumers which would stimulate a new visit by you. Once we have the top three concepts, we ask the chefs to create them, then we test them in 20 restaurants for four to five weeks. Then we have our finance department analyze what sold, how much, if it helped or hurt our margins and improved our guest satisfaction scores.

Q: This sounds like a lengthy process.

A: It takes six to seven months. Now we are testing for our March menu planning.

Q: Give me some examples of what made the menu this way.

A: Our potato chips with creamy BBQ sauce and our wild shrimp appetizer, which is now our No. 1 selling appetizer.

Q: How else does being part of the Red Lobster and Olive Garden parent company help you?

A: They’ve been through the things I’m wanting to go through. Our goal is to become a national brand with 600 to 700 stores -- they’ve already gone through that. One reason Darden bought LongHorn was to grow the brand.

Q: Have you had to lower prices due to the recession?

A: It’s a tough environment for consumers and restaurants. We’ve tried to improve the overall quality of the experience. A lot of people are discounting. It’s tough to compete with Denny’s and IHOP giving away food. Couponing and discounting long-term, I think, will deteriorate the brand. People will want two for $20 forever. Consumers question if it’s the same quality and service though. Instead, we try to offer a low price for our limited time offers, like $11.99 for the whiskey sirloin right now.