Wednesday, June 17, 2009

The Paradox of Dining Out in 2009

In the current economic downturn, it is no surprise that individuals, families and businesses are cutting back in how often they go out to eat and how much they spend when they do.

The paradox is that, just as so many are reducing their spending in restaurants and travel, there has not been a better value in dining out for years. And the value and satisfaction of preparing gourmet meals at home has not been clearer.

It’s mostly simple supply and demand. Restaurants and food organizations must deal with fixed rising overhead costs, including rent, labor, utilities and, to a lesser extent, food costs, but to attract customers, they have had to lower food prices.

We have also observed a decades-long boom in the food hospitality industry, with costly labor-intensive culinary creativity and innovation that has created a whole new class of diners and an enlarged group of “foodies” who dine out with greater frequency. The corporate boom has also magnified expense account dining (even with tougher tax deduction rules), and an explosion of upscale clienteles, private and corporate, has made the restaurant and catering industry into a central and profitable institution in daily
American culture.

Food and dining has become a central element of popular culture in the developed world in ways that have not previously existed. In the past, so-called fine dining was a practice limited only to royalty, the nobility, and later, the very rich. At the beginning of the 19th century in Europe, food preservation advances enabled cooks to become "chefs." and to refine food preparation into formal recipes. Cookbooks began to appear, and the aristocratic classes developed elaborate dining practices. This reached a peak in England where the "Edwardian Age" (named after Albert Edward, later Edward VII, the Prince of Wales and son of Queen Victoria) was accompanied by elaborate and ritualized multi-course breakfasts, lunches and dinners, punctuated with morning and afternoon "teas" and midnight buffets. A relic of this extraordinary daily feasting can be found on some of today's first class cruise ships. (It is perhaps instructive that Edward died prematurely in 1908 from the consequences of overeating and drinking.)

The industrial age also created men and women of great wealth, including in the United States, who quickly adopted and imitated the culinary practices of the nobility.

It was not until the mid-20th century that fine dining and hitherto exotic ethnic cuisines began to be available to middle class Americans. Radio and television, paperback cookbooks, Julia Childs, and more reasonably priced restaurants multiplied interest, even as Americans became more affluent and had more money to spend on what and where they ate. American soldiers returned from World Wars I and II, Korea and Viet Nam having tasted the cuisines of Europe and Asia. Recent immigrants from Mexico and South America brought their national dishes to the American table, as had earlier immigrants from Europe. At the same time, American farmers began producing more and more organic food, a greater variety of fruits, vegetables and cheeses while transportation advances made possible delivery of virtually any reasonably fresh food
product from anywhere in the world to kitchens all over the United States. A long-term "food boom" had taken place.

But with rising unemployment, furloughing and downsizing growing everywhere, one of the first areas of private and corporate expenditure cutbacks is in lifestyle luxuries such as travel, entertaining and dining out. In simplest terms, many restaurants, booming only months ago, find themselves nearly empty at previous peak times, even as they must pay the same rent, employ a chef staff and a wait staff, and pay for fixed costs such as utilities, insurance and business fees. To draw customers back, many upscale restaurants. are creating “happy hours” (early and late), ‘early bird” dinners and other special prix fixe menus and other promotions.

This is happening across the country, particularly in cities and areas where the new upscale food culture has flourished.

As a case in point, the Twin Cities of Minneapolis and St. Paul have seen an explosion of new restaurants and an increasingly sophisticated clientele in the past two decades. Whereas 30 years ago, serious French, northern Italian and innovative American menus were rare or non-existent, and choices of ethnic cuisines limited, today many such restaurants now are open in the two downtowns, neighborhoods and prosperous suburbs. Virtually all ethnic cuisines are now represented as well. Furthermore, the growth of restaurants which serve organic, wild-caught,and locally-grown menus has been significant.

There has been, in short, a dramatic change in availability of choices for the serious Twin Cities diner.

A few months ago, however, local restaurateurs began to notice significant drop-offs in their business. The most popular high-end restaurants, always seemingly full (especially on weekends), now had tables available even at peak hours. Weekday evenings were suddenly bleak, and even the busy daily downtown lunch business was noticeably off.

Many diners also downsized their restaurant choice. Fast-food and other lower-priced restaurant chains now received increased business even as their higher-priced independent colleagues saw their gross receipts wane.

Restaurateurs know that raising prices is exactly the wrong strategy in such a time (even as government bureaucrats and policy makers do not seem to understand this basic economic truth). Higher menu prices only further drive away regular customers and discourage new ones.

It is a time like this when a "dirty little secret" of fine dining comes, by necessity, to the fore. The caveat is that at least one member of a "foodie" family needs to be a good cook. If this is so, and especially if more than one family member knows how to prepare food, then fine dining can be available almost every night at a fraction of what it would cost in a restaurant. The finest prime meats, freshest seafoods, best produce, and the best wines can be purchased at local grocery stores, supermarkets and specialty shops (in some cases, better than what was purchased by the restaurant). Freshness is known, menu choice is almost infinite, and the meal can be enjoyed without babysitters, valet parking, extra sales taxes and tipping. Instead of a steak dinner costing $75 or $100 (or more) per person (when all the cost are added), it will cost $20 or $25 (or less) per person. A multi-course gourmet dinner that might cost $100 or $150 (or more) per person at one of the best local restaurants, may cost $25 or $30 (or less) per person at home. When two or more are dining, this represents a dramatic savings. The downside is that someone has to do the cooking, someone has to clean up, and there is no special feeling of dining out.

The latter means that dining out still thrives, and the restaurant that maintains and enhances its special character, menu choice, and good service while at the same time adjusting to provide more value for its dining experience, will survive through this economic downturn.

For the time being, however, it's a buyer's market. And a good time for those who write and sell cookbooks.

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