ROCKETING INTO HOUSTON

ROSEANNE HARPER

HOUSTON -- Eatzi's has done it again.

Two months after it opened here, Eatzi's second venture is ringing up sales that are making its operators happy.

"The volume is meeting our expectations, and we're doing much better than Eatzi's in Dallas did in its first few weeks," said Phil Romano, the restaurateur who, with Dallas-based Brinker International, launched the hybrid grocery-store/restaurant concept in Dallas a year and a half ago.

Imported intact from Dallas are the brisk pace; the service level; and the fun, theatrical ambiance, complete with opera music and whimsical signs. Eatzi's creators made some changes to update the concept, as well, including adding production space and seating.

"In a lot of regards, Houston cements our view of home-meal replacement, and the amount of extra footage will allow us to comfortably handle the kind of volume we're anticipating," said Lane Cardwell, president of Eatzi's.

The concept, centered around freshly prepared food to take out, has retained its appeal and uniqueness even here, where heavier competition could have dulled its impact on the community, one industry consultant said.

"There's significantly more competition here than in Dallas," said Neil Stern, partner in McMillan/Doolittle, a Chicago-based retail consulting firm. Still, "Eatzi's is still in a league of its own. It makes supermarkets look like supermarkets." He said Eatzi's stands out in a high-traffic area of this city which sports a preponderance of restaurants and upscale supermarkets.

"Cafe Annie, one of the top restaurants in Houston, is in the same strip, and there's a Rice Epicurean Market, a Randall's Flagship and a Kroger Signature store all within about two blocks," added Stern, who visited the newest Eatzi's earlier this month. "They're all good, but Eatzi's is unique."

Phil Romano told SN he doesn't pay too much attention to "so-called competition" because "Eatzi's is different."

One long-time Houston resident in the food business told SN that the way people eat lunch in Houston will probably have an impact, at least on the pattern of sales at this Eatzi's.

"It's going to be a different market for them here. There's a ton of good quality restaurants nearby and the Houston lunch crowd is a sit-down-and-eat bunch," the source said. "Between 11:30 a.m. and 1:30 p.m. people are pouring into restaurants. There's big-time lunch business up and down Westheimer and the Galleria strip. I see Eatzi's doing well in the take-home dinner arena. I don't think anybody has got that market cornered here."

The layout at this Eatzi's is basically the same as at the Dallas store, but the 12,000-square-foot store here is half again as large as the 8,000-square-foot Dallas Eatzi's.

While there is seating for twice as many people here, it's not immediately visible upon entering the store. The seating is tucked into an area adjacent to a cappuccino bar at the back of the store. "It's not suggesting to customers that they sit down to eat. The tables are high, more like for coffee," Stern said.

Most of the additional footage here has been devoted to a production area. "Less than 1,000 square feet have been added to the selling floor. We've added an aisle and made all the aisles a foot wider. And we've made the sandwich counter a little bigger here. It's easier to work," Romano said.

Stern pointed out that the additional aisle space allows Eatzi's to create more of a visual impression. Customers can stand back and view the chef's case and the sandwich station more comfortably, he said.

"The throughput is better, too. This unit is designed to do more business than Dallas," Stern said.

During a visit some weeks after the unit had opened, customer traffic was heavy and continuous between 4 p.m. and 7 p.m. on a Friday, and again at breakfast time the next morning.

A tremendous cross section of people were at Eazti's during the dinnertime period, such as mothers with young children in tow, senior citizens, and younger couples in office dress who apparently had just come from their jobs to choose the night's meal.

Like the Dallas Eatzi's, this store presents the customer with its bakery first. Just to the right inside the entrance, racks of a huge variety of fresh-baked breads await. Straight ahead is the service area, where platters of entrees and side dishes are displayed in cases that form a square; Eatzi's refers to that as the chef's case.

During the dinnertime rush, six associates were busy serving up the fare and talking to customers from a well in the middle of the square.

The chef-garbed servers continually asked customers if they saw anything in the case they would like to try. Many customers took them up on the offer; they took away such items as slices of smoked tenderloin, fruit-stuffed pork roast and raspberry salmon.

Customers were asking about ingredients and proper reheating procedures. One of the store's managers, Ellyn Chantos, explained to SN that it is part of the staff's responsibility to educate customers -- about the products themselves, as well as about Eatzi's as a concept.

"When we first opened, people who had heard about Eatzi's thought we were a restaurant. They'd call up and ask if they could get a table and ask what they should wear," Chantos said.

Her response was to encourage them to come in and experience Eatzi's for themselves. Still, a surprising number of them wanted to sit down once they did arrive, she said. "The first week, those tables in the back were always full. That area was packed."

She added that, since then, repeat customers are learning Eatzi's is basically for fresh, prepared food to take out.

One local food-service manager for a hotel chain said he had quickly become an Eatzi's aficionado. His favorite, he said, is ready-to-heat tenderloin rolled in chopped, fresh fruit. He follows that with a mousse-based, signature dessert called "chocolate oblivion."

"It's like a shot of mousse with a sliver of cake underneath it. Then there's some toffee on top and it's drizzled with chocolate syrup," he said, wistfully. "The lasagna is great, too. And huge portions."

Another Houston resident said she stops frequently at Eatzi's after work to get already prepared food to take home even though she has to go a little bit out of her way.

"On a busy week, it's a great alternative to cooking," she said, reporting that recently, when she had a particularly heavy workload, she stocked up with nearly a week's worth of meals. "I bought five or six whole meals, everything, for $70. I think that's good. What was left over, I froze."

Through signs, Eatzi's makes a point of telling customers what a value they're getting, especially compared to restaurant-quality alternatives. One sign on the service counter where the entrees and sides are displayed says, "This tenderloin plus two vegetables would cost $18 to $20 anywhere else. At Eatzi's, it's $9 and there's no tipping."

Glazed carrots and scalloped potatoes were the suggested vegetable sides. But others, such as sauteed green beans and snap sugar peas, were available.

In addition to the platters of fully cooked food piled high on platters and replenished frequently, there were value-added, raw meats and seafood, such as stuffed pork chops and seafood kabobs. Customers could either take them home to cook, or have them grilled at no charge at a long, open-flame grill against the left wall of the store.

A skewered seafood kabob had large pieces of each of sea bass, tuna, salmon and swordfish, for $3.99. The day SN visited the store, exuberant griller-servers in chef hats were suggesting rice pilaf and sauteed green beans to go with grilled entrees. The sides were $1.99 each.

The action at the grill is constant because chicken and flank steak and other items are grilled there to replenish platters in the chef's case in the center of the store.

An especially busy section of the store at dinnertime the day SN visited was the custom-made sandwich bar, where three staffers assembled sandwiches on store-baked bread nonstop from 4 p.m. until well after 6 p.m.

Much of the animation in the store was right there, as customers stared at the sandwich menu board above their heads and tried to decide what to order. One couple negotiated a full 10 minutes before deciding what to get on their sandwich. They left with a sandwich that looked like it was made on an entire loaf of sourdough bread, with ingredients piled at least 2.5 inches high.

The sandwich menu gives the customer 10 choices of bread for their sandwiches, such as sourdough, three chili, potato dill, olive oil boule, and Shiner Bock (made with the beer that's apparently a regional favorite here). The sandwiches fall into three price categories, depending on the ingredients -- $3.99, $4.99 and $5.99.

Breakfast items are also part of the repertoire. Breakfast frittatas are $1.99 at the grill, and so are breakfast burritos. A large bowl of oatmeal is also $1.99. Huge biscuits are 79 cents each and a medium-size bowl of fresh, cut-to-order fruit is $2.59. Fruit is sliced and dished up at a bar that serves as a service salad bar later in the day.

Customers were eating a variety of combinations in the indoor seating area, which accommodates about 40 at four tables and two long ceramic-tiled counters with stools. One large family at dinnertime had a couple of whole loaves of bread, a meat loaf entree, two containers of salsa and burritos for the kids. At another table, a couple was sharing sushi and a salad.

For those who want to get in and out of the store fast, there's a selection of packed-to-go items in a self-service case in the right, back corner of the store.

It appears that there are more choices in self-service here than at the Dallas site. On the day of SN's visit, there were about 25 assorted dinners in sectioned dome containers offered. Some examples were roasted chicken with rice and carrots, $6.49; grilled chicken cutlet with mashed potatoes and roasted vegetables, $5.99; and Italian meatballs with spaghetti, $5.99. There was also spinach and prosciutto manicotti for $6.99 and large squares of lasagna for $5.99. Six varieties of sides also were offered in individual servings. A sign over the case read, "Fresh take-home meals. They take 4 to 6 minutes in the microwave or will freeze for two weeks."

Just in front of the meal offerings, half-bushel baskets at knee height displayed mini boules for 69 cents each. In another cross-merchandising effort, bottles and half-bottles of saki were displayed alongside a 2-foot section of packages of assorted sushi. A brand of Japanese beer, too, was offered there.

Cross-merchandising abounds. Small racks of moderately priced wines are situated throughout the store -- in front of a bread display, in front of the cheese case and just behind the customer as he or she stands at the "chef's case" counter where the fully cooked entrees are dished up.

A 3-foot, tiered section in the self-service area is devoted to prepacked kids' meals. Prominent there are such items as cheese ravioli and macaroni and cheese in small portions. A roast beef dinner in that section is called "roast beast."

At the pastry service counter in the bakery, which is several feet longer than the one in Dallas, there are a number of items in single-serving sizes, such as slices of carrot cake and cheese cake for $2.79. Individual creme de brulees and pot de cremes are $1.99. Strawberry cream puffs are 99 cents.

SN observed two moms buying the cream puffs and giving them to their children to eat immediately, while they continued their meals shopping.

The level of service is high here, just as it is in Dallas. During the visit, each station, including the grill, had two or three staffers serving customers. There was constant activity as chefs and cooks carried out trays of food to replenish platters and others rolled racks of bread from the bakery to the sandwich station.

Retailers viewing the Eatzi's operation have often wondered aloud, "How can they be making money with all that labor?"

Phil Romano assured SN that Eatzi's is indeed making money. "Here's the key: We're serving restaurant-quality food so we can charge more for it. We end up with a 12% to 15% [net] profit" that figures in labor, as well as other costs, he said. "Most grocery stores are lucky to make 2% to 3% profit on $20 million sales -- and that's if it's a good store."

A restaurateur not associated with Eatzi's told SN he has no doubt that Eatzi's has been posting attractive numbers in the profit column.

"Based on my experience as a full-service restaurateur and my knowledge of the supermarket industry, there's no question in my mind that at the operating level they're making money, more than the average supermarket," said Ed DeLuca, co-founder of DeLuca Inc., Middlebury, Conn.

DeLuca said he based that on the sales volume of $12 million-plus a year that Eatzi's has reported it is racking up in Dallas, and on his observations of the service level at Eatzi's. When people question the number of chefs at Eatzi's, DeLuca said, he counters by saying it depends on how one defines what a chef is.

"It's my opinion that they have a few qualified chefs at each location, and the rest are recent culinary school grads or sous chefs. At any rate, Brinker International is too sophisticated an organization to be rolling out the concept if they're not making money."

The sales are flowing at Eatzi's against a background of elements that make for a playful environment.

Signs throughout carry the theme of fun. One beside the passageway to the backroom production area said, "Kitchen. Keep Out. Industry spies shot on sight." Another warned shoppers that "Chefs have the right of way," urging them to make room when they see a chef hauling trays of food to display cases. Others with whimsical messages include "Sorry, no ketchup," "Please do not feed the chefs" and "Practice safe sushi."

And a large sign at the exit door says, "Pinch yourself. This was not a dream. Thanks. See you tomorrow."