Recession's effect on Hill area restaurants?
The restaurant business has always been a high-wire act, or to quote from a Frank Sinatra song, “You’re riding high in April, shot down in May...” There are always going to be new kids on the block to challenge you and take customers away from you. Everybody wants to try out the hot, new trendy spot. An acclaimed chef leaves you to open his/her own restaurant (as almost all of them eventually do). A bad review (even on a blog) can sink an unstable ship.
Cold weather, snow, hot weather, rain — all seem to be your enemies. The customers don’t come; you throw out fresh vegetables and seafood; it’s one pothole after another. A freezer breaks down; more food thrown out. A toilet overflows on a Saturday night. You get a lot of walk-ins (without reservations), and you don’t have enough servers to handle them promptly. They’re angry that they have to wait so long for their food. Your chef calls in sick. Your family is furious with you because you have become a stranger. You juggle the bills because you can’t pay them all.
And then, on top of every other thorn, comes the recession that started in September 2008, and is still in prime time. Here in Chestnut Hill, one restaurant, Shundeez, closed its doors a week-and-a-half ago, and two others, Solaris Grille and ¡Cuba!, are in Chapter 11 bankruptcy proceedings, although they are still in business.
So how has the recession affected the restaurants we go to in this area, and what are they doing to combat it? Over the past few weeks this reporter attempted to get answers to these questions from many restaurants in Chestnut Hill and adjacent communities. A majority of those contacted did not respond to phone messages and/or email messages seeking their comments. Here are the replies from those who did answer:
•Greg Welsh, owner of Chestnut Grill & Sidewalk Cafe, 8229 Germantown Ave.: “I have been compulsively keeping records during my 35 years in the restaurant business, which includes 13 years here at Chestnut Grill, so I can tell you that for 11 years we had steady growth here, with increased gross sales every year. In the first quarter of 2008, we set a record, which was helped by great weather, but then gasoline hit $3 a gallon, and then we started seeing a softening in gross sales. Then came the economic collapse (in September 2008), and for the first time ever, the whole year was down — 6 percent down from the previous year. And then for the entire year of 2009, we had an additional decrease of 9 percent.
“I belong to the National Restaurant Association, and I have access to restaurant records from all over the U.S., so I can tell you that in general the more upscale the restaurant, the more the decline. Many have been off 20 to 40 percent. The only exception is the most expensive steak houses; their customers are so wealthy that the recession means nothing to them.
“People still want to go out to eat, but many are not ordering nearly as many appetizers and desserts as they used to. So our average lunch check has been $12, and our average dinner check has been $25 to $26. February was our worst February ever, but those big snowstorms had a lot to do with that: June was our worst June ever, and July was off 15 percent from last July, but the horrible heat was definitely a factor.
“I have had to cut back on managerial staff and on some foods like meat, and I have to watch every dollar and look for every dollar of savings. Our markup is basically 10 percent, so for every dollar I can save, that’s $10 less I have to bring in. I go to the Restaurant Depot in Manayunk to buy supplies, and every restaurant owner I talk to there is crying the blues.”
•Alisa Consorto, owner of Umbria, 7131 Germantown Ave.: “The recession has been very detrimental. At times I have questioned whether or not we should even continue. I keep wondering when it will end. I have tried prix fixe menus, giving away wine and smaller plates. I started advertising in the spring in the Local, and that has worked well, but I will admit that I am scared.”
•Valerie Erwin, owner of Geechee Girl Rice Cafe, 6825 Germantown Ave.: “I’ve found this economic climate to be very challenging, as has virtually every restaurateur I know. We felt an immediate effect the minute the bottom fell out of the housing market. And although we’ve managed to be stable, I don’t see much evidence of this economic ‘recovery.’ Rather like the way those of us of a certain age read the obituaries with dread, I get a sinking feeling each time I hear of an established restaurant having closed.
“First of all, we pay a lot of attention to our customers and try to keep the restaurant interesting. We’ve reduced our staff a bit. We didn’t lay anyone off, but we didn’t replace some people who left. I’ve been more open to public relations opportunities; recently I was in ‘Grid’ magazine, and I appeared on television, whereas I used to think of them as distractions to my real work. And we’re doing more marketing for our catering operation, which provides extra income apart from the restaurant.”
•Ken Weinstein, owner of Trolley Car Diner & Diner, 7619 Germantown Ave.: “We are moderately priced, so we are in a better position to weather the recession than most restaurants. Our sales have actually increased over the past couple years. When the recession first hit two years ago, we immediately offered daily specials including a $3.50 ‘Recession Burger’ every Wednesday night. That was a big hit, which brought in lots of new customers.
“The Diner now offers half-price kids’ meals on Tuesdays for those families on a tight budget and a Trolley Car Rewards Card that gives back $5 for each $100 spent at the diner and offers a free birthday meal each year and a free appetizer just for signing up.”
•Miguel Angel Castañeda, president, ¡Cuba! Restaurant, 8609 Germantown Ave.: “The recession, especially the timing of the recession, coupled with the snowstorms of this past winter had a severe impact on the restaurant. At the beginning of the recession, controlling costs became paramount. My son, Michael, took over the kitchen, and I took over the front of house management. Having Mike as our chef and me as the general manager not only had a huge impact on our payroll reduction goals, but also propelled the quality and authenticity of our food to truly amazing levels.
“While the past year was extremely difficult, marked and steady progress was made as reflected in our reviews. We are now beginning to realize the benefits of those efforts. Multiple awards were received during that time, staffing was optimized, and I got the opportunity to interact on a daily basis with our many loyal customers.
“With regards to our menu, a renewed focus on value led to new menu offerings, lower priced options (half portions on many entrees), and several prix fixe options ... I believe that today, more than ever, a dining experience must be much more than just a meal.
“While the impact of the recession has long reaching implications with which we are now dealing, I truly believe we are on the other side of this particularly hard period. The second quarter of 2010 was a record quarter for us, and the first month of the third quarter has shown no signs of slowing. Our staff, customers, suppliers and creditors are the best any business could ever hope for. My family and I are truly grateful for their unyielding support. The irony of this (Chapter 11) filing is that revenues are now the best since we opened the restaurant.”
•Dino Dalicandro, son of the owner, Maria Dalicandro, of Maria’s Ristorante on Summit, 8100 Ridge Ave. (at Summit Avenue) in upper Roxborough: “Our numbers dropped by about 20 percent since the recession started, so about six months ago we added a whole new pizza section in addition to our regular dinner menu. We also added a to-go menu. We always had takeout, but we never really pushed it before. As a result, our table numbers have remained about the same, but there’s a lot more takeout now, so that’s working out pretty well.”