Monday April 6, 2009
(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.
Hearth's Cucina Povera, a rustic $35 three-course, prix fixe meal featuring entrees such as braised lamb shank, is another offer aimed at budget-conscious diners.
"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," Grieco said.
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 Restaurant Association.
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