Golden Corral raised prices on the weekend and lured in more customers

Source: Golden Corral

With consumers more choosy about their dining options, many restaurants have slashed prices to lure diners through their doors — Golden Corral has opted to take a different route.

The nation's largest grill-buffet chain's out-of-the-box strategy went like this: Hire more staff and boost prices on the weekends to offer customers more choices.

In February, Golden Corral launched its "Premium Weekend" promotion. When customers came in on a Friday, Saturday and Sunday, they paid $2 more but found items like prime rib, jumbo butterfly shrimp and glazed salmon on the menu. The promotion ran through March.

"We've known for a long time that customers will pay more if they are getting more, particularly on weekends," Bob McDevitt, Golden Corral's senior vice president of franchise development, told CNBC.

Golden Corral said it saw a 5 percent increase in weekend sales during the course of the promotion, as compared to sales over the 12 weeks prior.

After weekend sales fell back to pre-promotion levels, the company relaunched the promotion in June and sales grew once more.

"We've seen same-store sales are up on the weekends," McDevitt said. "Most of the industry is down, so any time you can be up and your direct competitors are down, that's a good thing."

He noted that the buffet chain still has some problems to solve when it comes to sales during the week.

"That's the next challenge," McDevitt said.

In addition to increasing menu prices, Golden Corral has also begun to add to its staff. The buffet chain spent six months and $500,000 testing the addition of a guest experience attendant, whose role is to keep an eye on things that the customers care most about — clean dining room, full pans of food and friendly service.

"Because we are in the buffet business, we are in more of a frenetic environment than a restaurant," McDevitt said. "Partly because we do quite a bit of volume, but we just know that in order to compete with the casual dining people we need to deliver comparable if not better overall restaurant experience."

Golden Corral saw customer experience scores reach an all-time high following the new employee test and have since encouraged its franchisees to invest in the new position.

Of course, the company isn't immune to industry pitfalls. Buffets, in particular, have been hit hard this year. Several Ovation chains, including HomeTown Buffet, Old Country Buffet, Ryan's, Fire Mountain and Tahoe Joe's, filed for Chapter 11 bankruptcy back in March.

In addition, Golden Corral has faced increased competition with grocery stores and fast casual restaurants.

"It's an industry-wide phenomenon that groceries are less expensive and people are eating at home more," he said. "That's going to impact the available dollars in the industry, but the way to deal with that is that it's a zero-sum game, you have to be better than the next guy."

McDevitt said that chains can set themselves apart with great customer service and having innovative and unique menu items.

"We learned over the years that, at least in our environment, if we make the buffet more appealing because of a perceived high value product we will get the eyebrow raised and customers will come in," he said. "Our mission is making pleasurable dining affordable."