Another day, another report about a struggling chain.
This time it’s Ruth Chris Steak House, the upscale eatery with about 120 locations around the world. Same-store sales fell 18.5% year over year during its most recent quarter, and the company is hampered by debt after its $92-million purchase last year of the 19-unit Mitchell’s Fish Market chain.
Ruth’s Chris isn’t the only upscale chain struggling right now. Competitor Morton’s Restaurant Group posted a $67.7 million loss last year.
Will Ruth’s Chris strategy of discounted menu items like a $19.99 deal for steak and fries help the company, or will consumers continue to flee the more upscale chains for deals at fast-casual venues?
Counter Culture 
If they can make it until spring of 2010, they both can come back.
I don’t hold much hope for Ruth’s Chris or a number of the other high end steakhouses, including Fleming’s and Del Frisco’s, that have opened in the Charlotte, NC market in recent years. Of note,
Morton’s closed its Charlotte location recently.
The bankers and other corporate exec’s simply don’t have the expense accounts they used to and the ‘average’ people who splurged over the recent years don’t have the discretionary income they used to.
I wish them all well, but wouldn’t invest in them at this point. McDonald’s and Wal-Mart would be a better choice.
Except for some AIG execs and our government officials, the days of the $200.00+ steak lunches and dinners are going to be few and far between.
RC here in surburban NY has recently offered some special deals to try to boost their business, but between the (steak in butter) calories, fat and scarcity of dollars, it does not look good for them.
Why would I pay $19.99 for steak and fries at Ruth’s Chris when I can go to the local Sizzler and get the same quality steak and potato for half the price?
I’m a semi-vegetarian (no red meat, no pork) so it has always shocked me at the willingness of people to pay for steak. I really hope Ruth Chris goes out of business or at least closes some stores. Our age of indulgence is coming to an end, and this should be one of those places that goes off the list. Companies that spend exorbitant amounts of money on lunches and extra unneeded services/consumables need to re-examine their practices in this age.
I just have to say that in Fresno, CA the Ruth’s Chris Steakhouse is doing very well, running a profitable store and is always packed, and its hard to get a reservation at times. I don’t think you can count on that high end restaurant to go out. Perhaps its local..but it also hasn’t completely “built-out” like some of the chains.
I think you get what you pay for. There is a big difference between a 30 dollar steak and one for 10. In my area there is one Ruth’s Chris and it is closing. I think it’s because it is in a commercial shopping area rather than the downtown of a city which would be it’s target area.
To Jason: If you think that Sizzler’s the same as Ruth Chris then somethihing’s wrong with your tatse buds. I hope they survive as they have run a fine operation.
I was just at the Ruth Chris in Sarasota and they are doing business. They have two (2) three (3) course specdial dinners that are terrific. We should try to keep places like Ruth Chris and Morton’s open so they are there when things get better. Every restaurant I know has been trying new things to stay open and they seem to be working special dinners, dinners for two , wine specials etc.
I agree with Henry B-Jason Maybe Fleming’s is the same as a Sizzler’s steak since it’s owned by Outback but Ruth Chris is far superior.
I think that Ruth Chris will survive if the company has adjusted its operating cost and prepared a plan for the worst case scenario. Consumers will definitely think twice before splurging on an expensive lunch or dinner. Majority of the people I know are scaling back on lunch meeting and having a brown bag lunch instead.
McDonalds seems to be one of the few restaurants that is not struggling. I think that if you take away 15-20% of the business from a category you will see closing and volume loss until you reach equilibrium.
Across the board, all high end restaurant sales are off. From Ruth Chris to Mortons and Capital Grill. Ocean Club out in the West is still doing good business, but not like two years ago. I will tell you though, I went to several Scottsdale, AZ restaurants last week and the “hot” spots are still hot. Could not spot a recession in some of the restaurants here in Scottsdale. Meanwhile, Darden (Olive Garden, Red Lobster) doing solid numbers, Long Horn their recent acquisition, same store sales declined about 5%, while Capital Grill, their high end offering declining 19% from Q3 2007 to Q3 08.
I hope that they can survive as Ruth’s Chris is an icon when it comes to quality in high end steak houses. There is a reason that those familiar with the consistency from one property to the next will continue to be loyal patrons. I travel a good bit with friends and the first thing on our agenda is to make reservations for dinner when there is a property in close proximity (close being within an hour in a half drive). I live in Charleston, SC, and cotinue to enjoy the property in Myrtle Beach and a more recent opening in Savannah, GA. It is my understanding that Charleston is soon to be the recipient of a Ruth’s Chris and my friends and I have already requested to be placed on the list for the soft opening.