Those profligate Masters of the Universe have crashed and burned, maxed-out credit cards have been shredded or stowed away, so many expense account allowances vaporized: What's a restaurateur to do in this climate? Create your own economic stimulus program — or risk failure.
Some fortunate souls may still be lining up for $300 tasting dinners at Per Se or $500 sushi extravaganzas at Masa in New York, but for most Americans, trading down (or out) is the new norm, and until they start seeing their home values and retirement accounts looking healthy again, that's likely to continue. Fortunately, restaurant operators are a resilient bunch; they realize people still look to them for a bit of pampering or as an escape from kitchen drudgery. Many operators have figured out how to make themselves just a bit more appealing to a skittish audience. Maybe some of their strategies, detailed below, will work for you.
A Kinder, Cheaper World
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| Rouge in Philadelphia (left) does a “two-fer” lunch; and Daniel (right) and other upscale New York restaurants are cutting deals. | |
A recent New York Times Dining section opened with a staged photo showing the ubiquitous Mario Batali along with Le Cirque's Sirio Maccioni and Jean-Georges Vongerichten, all sporting sandwich boards with “You won't believe our deals!” and similar value-driven messages. The gist of the article was that even New York's toniest restaurants, long able to cop an attitude toward guests, were suffering along with the rest of us, and a new era of niceness had dawned (“You need to hug the customer,” multiunit operator Stephen Hanson told the paper). Power dining spots have been forced to rethink their approach to the market, often resorting to what was once considered unthinkable: discounts. A sampling:
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Daniel in New York has offered an early-bird special: three courses with wine for $98 (the normal price is $105 without wine).
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Batali's Del Posto slashed the price of a $250 20-course tasting dinner to $175; a nine-course version dropped from $175 to $125.
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Craft, also in New York, is playing both ends of the market with $150 “Tom: Tuesday” dinners, created by celebrity chef Tom Colicchio, alongside “Damon: Frugal Fridays,” with a menu of $10-or-less dishes (small pizzas, food in a jar, meat on a stick, offal, snacks, salads, cheese and small plates) and drinks prepared by Damon Wise, Craft's executive chef.
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Philadelphia's French institution, Le Bec Fin, is fielding an early bird/night owl three-course prix fixe menu for $35 — a discount from the more typical $55 average — along with a happy hour with complimentary hors d'oeuvres and $5 drinks in the bar.
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Daily Grills have introduced a “recession buster” menu at their eight California units: a three-course meal priced below a typical entrée. In the offing: family-style meal menus, with dinner for four running $49.95. And happy hour menus, with substantial small plates for $3-$4, have spurred traffic in the early evenings.
Theme Schemes
Themes have always been a good way to bring in both regulars and fans of specific foods or wine, but they have taken on more meaning as customers seek affordable alternatives.
Hooters recently decreed Wednesday “Wingsday,” rolling out a $5.99 boneless wing platter with 10 wings, dressing and curly fries. Many Hooters locations are also offering guests other values, such as half-off appetizers and buy one/get one specials.
At San Francisco's 1300 on Fillmore, Mondays celebrate a popular menu item, fried chicken, with a $28 three-course dinner (salad or soup, fried chicken with whipped potatoes, apple cobbler with ice cream).
In West Hollywood, CA, the Foundry on Melrose kicked off the New Year with new menu items, prices and entertainment to create an inexpensive neighborhood destination; it follows themes on several nights: Bluesy Tuesday, featuring blues and roots music and special Southern food and drinks; Women & Whiskey Wednesdays, with jazz and whiskey tastings; and Absinthe and Jazz Thursdays, with a flight of three absinthe-inspired cocktails, jazz and food until 1 a.m.
Winning 'Em Over with Wine Deals
Long a staple at some restaurants, nights touting half-price wines have become de rigueur. San Francisco food critic Michael Bauer deems that a step in the right direction.
“In my opinion, the way to pump up business is to offer good wine values,” he wrote in his blog. “People may not mind spending $30 or so for a bottle for a casual weeknight meal, but if they're like me, they begin to balk at $50….Casual restaurants might be wise to bring back the ‘house wine’ and less expensive bottles.”
Good Gimmicks
Iron Hill Brewery & Restaurant, with seven units in the Wilmington, DE area, launched an Economic Stimulus Package in February. Five times a week, at least one table of guests is randomly chosen to receive a bailout: Their meal is on the house. In place of the check servers present a card with the good news. “This is a lighthearted gesture that we hope will make people smile in these trying times,” explains Kevin Davies, director of culinary operations.
During February, on the opposite coast in Beaverton, OR, Monteaux ran its own bailout: It agreed to honor any competitor's coupon or promotional gift card.
The Foundry on Melrose's executive chef, Eric Greenspan, is offering a money-back guarantee. If the experience does not meet a customer's expectations, he will invite them back with a gift certificate to cover the meal, excluding alcohol and gratuity.
In the past year, Starbucks has stepped up its efforts to promote the value proposition, mainly by encouraging its loyalty card users via incentives, from discounts on newly introduced items to free wi-fi access to complimentary refills.
The Total Package
Folding a meal and drinks into one price sends a strong value message, and it's one that operators at all levels have embraced. The Dining Room at the San Francisco Ritz-Carlton, for example, recently unveiled a Small Bottles/Small Bites menu at the hotel's Bar. The new offerings give patrons a taste of the Dining Room in a quicker, less-formal and less-expensive setting. The half-bottle menu includes 111 choices; among the small bites are tuna tartare, lobster risotto, foie gras, crispy chicken wings, pot de crème, panna cotta and artisanal cheese.
Rouge in Philadelphia recently rolled out a “choose two” $16 lunch, with pairs of items designed to share and taste. Options include acorn squash soup with allspice foam; a 4-ounce version of the restaurant's famous cheeseburger with Gruyere, caramelized onions and pomme frites; a smoked salmon BLT with potato gaufrettes, short ribs with white bean ragout and braised cabbage; and more.
To help promote its image as a good value provider, Starbucks this month introduced $3.95 breakfast pairings — a tall latte with a breakfast pastry or brewed coffee with a breakfast sandwich — at its company stores.
At Picholine, a two-star Michelin restaurant in New York, a new Menu d'Economie features tasting flights, tasting plates and 60 wines under $60. The tasting plates are half-portion entrees for $20, and tasting flights run $20 for three smaller portions.
Trading Down for Dollars
It's not always easy to do, but a facelift can help revive a restaurant that has priced itself out of the market.
After seeing business decline by nearly 50 percent on weeknights last year, Bicycle Bistro in Federal Hill, MD, retooled its menu to include entrees priced between $16-$23, versus the previous range of $18-$29.
All' Angelo in L.A. stripped away the white tablecloths, removed the fine crystal and totally reformatted the menu, from a ristorante to a less-formal trattoria. The new menu features a range of rustic, hearty pizzas, pastas, antipasti and entrees, all under the $20 mark. Guests can also opt for plates of cured meats and cheeses starting at $10, and a rotating selection of wines by the glass ($5) and half-carafes ($15) and spriz and prosecchi by the glass ($9).
La Mar Cebicheria and Nettie's Crab Shack, which both opened in San Francisco last year, represent a wave of more casual options in a city that has more than its share of high-ticket options. “We're meant to be more affordable, and we think the time is right in San Francisco for this type of cuisine,” La Mar partner David Fukuda told the San Francisco Business Times. Nettie's owners chose to use lower-cost seafood such as clams or local rock cod to make the menu more appealing to value-conscious patrons.
Even minor tweaks can help. Equinox, a fine dining restaurant in Washington, DC, has raised prices on entrees, but servers are encouraging guests to order “for the table” sides, with choices such as $9 macaroni and cheese with black truffles, to bump up the check without blowing the meal cost off the charts.
Comfort Me
Everyone knows McDonald's and other quick-service chains are profiting from the economic doldrums as the public trades down when dining out. But purveyors of comfort food are also seeing an upside. Silverstone Bar & Grill in Boston, which charges $10-$20 for shepherd's pie, steak tips and mac and cheese, continues to be busy despite the downturn. “We've never priced ourselves out of the market; people feel like they can come here and get value and not feel guilty the next day,” g.m. Mary Palmer told the Boston Business Journal.
That desire for comfort is showing up at more upscale establishments, too, from 1300 on Fillmore's Sunday chicken dinners to roast chicken on the menu at Radius in Boston and burgers everywhere. Donatella Arpaia's casual Mia Dona in New York has been selling fried chicken at a record pace.
Purveyors of meat and poultry back up the trend: Niman Ranch, for instance, has seen an uptick in orders for cheaper ingredients such as bacon and ground beef for simpler fare.
Tackling Operating Costs
Where labor is high, some operators have figured out ways to trim labor without compromising the experience. Fifth Floor in San Francisco introduced an “honor bar” in its lounge where guests pour their own wine, chosen from a revolving selection, or a specialty cocktail and pay for their choice in a wooden box or by handing their credit card to a server.
Some restaurants have cut back on lunch periods because of slow traffic; while others have added meals, such as breakfast or brunch, to bolster sales.
Payard in New York began serving a two-course $25 Sunday brunch earlier this year to offset a 25-30 percent drop drop in business during the week. Owner Francois Payard explains that the extended hours make sense because of the low food cost — primarily eggs.
The idea of purchasing a whole animal instead of buying various parts separately is nothing new, but it seems to be winning new converts as chefs look for ways to stretch the food cost. Morou Ouattara of Farrah Olivia in Alexandria, VA, has taken to buying whole animals or large sections of them, because he says it can trim about 3 percent on food costs. At Equinox, the kitchen will use a chicken in various ways — breast meat in a salad, legs for the staff meal, bones in a stock. Steakhouses are salvaging high-end meat scraps once ground into hamburger, using them for higher-ticket steak tartare.
Speaking of purveyors, a smart operator will develop close ties to suppliers who can tip them off when prices are fluctuating, allowing menu adjustments accordingly. And companies have developed products designed to target current needs: Tyson, for instance, has introduced a value collection with lower-priced and smaller portions as well as cost-conscious larger portions.
And as food costs continue the roller coaster ride that started a couple of years ago, operators are looking at ways to swap out an expensive item for a less-expensive alternative without sacrificing quality. Potatoes are standing in more often for most costly rice, some restaurants are charging extra for pricy toppings and pork is picking up ground from chicken or beef.
In today's environment, more than ever, the chef's job description goes well beyond food. In this battered economy, only those who are creative, adaptable and business savvy are likely to survive.
