Restaurant’s Strategy is to Add More Flair with New Fare
Catalina Restaurant Group Inc. recently decided that if it wants to grow the popularity of its struggling Carrows Restaurants brand, it needs to move beyond its meatand-potatoes comfort food zone.
The Carlsbad-based company recently took steps to differentiate the chain from Coco’s Bakery Restaurants, the more successful eatery the company also owns, by testing out Asian and Italian-style items, such as pastas and new salads, at a few Carrows locations. It will be gathering feedback over the next few months on what to keep permanently on the menu.
The aim is to move Carrows beyond its current loyal following, among older patrons, and attract a wider clientele including young consumers, families and large groups, who are often seeking lighter and healthier fare.
“We’re testing out an Italian menu at our San Clemente restaurant, and we have different Asian menus we are trying out in Imperial Beach and Cerritos,” said company President Masaaki “Mark” Terada. “We will see what we hear from the customers; so far the new items seem to be doing well.”
Catalina now owns and operates more than 180 restaurants, primarily in California with a limited presence in Arizona and Nevada. About two-thirds are Coco’s, which Terada said have contributed most to boosting the private company’s annual sales to more than $200 million, while Carrows has been lagging.
Reviving the brand could prove daunting. Darren Tristano, executive vice president with restaurant industry consulting firm Technomic Inc., noted that Coco’s and Carrows both operate in a declining “family dining” segment where older established chains have been challenged by operators appealing to younger generations, such as Panera Bread, Applebee’s and Chili’s.
The youth movement has spurred several established family-oriented eateries to make changes. “We see this with Denny’s offering a late night “Rock Star” menu, and IHOP now offering a new fast-casual concept that relies on counter ordering, food delivered at the table and increased convenience,” said Tristano.
Glendale-based IHOP recently opened its first-ever IHOP Express location in San Diego’s Gaslamp Quarter.
Tristano says that Coco’s and Carrows are both primarily regional players, leaving them challenged to match the marketing and operational clout of larger national rivals. Family-oriented restaurants of all sizes will likely need to remodel existing restaurants, tweak their brand positioning and adjust menus to attract younger demographics.
Both Carrows and Coco’s are longtime California brands. Carrows was founded in 1970 as Carrows Hickory Chip Restaurant in Santa Clara, and Coco’s started in the late 1940s in Orange County.
The two chains were purchased in 1996 by Advantica Restaurant Group of South Carolina, which sold them to Catalina in 2002. Catalina itself was acquired in 2006 by Tokyo-based Zensho Co. Ltd., Japan’s largest restaurant operator.
Terada said Catalina continues to own the majority of its locations, although it does have 15 franchised Coco’s and four franchised Carrows.
Catalina for the most part has resisted the trend of rivals in recent years to add bar service and alcoholic beverages to its offerings, even though those items could add considerably to customers’ tabs.
“We want to keep a family atmosphere in our restaurants,” Terada said.