From the Archives, 1992: Sizzling successes

First published in The Sydney Morning Herald on October 18, 1992

SIZZLING SUCCESSES

A MODERN phenomenon will grip Bondi Junction in Sydney’s eastern suburbs tomorrow and the Myer Centre in Brisbane the following Monday.

Cahills inspired many more family-friendly chain restaurants in Australia.Credit: Fairfax Archive

The phenomenon is the long queues that have become common outside Sizzler restaurants throughout Australia.

The popularity of Sizzler and the remarkable customer loyalty the “casual” restaurant group commands is indicative of the boom in the fast-food industry.

The fast-food/casual/family dining industry is expanding at an unprecedented rate, underlining the dramatic, recession-induced changes that are reshaping social mores.

Sizzler, which serves 430,000 meals a week, is to build 40 more restaurants in Australia over the next three years, says Kevin Perkins, a 41-year-old Brisbane native and local managing director of Sizzler’s US parent, Collins Foods.

The first Sizzler restaurant was launched in August 1985 in the Brisbane suburb of Annerley by Mr Perkins, who was then Collins’s chief executive.

The Bondi Junction and Brisbane Sizzlers bring the total to 74.

The picture is the same for KFC (Kentucky Fried Chicken), a subsidiary of PepsiCo, which plans to open another 52 outlets in Australia and 10 in New Zealand next year.

In the past 10 years, KFC has more than doubled its number of outlets in Australia and New Zealand from 204 to 473.

Robert Bothwell, KFC’s South Pacific president, has raised the curtain on a record 44 new KFC outlets this year.

“We opened 30 last year and 15 in 1990,” Mr Bothwell said.

At Pizza Hut, Australian vice-president and managing director David Chapman said the popular outfit - also a division of PepsiCo - would open 40 outlets this year to bring the total in Australia and New Zealand to 433.

Pizza Hut is planning to open another 49 outlets next year.

“We expect to double our business over the next five years. We will expand all of our concepts, restaurants, delivery units, express units and kiosks,” Mr Chapman said.

The McDonald’s Family Restaurants chain is also booming. Thirty-six restaurants have opened this year, bringing the total to 323. Another 36 to 38 are planned for next year.

Now throw in the new and aggressive Hog’s Breath Café, Hungry Jack’s, Smorgy’s Restaurants, WesterN SteakouT and Keg Restaurants, all of which promote the casual restaurants theme.

Sizzler Restaurant Spit Rd Mosman. October 22, 1991. Credit: Andrew Meares

While many retail sites are available at bargain prices, each new outlet costs the restaurant groups about $2-3 million to establish.

But the sheer number of new outlets is indicative of the industry’s confidence.

Mr Perkins explained the success of Sizzler. “It’s casual dining - it is above fast food and below white-linen restaurants,” he said.

“The consumer of the 90s is looking for quality, value and personalised service.

“They want more for less - they don’t think they should have to pay more.

“So for the first time in many years, Australia has to adjust to doing business in a zero-inflation environment, where the consumer has deflationary expectations.

“You’ve got to be much more efficient and you’ve got to be much more in tune in providing great value to the consumer.

“That’s why Sizzler has been so successful - it’s the service-value-quality equation that is right for the 90s.

“If you take care of the customer and provide good quality and good service you can generate great loyalty.”

Rather than grab market share from competitors, Mr Perkins believes Sizzler has simply taken more meals out of the home.

“You find that in times like this people are not buying new houses, new cars or new refrigerators or taking out new loans,” he said.

“But they have still to do things that add some excitement, or are a treat, and going to a Sizzler - or a Kentucky Fried - is one of those experiences.”

The Collins group is also the KFC Queensland franchisee.

Bob Lapointe, horse racing identity and Sizzler franchisee with Jardine Matheson, said the group was perceived to provide good value for money “and the customer is the ultimate judge”.

“People are eating out more frequently. There’s more pressure and responsibility on all of us, so we all want to relax and enjoy ourselves a bit more and food away from home is part of that,” he said.

Kevin Perkins, a local managing director of Sizzler’s US parent, Collins Foods.Credit: P. Bull

Mr Lapointe pioneered the development of the industry in Australia 25 years ago, first with the establishment of Kentucky Fried Chicken, then Pizza Hut and then Sizzler.

“The problem with Sizzler is we are almost victims of our own success,” said Rob Remnant, the chief executive of Jardine Restaurants, part of the huge Jardine Matheson group.

(Jardine is a Sizzler franchisee in Victoria and Tasmania and partner with Mr Lapointe in northern NSW and South Australia and is also Pizza Hut franchisee for Victoria, South Australia and Tasmania.)

“It’s a challenge being able to manage the queues effectively without offending people,” Mr Remnant said.

“We opened a Sizzler in West Gosford (on the NSW Central Coast) about two months ago and the first Sunday there were about 150 people outside the restaurant.

“People were waiting up to two hours just to have a meal at Sizzler People get turned off by that sort of wait, so it’s a major challenge.”

Pizza Hut sales, according to David Chapman, have risen by $45 million to $360 million over the past year. From 1988 to 1993, Pizza Hut has enjoyed 18pc compound growth per year.

“Our business has continued to show rapid growth during the recession,” he said.

“We’re giving greater value and we’ve priced significantly below inflation for the past four years, both in menu prices and promotional offers.

“The whole convenience food market here is significantly lower than the US on per capita consumption,” Mr Chapman said.

Zoey Volkanovska with a stack of sizzler cheese toasts. May 20, 1994. Credit: Jennifer Soo

Gerrie Boeyen, McDonald’s national marketing manager, said: “We haven’t raised our prices for something like 18 months. Low inflation has enabled us to do this.”

KFC has been finding the going tougher since July as the recession has cut deeper into working-class areas and has had to promote heavily to maintain sales.

“It’s become pretty patchy,” Mr Bothwell said.

But where KFC and its competitors make up lost ground is via the “shift down” by people who previously would have patronised more expensive restaurants.

“People who used to go to a more expensive restaurant are now coming to KFC,” he said.

A SMALL, SIMPLE START

IN 1957 a young restaurateur in California decided to try an idea which he had read about in the Wall Street Journal - “self-service budget steakhouse”.

The entrepreneur was Del Johnson and, with his wife Helen, he started Sizzler. They opened their first Sizzler in Culver City, California, on January 27, 1958, using $50 borrowed from friends as a float for the till.

The building was austere. Helen had made the curtains herself, and Del had scraped together anything he could find or borrow for furniture and fittings.

One of the friends who helped in those days was Jim Collins, who was running the nearby Hamburger Handout, a small, new hamburger stand competing with the fledgling McDonald’s.

The Sizzler menu was simple - two types of steak plus a small salad and bread rolls.

By the early 60s, Del and Helen added a hamburger sandwich to the menu and expanded to three locations in Los Angeles. Then friends of Del started to ask for and open Sizzler franchises.

By the end of 1966, Del was ready to retire and offered the business to his friend Jim Collins.

Collins, then a major franchisee of Kentucky Fried Chicken outlets on the West Coast, involved other business partners and bought the Sizzler chain in June 1967.

Sizzler Restaurants’ rapid growth continued through the 1970s and the totally self-serve concept was changed to the “Sizzler Service” concept, which combines the best features of self-service and waiter service. Seafood and chicken were added to the menu.

In 1984, Collins Foods acquired Link Foods in Brisbane and in July 1985 converted Link’s Bonanza restaurant at Annerley to Australia’s first Sizzler.

* Footnote: Del Johnson died this year.