The past few weeks for New York City restaurateurs have been a fearful ride. We have been reeling like our Wall Street counterparts one day thinking all is done for…another amazed at how crowded the restaurants were last night. Now the country, nay the world is with us on this roller coaster. I can’t predict what will happen in the financial markets tomorrow but I have my own thoughts on what we can expect in the restaurant world.
This is my fifth ‘recession’ in NYC, my second ‘cataclysmic’ one, 9/11 being the other. That September I remember Maguy LaCoze of Le Bernardin lamenting, “ I have worked all these years to have my restaurant evaporate like this, OVERNIGHT?” There was little restaurant activity in the weeks that followed. My own restaurant L’Ecole and The French Culinary Institute itself were closed for a full week as was the whole of Soho. We all suffered losses, some more than others. Some people did go under. Those who did, did so for various reasons: not having enough working capital or that they just did not have the stomachs to ride out the storm. The restaurants that were consistently hurt were the marginal operations that had not distinguished themselves from the pack. And herein lies the key to who will weather these challenging days.
I had the pleasure of interviewing Danny Meyer recently and I asked him what he thought of the impending recession on the restaurant world. In his ever upbeat manner, he said that he thought it was an excellent opportunity to attract the best and brightest staff. A huge ‘pruning’ will happen in the industry. In the heady years with lots of money sloshing around, many restaurants could open and make it without the professionalism of delivering a good product with good service at the right price.
Today the competition will be fierce for the entertainment dollar. Fewer people will dine out and less often. However, people will continue to eat. And dine. And celebrate birthdays, anniversaries and weddings. Life goes on and food is an integral part of living.
Which restaurants will survive? The best. Best means good quality, good service at fairly priced establishments. Two days after the 700 point Dow drop in late September we held a career fair at The French Culinary Institute. Over 45 restaurants showed up to recruit. David Chang himself was there! Bear Sterns and Lehman Brothers had already gone under, and I asked the restaurateurs why they were still hiring? The answers were pretty much the same…it’s hard to find good people, they were constantly scouting and in addition the restaurant industry has been understaffed for years!
In retrospect, I am amazed at how quickly the restaurant industry bounced back after each recession. Because of the pruning and the competition, the restaurant scene actually got better. Restaurateurs had to lure people back. It provoked innovation and creativity. For example, after the ’74 recession we found a new type of cuisine , a fresh and more relaxed American/Californian dining experience. We were stunned to see on West 17th Street! the architectural investment of the Parisian like brasserie of Johanna’s. After the early eighties recession we discovered a new sophisticated, American purebred restaurant exemplified by Union Square Café and the Soho chic of Odeon. The post internet bubble spawned the David Rockwell school of restaurant as theater and after 9/11 we hemorrhaged with a panorama of excesses from the classy fountain pens of Alain Ducasse to the 14 course ‘three bites’ of Per Se. Budgets for opening a restaurant could no longer rely on having your parents mortgage their homes. Real Estate developers built virtual palaces to have restaurants lure the zillion dollars per square foot clients to purchase their condominiums.
Now what? Well, if past is prologue there will be pruning, there will be months of handwringing and fear. But the best will only get better and we as the dining public are in store for new innovation to lure us back. Can’t wait to see who, where and when….there is a silver lining to every cloud, at least in the restaurant industry. Hope Wall Street fares as well.
