Monday, March 7, 2016

Buffets in Bankruptcy

The largest buffet restaurant group in the United States is in bankruptcy and will be “closing certain weaker restaurants,” apparently more than half of locations, including the Old Country Buffet location in my town.

Ovation Brands operates the chains Old Country Buffet, Country Buffet, Ryan’s, HomeTown Buffet, and Fire Mountain. The various brands are not so different from each other as the names suggest. Indeed, all have the same web site with only slight variations in content and formatting. (The bankruptcy also covers the smaller Tahoe Joe’s steakhouse chain, though it appears that is just an accident of ownership, with all 10 Tahoe Joe’s locations expected to remain open.) At least a dozen buffet locations had closed without warning in recent days, supposedly “for inventory,” but probably having simply run out of food in a company that had run out of money. News reports describe workers loading restaurant equipment onto moving vans.

The troubles at Ovation Brands have been apparent for years, but never more so than on a visit I made to the Downingtown Old Country Buffet about 18 months ago. The buffet stations were half empty and the restaurant appeared to be rationing food, delivering it to the buffet according to the clock without any concern for the more than 100 hungry patrons. A nearly empty buffet station is one of the saddest sights in the hospitality sector, but that is what a buffet has to do when it is broke and there is not quite enough food in the pantry to get through the evening. On that visit, my fellow patrons were openly speculating about whether the restaurant would open again the next morning. In fact, things got better over time, but the damage had been done and I never again saw the dining room half full. Now it really is closed. The web site has removed the Downingtown location from its map, which shows only six locations remaining in Pennsylvania: Ryan’s locations in Hanover and Johnstown in the southwestern quarter of the state, and Old Country Buffet locations in Harrisburg, York, Whitehall, and northeast Philadelphia in the southeastern quarter of the state. I vaguely recall the map showing more than 20 locations a few years ago.

It’s no mystery what happened. How do you get the family excited about going to a buffet that might run out of food? And it is more than that. The buffets served bland, predictable American fare with no apparent concern for ingredients, hardly a formula for success in the increasingly product-conscious food sector. Attempts to raise prices met resistance. A company statement said sales were 22 percent lower than before. It is unclear what historical period was being used for comparison, but I can easily believe that this year’s sales were down 22 percent from the year before, perhaps the simple result of small price increases combined with the operational difficulties that had plagued the restaurants for years. Looking at the map, it doesn’t seem that the best-performing locations were retained, but instead, the smallest locations and the ones with the lowest rent. The company may be planning for a continuing decline.

It’s never a good sign when a business reports revenue down 22 percent and adds parenthetically that they have no idea what happened. Had the management of six troubled restaurant chains been turned into a part-time job? It is hard to imagine a corner of corporate America having become quite that lax, but how else do you explain a company having no idea what its customer experience or industry trends are? Or perhaps the bankruptcy was planned all along when the company changed ownership last year. Whatever the explanation, there is not much left of these five restaurant names, and now a bankruptcy court will have to decide whether they can continue at all.

Update, Wednesday 2016-03-09

I visited the Downingtown location to verify that it was closed. There is no “closed” sign, but the empty midday parking lot will be indication enough for most customers. For those who proceed to the entrance, the locked door and padlock key safe on the door handle are further hints that the restaurant is gone.