It might seem inevitable that casual-dining chains would jump on the smaller-serving bandwagon, given the recent success of 100-calorie servings of snacks and sodas from Kraft (NYSE:KFT), General Mills (NYSE:GIS), and Coca-Cola (NYSE:KO). But according to a recent article in The New York Times, this segment of the restaurant industry has a less-than-stellar track record when it comes to portion downsizing.
In 2004, Ruby Tuesday's (NYSE:RI) experiment with decreasing some portion sizes and printing nutritional information on its menus only lasted five months before the company gave in to consumer complaints. And while McDonald's (NYSE:MCD) may have dropped overt "supersizing," offerings with names like the Monster Thickburger (from CKE Restaurants (NYSE:CKR)) and the Enormous Omelet and Meat 'Normous (from Burger King (NYSE:BKC)) still appear on menus.
There is also the matter of economics, from both the diner's viewpoint and the restaurant's. If diners are served a huge amount of food for a relatively low price, they feel they are getting a good deal. If the portions shrink but the price doesn't go down noticeably, that's a problem from the diner's perspective. For restaurants, where food only accounts for about a third of total expenses (the costs of labor, rent, advertising, and other expenses make up the rest), it makes more economic sense to serve larger portions and keep the customers satisfied.
TGI Friday's Right Size portions are about a third smaller than its regular dishes, and the prices range from $6.99 to $8.99. According to Richard Snead, chief executive of Carlson Restaurants, early numbers show that the lower portion price has been offset by higher foot traffic.
If this experiment does succeed, I don't think it will take too long for other casual-dining chains to follow Friday's lead. With smaller portions at lower prices, consumers are offered more choices and more control over what they eat. And from the restaurants' perspective, they have one more way to set their chains apart from the competition. Of course, only time will tell if Right Sizing is just an Atkins-style fad, or if it has supersized staying power.
For more on the state of casual and quick-serve restaurants, check out:
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Online editor Sarah Erdreich does not own shares of any company mentioned. The Fool has a disclosure policy.
