From Nation's Restaurant News (www.nrn.com) and CNN
: Taking a page from the fast-food playbook, upscale restaurants are offering meals for bargain prices in an attempt to reverse falling sales. Hearth in New York City, for example, is serving a three-course meal for $35, while McCormick & Schmick's is selling a steak and lobster dinner with dessert for $29.95.
(CNN) -- Americans hungry for feel-good fine dining are reaping the benefits of the struggling economy.
Wine deals, bar menu specials and three-course, prix fixe meals for
$25 to $40 are popping up in high-end eateries across the country to
lure customers as business and leisure travel dips and diners stay
closer to home and make more value-driven decisions about eating out.
For Manhattan restaurateur Paul Grieco, sticking to good food and the
warm, hospitable philosophy of his East Village restaurant, Hearth, is
key to devising dining promotions to combat a 20 percent dip in
business from the same period last year.
"Every restaurant out
there is leading with the discount, and the consumer -- it's become one
big blur. We're all competing against each other -- none of us are
coming out winners," Grieco said.
To differentiate Hearth this
winter, Grieco and the restaurant's chef created five winter soups
available at the bar for $5 each, paired with $5 glasses of sherry.
This spring, Grieco plans to offer $5 spring salads.
Cucina Povera, a rustic $35 three-course, prix fixe meal featuring
entrees such as braised lamb shank, is another offer aimed at
"A year ago, to be honest, I didn't have to hit that three-course menu at $35 a head. Now you have to," Grieco said.
Grieco said he hopes the special menu items and prix fixe offering will
attract more neighborhood diners to Hearth, one of the most expensive
restaurants in the East Village.
"You need that neighborhood
crowd, and because of our price point, maybe not everyone in the East
Village was able to come to Hearth. Well, we need to change that,"
Taking menu price inflation into account, the
National Restaurant Association expects the restaurant industry's sales
to decline by 1 percent in 2009. A similar drop in 2008 makes for the
first consecutive back-to-back decline for the industry since the
organization started tracking sales in 1970.
"This is currently
the most challenging environment for restaurant operators in several
decades," said Hudson Riehle, head of research at the National
While the decline is relatively small
compared with other industries, pricier restaurants take a bigger hit
in a down economy, and establishments that rely heavily on travelers
are likely to feel the economic slump acutely as total travel expenditures in the U.S. are expected to dip by 6.7 percent in 2009, according to the U.S. Travel Association.
At national seafood chain McCormick & Schmick's, 35 percent to 40
percent of the customer traffic, on average, comes from business
travelers, according to CEO Bill Freeman. Sales through the end of
February were down 13 percent from last year. CNN