Restaurants: Coping as diners tighten belts

  • Article by: BILL WARD , Star Tribune
  • Updated: October 9, 2008 - 11:11 AM

In tough economic times, local restaurants have adapted to survive.

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Brenda Langton, at her Spoonriver restaurant near the new Guthrie, says people are still dining out but scaling back on what they order.

Photo: Tom Sweeney, Star Tribune

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Leave it to the ever-blunt Brenda Langton to provide the most candid assessment of the economic downturn's effect on the local restaurant scene:

"It's scary for everyone," said Langton, chef/owner of two Minneapolis restaurants. "There's no question we've felt the effects."

Langton, who has owned Cafe Brenda for more than two decades and opened Spoonriver two years ago, has seen some tough times, "but nothing quite like this." She cites the loyalty of Cafe Brenda customers and Spoonriver's proximity to the Guthrie Theater and its nightly crowds as the prime factors in her places "doing OK."

People are still eating out just as much as last year, many local restaurateurs say. But customers are downsizing, ordering fewer entrees and more small plates to share or cutting back on their wine and spirits purchases.

"People are buying just as much wine as before," said Mark Marchionda, wine director at the upscale Italian restaurant I Nonni in Lilydale, "but they're spending 10 to 15 percent less on it." Several other local restaurant officials said they are serving just as many customers these days, but the revenue per customer is down.

Restaurants also are downsizing themselves. Skyrocketing food and fuel prices make it almost impossible to cut prices on particular dishes. So Langton looked at entrees in a different way, removing the $29 strip steak from Spoonriver's menu and replacing it with a $20 flank steak. Other restaurants have added more appetizers, and everyone has become more flexible about customers sharing dishes.

That makes sense when even the First Family is eating family-style. When Laura Bush dined at Mission American Kitchen in Minneapolis during last month's Republican National Convention, she and her table of seven shared a couple of salads and four entrees.

The scaling-back is even happening in Edina, where Louisa Eifrig Pineault said that her daughter's college tuition, "coupled with the rising costs of just about everything, have caused our dinner habits to do a 180 degree turn. ... If we do go out to eat, we split entrees, don't order appetizers, and skip the alcohol. More often than not, however, we'll do take-out instead of a sit-down dinner."

Pineault said that up until this year, her family ate a few times a month at the Red Pepper in Richfield. "Now, we've given up eating at the restaurant completely and only order take-out once a month, if that. It's just too expensive to eat out, once we factor in the rising cost of entrees, the waiter's tip, and the cost of a bottle of wine with dinner.

"The restaurant owner looks wistful every time we come in, wondering aloud why she doesn't see us anymore. I haven't got the heart to tell her we simply can't afford it."

Here's the beef

Given the state of the economy, it's hardly surprising that high-end restaurateurs have been thinking smaller and more casual. Several eateries recently opened by the Twin Cities' top chefs have downsized in terms of prices, if not ambition, with great success.

Stewart Woodman's new place, Heidi's in south Minneapolis, has no entrees over $20, no shortage of culinary flourishes and no tables available for the next several weekends.

In June 2007, Alex Roberts opened Brasa, where meals cost less than half as much as those at his flagship Restaurant Alma. It has been so successful -- often exceeding 400 customers a day -- that Roberts is looking to open a second Brasa on St. Paul's Grand Avenue.

When the spendy La Belle Vie moved from Stillwater to the outskirts of downtown Minneapolis, it gained something just as important as the upscale urban clientele: a spacious lounge that's more informal and inexpensive. "We needed to do this," said co-owner Josh Thoma. "We had a hallway with a few chairs in it in Stillwater."

Having a more casual adjoining space has also been a boon for Lucia's in Minneapolis and Heartland in St. Paul, both of which added hugely successful wine bars. (Lucia Watson subsequently opened an always-packed takeout place down the block.)

In the past few months Thoma and chef/co-owner Tim McKee have opened two lower-priced restaurants, Smalley's Caribbean Barbeque & Pirate Bar in Stillwater and Barrio, a tequila bar with Mexican food in downtown Minneapolis. The economy was a factor but not the only one, Thoma noted.

"We already have restaurants at higher price points," Thoma said, "so it made sense to do restaurants that won't compete with ourselves.

"Plus there's only so many people on a given night who are looking for a fine-dining experience. But there are a lot of people on a given night looking for a casual dining spot."

High-end mainstays such as La Belle Vie and Alma are sailing along, their owners say, luring clients who are relatively immune to the faltering economy. In a town that would seem to have a glut of expense-account steakhouses, not only are the holdovers (Morton's, Ruth's Chris, Capital Grille) still going strong, but the ranks have been further swelled by the carnivore-crazy chain Fogo de Chao, packed since opening 17 months ago, and the Strip Club in St. Paul.

Meanwhile, Manny's recent move from the Hyatt Regency to another Minneapolis hotel, the new W, has brought a boon in business to an already-successful beef (and baked-potatoes-bigger-than-your-head) emporium. The lone struggler in that category, insiders say, has been Seven the Steakhouse (formerly r. Norman's), which has undergone management changes and failed to draw the kind of crowds that its posh upstairs nightclub lures.

Only the smart survive

Many observers expressed surprise that so few restaurants have closed. The most conspicuous local closings have been St. Paul's Zander's Cafe and three Uptown Minneapolis restaurants, Campiello, Giorgio's and jP's American Bistro. Lease problems and Giorgio Cherubini's retirement were significant factors in those closings.

But this year has had nothing like the spate of closings in the summer of 2007, when three deluxe downtown St. Paul restaurants -- Fhima's, A Rebours and Margaux -- closed within a matter of months.

Since then, though, pricey chef-driven restaurants have continued to open, including the 21st-century supper club Red Stag, Sanctuary and Meritage (in A Rebours' old space). Not surprisingly, more moderately priced eateries now occupy the spaces at Fhima's (Pop!!) and Margaux (Sawatdee).

There's also no shortage of new upscale restaurants at splashy hotels, including Bank, Porter & Frye and restaurant Max. But their success is largely tied to the hotel's fortunes.

"White-tablecloth places are great for a hotel, but most everybody else is having to downsize," said Scott Davis, owner of the Minneapolis wine bar Toast. "That's why you see places like 112 Eatery and Red Stag that are really trying to cater to the 'come back again this week' crowd and not the 'we'll see you in two or three months' crowd."

Restaurants also are not buying as much wine at medium or high price points, local distributors agree, which creates a trickle-down effect for those businesses.

But people have to eat, and they want to drink (tough times hardly change that fact of life), so smart restaurateurs figure to survive.

"I know for a fact that Americans are not cooking as much as they used to," said Roberts, "and I knew when I opened Brasa that we were headed for some tougher economic times. So if you have an easier price point, that will be a draw. It also helps to have a menu that you can eat from every day."

Bill Ward • 612-673-7643

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