Coco Pazzo

New York City’s Coco Pazzo enjoyed great success during casual dining’s heyday but has since adapted its service model to fit new consumer demands.

Casual Dining is Gaining Ground

After years of losing market share to bright, young fast casuals, the segment is regaining ground thanks to hybrid formats, quality focus.

After years of hemorrhaging customers to counter-service competitors, casual-dining eateries are finding ways to adapt to changing diner expectations—investing in menu upgrades, digital ordering, and delivery, and homing in on meaningful traffic rather than deal-chasers. Elsewhere, nimble young brands are giving into customers’ growing affinity for one-stop dining, offering multiple service styles under one roof.

The past decade has been tough on the mid-level casual-dining chain, which has watched customers flee en masse to the fresher menu options, quicker service, and sleeker interiors of fast casuals. Faltering same-store sales begot unit closures and bankruptcy filings, but the reckoning also forced many to take a hard look in the mirror and evolve.

Olive Garden perfected its breadstick recipe and focused on boosting alcohol sales, fueling double-digit quarters of positive comps for parent group Darden Restaurants. Chili’s spruced up its interiors, nixed LTOs, shrunk and upgraded its menu, and is seeing improvements to sales and traffic. TGI Friday’s is completing a menu overhaul in addition to joining OpenTable and rolling out online ordering system-wide—though sales slumped 5.1 percent in 2017.

As a group, casual-dining same-store sales are indeed trending positively—up 0.5 percent from January to April 2018, a reversal from the prior-year period’s 1.1 percent drop, according to marketing research firm Malcolm Knapp. It remains to be seen whether legacy brands’ efforts will pay off longer term.

Meanwhile, a fresh generation of hybrid restaurants featuring elements of fast casual and full service aim to satisfy every kind of guest and stretch staff in the face of a shrinking labor pool. In Chicago, chic full-service Vietnamese restaurant HaiSous slings pho and banh mi at an adjacent fast casual, Cà Phê Dá. Diners at San Francisco’s Corridor can order fried chicken sandwiches at the street-level counter or book a full-service meal upstairs on the mezzanine.

Early last year, New York restaurateur Pino Luongo teamed with partner Alessandro Bandini to resurrect Coco Pazzo, his iconic trattoria of the ’90s and early 2000s, with a new Soho address and this time featuring a fast-casual component.

At lunch Coco Pazzo Kitchen features a counter-service menu of hot sandwiches like pork sausage and broccoli rabe, hearty salads, soups, and a handful of pastas like lasagne bolognese—all under $15 and available for carryout. Come 5 p.m., the dining room morphs into the full-service Coco Pazzo Trattoria, with several items reimagined for the casual Tuscan dinner menu.

Original dishes include pistachio-stuffed grilled sardines and lobster spaghetti diavola, while lunch items such as chicken and ricotta meatball pan rustico and brisket pot roast stracotto are reimagined as rigatoni with chicken-ricotta meatballs and pappardelle with braised brisket, respectively. Pastry and salad stations assume control of the grab-and-go post as three line cooks replace lunch’s two and waitstaff swells from one to three.

“The big challenge was in my head—if I was doing the right thing having one place with two functions,” Luongo says. “I was afraid people wouldn’t associate dual use of the premises with two propositions.” Instead, he’s already scouting a second location in Manhattan or Long Island.

Ultimately, Luongo says, restaurants succeed because they strike the right balance of food quality and consistency and price point. With a generation of diners who are less impressed by fine dining, success increasingly depends on how operators fine-tune the evolving notion of fast casual, which no longer encompasses only limited service.

“Nowadays, the conversation just means ‘fast’ and ‘casual’—it doesn’t have to be McDonald’s” Luongo says. “That’s the evolution.”