Hooters Goes Fast-Casual With New Hoots Concept

Sarah Steimer
AMA Podcast
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Key Takeaways

​What? Hooters opened a new fast-casual concept called Hoots.

So what? A trial location in Chicagoland features a limited menu with fan favorites, but employees have traded in their trademark uniforms for khakis and T-shirts.

Now what? Marketers can use brand extensions to rebrand their legacy portfolio if they pay particular attention to customer experience and perceptions of value.

​Feb. 27, 2017

A new restaurant opened in Cicero, Illinois, right outside of Chicago, on Feb. 13. 

As with most Chicago-area openings, this restaurant was met with alerts and mentions in Eater Chicago and DNAinfo, along with a food review in the Chicago Tribune. 

This wasn’t a new spot from Rick Bayless (of which there are about seven in the city) or a new cafe serving trendy mixed cuisine (sushi burritos!). Instead, what opened in the Chicago suburb, snuggled in a small strip mall near a Pink Line stop, was a new concept from famed breastaurant Hooters, called Hoots.

The new Hoots is both very similar and very different from its parent restaurant. Hooters' signature orange color is splashed over the interior, matched only by the wing sauce and snow crab legs. Patrons can belly-up to the bar for a beer or sangria, or skip out all together with a takeout order. The limited menu includes Hooters fan favorites: wings (boneless and bone-in), curly fries, snow crab and fried pickles.

Unlike the original Hooters restaurants, Hoots is more Chipotle than chesty. One of the most noticeable differences between Hooters and Hoots is the service: The Hoots staff wears either T-shirts or polo shirts with pants, rather than the trademark uniforms that include small orange shorts, nylons and tight tops.

Marketing News spoke with our resident restaurant expert, AMA CEO Russ Klein, about his take on the new Hoots concept.

Q: The fast-casual scene has been on the up-and-up for the last few years, but this past January saw the first time fast-casual was the weakest-performing restaurant segment based on sales growth. Is this a rough time for Hooters/Hoots to get in on the trend?

A: Not necessarily. The out-of-home food dollar is the single biggest consumer spending dollar there is. While there is always some elasticity in the restaurant space during economic downturns, the evidence shows the restaurant industry, particularly QSR (quick-service restaurant) and so-called fast-casual, to be “recession-resistant” if not “recession-proof.” It will be more about the resonance and relevance of the concept itself than the economic backdrop.

...

Q: What do you think the biggest draw will be for Hoots, particularly without the trademark “Hooters girls?” Is the slightly taboo nature of Hooters what keeps some potential customers from visiting Hooters, but may bring them to Hoots?

A: New restaurant concepts find it pretty easy to gain trial, so I expect the initial business will be strong. Depending on the perceived value for the money, overall experience and—of course—food quality will determine their long-term run rate. There will be talk of value and inherent curiosity in the market buzz about the very fact that Hooters has opened this concept. That can work in their favor. For those who rejected Hooters on principle, there will be some sub-segment that still will stay away. 

This is an adjacency strategy. I imagine they will keep their options open and see how Hoots does. Technically speaking, Hooters is a casual dining concept and this counter-service model is a true fast-casual model. There could be room for both, or they could also be learning about how the Hoots name might ultimately be a name that could re-brand the Hooters portfolio. I don’t know what they are experiencing and seeing in terms of market backlash/resistance to the Hooters concept. It could be existential if the Hooters brand is becoming perceived as increasingly offensive to a broader swath of patrons. Of course this is going to vary by region of the country and throughout the world, too.


Watch a tour of the new Hoots location with COO Sal Melilli on the AMA Facebook page.

 

Q: So many new fast-casual spots hype their healthy options (Panera, Chipotle, etc.). How does an option that specializes in wings and crab legs by the pound compete in this market? Or is it the anecdote?

A: Around the edges, there’s no question newer generations of eaters want more healthy options, and “clean” food. Still, however, there is a large segment of the market who wants what they want and are unapologetic about enjoying a cheeseburger and fries. In the end, it’s about choice. There is also a value component that is unfortunately very real to a large segment of the market. Typically about one-third of the market is motivated by value; and if healthier food or a warranty of provenance costs more, many people will still make “less healthy” choices on the basis of affordability. 

It’s incumbent upon the restaurant chains to innovate in a way that democratizes access to quality food (however the market defines it: taste, nutrition, provenance). Those that make such products affordable to more people will not just increase sales, but help solve the social ills that stem from improper nutrition, obesity and more. There will always be an occasional hunger pang for that cheeseburger, fries and shake, but I definitely see a move toward portion control, health issue awareness, freshness, “better-for-you,” nutrition, warranty of provenance over the long haul.

Q: This Cicero location is a test case. What would you need to see to call this venture a success and expand?

A: Presumably, this is a lower-cost model due to less land, smaller footprint for the restaurant itself, lower labor costs from less staff. Only they know what average sales will constitute a profitable concept, but I’d say they have a strong chance of succeeding. They’ll soon find out, when the market votes with its money, how many people go to Hooters for the wings, versus the “ambiance.” This is the fundamental question.

Listen to the Answers in Action podcast with COO Sal Melilli below.


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Author Bio:

 
Sarah Steimer
Sarah Steimer is a staff writer for the AMA's magazines and e-newsletters. She may be reached at ssteimer@ama.org or on Twitter at @sarah_steimer.
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