Holiday Shopper Hunger Helps Restaurants

BOSTON (TheStreet) -- That midshopping peppermint mocha or post-mall pile of fried onions may be the least of a consumer's holiday shopping worries, but they have a big impact on the restaurants serving them.

According to the National Restaurant Association, restaurants' outlook for this holiday season is better than it's been during the past two years, and an increased appetite for restaurant gift cards is a big reason America's more than 1 million restaurants and food service outlets are in a particularly festive mood. The National Retail Federation says 57% of shoppers will be buying gift cards this year, potentially giving restaurants an entree-sized portion of the take.

"An important factor to driving sales during the holidays is restaurant gift cards and gift certificates," says Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association, in a statement. "Our research shows that 78% of consumers say they would like to receive a restaurant gift card or certificate on gift occasions, making them ideal gifts for almost everyone."

That doesn't mean restaurant chains aren't spicing up their holiday offerings and tweaking hours to woo weary and hungry holiday shoppers. TheStreet took a look at Starbucks and six sit-down food chains to see who's adding to the holiday menu and whose staff will be home for the holidays:

Starbucks ( SBUX)
Holdings: Starbucks, Seattle's Best Coffee
Starbucks customers can mark their calendars by that coffee shop's seasonal offerings, and a buy-one-get-one-free campaign to kick off its Gingerbread Latte, Egg Nog Latte, Peppermint Mocha and new Carmel Brulee Latte last month meant more did, giving the company a strong start to the holiday season. A Starbucks spokeswoman told TheStreet that last year's holiday drink sales increased 30% from 2008, helping Starbucks boost its first-quarter earnings 4%. Meanwhile, sales of those drinks, Starbucks' Christmas Blend coffee roast and their little frosted polar bear sugar cookies increased revenue $300 million from the quarter before.

This year, Starbucks is offering 12 online advent calendar-style giveaways on its Web page for the first 12 days of December, adding the Christmas Blend to its VIA instant coffee lineup and redesigning its ceramic to-go cups and gift cards for the holiday. If that guy on the block who spends a quarter of his annual utility bill on strands of light and inflatable lawn ornaments owned a coffee shop, it would probably look like a Starbucks in December.

Darden Restaurants ( DRI)
Holdings: Olive Garden, LongHorn Steakhouse, Red Lobster, Capital Grille
Darden doesn't like to get cute around the holiday season. There isn't a holiday-specific shrimp platter at Red Lobster, LongHorn isn't going to sear a Santa face into your steak and Olive Garden doesn't have a Domenick the Donkey dinner buffet. Darden's standard, simple formula of limitless food (mostly shrimp and breadsticks) and gift cards to buy that bottomless pit of product increased its third-quarter sales 4.2% last year from the same period in 2008 and drove 4% to 10% increases in same-store traffic at its various chains. The only changes, according to Darden's straight-talking representatives, are in the store's hours.

"Our restaurants are open 363 days a year," Darden spokesman Rich Jeffers says. "They are closed on Thanksgiving and Christmas."

Brinker Restaurants ( EAT)
Holdings: Chili's, Maggiano's Little Italy
Brinker has only two brands, but they take different approaches to the holidays. Maggiano's was open and increased staff for Thanksgiving, served a traditional Thanksgiving menu and threw in menu items such as butternut squash ravioli and pumpkin cheesecake. Heading into the winter holidays, Maggiano's is also offering $65-per-person holiday delivery deals and a $20 bonus card for every $100 spent on holiday gift cards. 

Chili's, meanwhile, closes on Thanksgiving and closes out the year with its own take on diner gifts: It gives consumers 10% off on gift card purchases of $100 or more and daily breaks for hungry shoppers through Christmas Eve, including two dinners for $20, free brownie sundaes and free chips and queso.

Neither is open Christmas Day, but both are open on New Year's, with Maggiano's hosting private parties. For fans of inoffensive fast-casual fare, it's the most wonderful time of the year.

DineEquity Restaurants ( DIN)
Holdings:IHOP, Applebee's
It's never a good sign for your holiday promotions when Thanksgiving passes and you're still plying customers with cinnamon and pumpkins. IHOP, which generally can do no wrong when holidays such as Mother's Day and Father's Day arrive, seems content to give the winter holidays a pass for now in favor of calendar-correct fall "Festival of Flavor" offerings. Applebees is a bit more on the ball by offering customers a $10 bonus gift card for every $50 they spend on holiday gift cards. So who has the right approach? Hard to say. Both saw a 5.3% increase in fourth-quarter revenue last year compared with 2008, but each also saw same-store sales decrease in the same period.

-- Written by Jason Notte in Boston.

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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.

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