If there’s one business that’s feeling the crunch of the tight times we now inhabit, it just might be the restaurant industry. With food prices rising, shipping costs soaring and consumer behavior becoming more cautious, it seems that those enterprises that rely on all three to turn a profit would be in trouble.
While to declare the restaurant industry on the verge of collapse is reactionary, it has definitely seen decline. According to the Restaurant Performance Index a monthly report compiled by the National Restaurant Association the industry as a whole actually had a slight improvement in April, the most recent month in which figures are available. It was only a 0.4 percent gain from March, however, when the index reached a record low.
Restaurant owners have also reported negative same-store sales for the fifth time in six months, and cited the economy and food prices as their top concerns.
The point is that operating an eatery can be a dodgy business, at least on a national scale.
However, some local restaurant owners are resting easy despite the slowdown.
Desiree Kalleigh, who has owned and operated Good Times Restaurant in Ballston Lake for 20 years, says that while there has been a change in consumer behavior, business owners must simply learn to adapt.
`I change my menu from day to night sometimes if I find the menu isn’t what they’re looking for,` said Kalleigh. `I change constantly.`
One of those changes is the reintroduction of pizza to Good Times, which the restaurant hasn’t seen in 20 years.
`It helps keep their bill reasonable,` said Kalleigh.
Desire for a smaller bill is a consumer trend not limited to any one area. In the service industry, however, frugal meals could have a direct impact an entire occupation: servers.
Michael Lynn is a professor of Marketing and Tourism at Cornell University and an expert on tipping. There are currently no academic studies investigating the impact of the economic climate on tipping. `Nevertheless,` said Lynn, `you would expect that tip income is going to go down in three ways.`
If fewer people are dining out to begin with, servers will have fewer chances to scoop up money as meals end. Secondly, since gratuity is generally based on how much one spends, smaller bills will mean leaner tips.
Lynn also suspects that the percentage people tip will go down.
`It’s logical,` he said. `The closest data I have is that price sensitivity is related to tipping. The more price sensitive people are, the less they are going to tip.`
Under New York State Law, the minimum wage for food service workers is $4.60 per hour; $2.55 less than the general minimum wage.
Rebecca Schroeptel, a manager at the Pump Station Restaurant in Albany, says that she has noticed changes in her clientele.
`People are tending to order cheaper dishes, have fewer drinks and tip worse,` said Schroeptel.
The restaurant has been seeing more customers, however, making their sales on par with last year’s.
The Pump Station has changed their menu recently, cutting out a lot of bread-based dishes due to the escalating price of flour. Schroeptel also said they are considering switching from using increasingly expensive Styrofoam containers, whose production requires petroleum.
The consensus among local eateries is that people will still be eating out, and they’ll want a more unique experience than that afforded by chain restaurants.
`I don’t think what we’re reading in the newspapers is affecting us here in the northeast area,` said Michael Bauer, owner of Bloomers Bistro in Malta. He says that while the cost of food and fuel has gone up, he hasn’t raised prices and is still seeing plenty of customers.
`People still do look to go out to dinner as a form of entertainment,` said Bauer. `Instead of taking a vacation, they’ll be going out to eat.`
Kalleigh said she’s seeing a lot more repeat customers these days. `People are willing to take the drive locally,` she said. `I’m not seeing as many people coming off the Northway, where I have signs up. That business is almost obsolete.`
Consumers definitely want an equal experience for less money these days, and that will be a boon for those offering the cheaper options.
Bret Daniel, owner of the Union Inn in Schenectady, says that he’s `seen an increase in coupons. Business on our specialty nights has increased.`
The Union Inn’s menu mainly consists of burgers and other bar fare, and though he recently increased his prices for the first time since his business opened, Daniel says people are still looking for good food at a low price.
`Instead of a $20 restaurant, people are going out for the cheaper options,` he said.“