EATZI'S VS. RICE

David Merrefield

Eatzi's Market & Bakery -- the restaurant-supermarket hybrid in Dallas -- has finally dropped the other shoe: A second store is planned and will be opened in Houston.

As most industry observers now know, Eatzi's is an innovative format that is perhaps the ultimate home-meal-replacement solution. The format puts to good advantage the best aspects of a full-menu takeout restaurant together with those of a limited-line supermarket.

The Dallas Eatzi's packs a prodigious prepared-food selection into a store of about 8,000 square feet. High drama is sponsored by means of an open preparation area. Additionally, the store offers baked items, a coffee bar and a limited grocery line.

The store has been open for a little more than a year and is considered to be a required destination stop for supermarket executives questing for HMR solutions.

Eatzi's is a unit of Brinker International, Dallas, a company that operates and franchises about 600 restaurants under various banners such as Chili's Grill & Bar, Romano's Macaroni Grill, Border Cafes, Cozymel's Coastal Mexican Grill, Maggiano's Little Italy, Corner Bakery and the single-unit Eatzi's operation.

Brinker is generally regarded as being at the cutting edge of popular-dining concepts, although it has been under some financial challenge lately. In late December, Brinker issued a second-quarter financial report showing that its net income decreased 9.9%, to $112.6 million, on a 7.3% sales increase, to $310.9 million.

Brinker executives attributed the income decline to increases in both dairy prices and the minimum wage. The company has experienced some executive churn as well.

In all, perhaps the rollout of Eatzi's has not been a top-of-mind issue for Brinker, but some observers in the supermarket trade have wondered why such an evidently successful format hasn't been propagated faster. Some have questioned whether the format is more clever than profitable, or if it is a showcase intended to inspire the sale of the concept to another company.

The announcement that a second Eatzi's will be opened may put some of that questioning to rest, particularly if the second incarnation of Eatzi's also seems to be successful.

Indeed, if the second unit is successful, it should provide a big boost to the whole concept since Eatzi's will be put to the acid test in Houston: The Eatzi's there is to be planted across the street from a Rice Epicurean Market, a supermarket format well known for its upscale product offering, which includes a copious prepared-food selection. It should be acknowledged, though, that competitive conditions don't always play out as it would seem they would; both Eatzi's and Rice could benefit by drawing a critical mass of upscale shoppers to the location.

Be that as it may, the Houston Eatzi's may benefit by being a somewhat beefed up version of the Dallas unit since it will be larger and have better parking access. For more on the second Eatzi's, see the news article written by SN reporter Roseanne Harper on Page 31.

The unfolding of the Eatzi's experiment is well worth watching, and, by the way, there will be a lot more upcoming to watch: It's thought Eatzi's may eventually sprout up in Chicago, Denver and Washington. Chicago is most likely the next stop.