Eating in: Restaurants look to attract customers

Until recently, Tim Wirth, a St. Paul fire captain, and his wife, Diane, dined out at least once a week at places such as the Bungalow in Lakeland, or Mama Maria's in North Hudson, Wis. "Going out to eat is our favorite form of entertainment," he said.

But as the economy has worsened, the Wirths have cut back. "We go out to dinner maybe once a month. We discovered we could make a pretty good meal at home and save a lot of money," he said.

Eating at home increased last year for the first time since 2001, according to a federal government report. In addition, the National Restaurant Association found that 54 percent of restaurants reported declining traffic in January, and 15 percent of restaurant operators said the economy was their No. 1 challenge, up from only 4 percent six months earlier. Another study, by restaurant research firm Technomic, said 59 percent of consumers expect to cut back on how often they dine out.

The local fallout from those trends has begun. Romano's Macaroni Grill in Burnsville closed recently. But the good news is that the weak economy has turned the Twin Cities into an eater's market as restaurants trim prices and offer specials.

Phil Roberts of the restaurant group Parasole, which owns Manny's, Oceanaire, Salut and Pittsburgh Blue, says the mid-level restaurant chains that cater to those living check to check are struggling the most.

"A lot of people are getting hurt; there's blood in the streets," Roberts said. "As the price of gas goes up and people worry about jobs, they go to cheap places or stay home. But McDonald's is hitting the cover off the ball. "

Coming in less, ordering cheap

John Hamburger, publisher of Roseville-based Franchise Times magazine, agrees. Hardest-hit have been the casual-dining bar and grill business, he said. The quick-serve business has actually been pretty good because people have trended down.

"People thought that the higher-end places wouldn't get hit, but they're just as susceptible," Hamburger said. "If you look at the publicly held steakhouses -- Morton's, Ruth's Chris, Outback -- their sales have been down, too."

Local restaurateurs say customers are coming in less, ordering cheaper items, and sometimes cutting back on the special sauce -- alcoholic beverages. "I don't think wine sales are as high. They're generally pretty soft," Hamburger said.

Daniel Springros, general manager at 112 Eatery, has noted that traffic begins more slowly and dies off earlier at night. "Also, what people are choosing to buy has changed. We're selling a lot more of our sandwiches and lower-price-point items. We're selling a lot of cheeseburgers these days."

In many cases, high-end restaurateurs are "downscaling" their menus: The once-tony Restaurant Levain has morphed into the more casual Cafe Levain, and haute-cuisine chef Stewart Woodman has opened Heidi's, named for his wife, with all entrees less than $20.

Randy Norman, an owner of recently opened R. Norman's Steakhouse in downtown Minneapolis and a partner in Bellanotte, has been through tough times before, in the 1980s when he was a manager for an upscale Southern restaurant chain.

The economy "has definitely hurt everyone across the board," Norman said. "We're the new kid on the block, and we opened when nothing much was going on. I learned that you continue to do what you do and do it well. But you also do a little extra."

Those extras include "Miso Mondays" in 7 Sushi Ultra Lounge, upstairs at R. Norman's, with all-you-can-eat sushi. "We have affordable features every single day, and we extended our happy hour to 6:30 [from 5:30]," said Norman.

'Safe harbor' menu deals

To Roberts' surprise, Parasole's upscale and "polished casual" eateries are going against the trend. "Sales are not down, and guest counts are up 3 percent. That's unheard of now, because I've heard of 6-, 8-, 10-percent cuts. I don't know why our business is up."

Perhaps it's because the highest-end diners, if they are being cautious, go "slumming" in slightly less ostentatious places than they used to. "A Morton's diner doesn't become an Outback diner, because it's not who he thinks he is and not the people he wants to be around," Roberts said.

Or perhaps it's because Roberts has been on the mad-mouse ride so many times that he's learned to build buffers into the business. He calls them "safe harbor" menu items.

"We know the economy is struggling, and we have addressed it aggressively," he said. "You have to get the value proposition right and have items on the menu everyone can afford."

At Salut, he created "La Deal," a three-course dinner for $14.95, and a "Sunday supper" with mini-burgers and "a plate of fries as big as a basketball" for $8.95 per person. At Figlio, it's a skillet with "big bricks of lasagna that you can take home as leftovers."

While some restaurants use smaller plates to make reduced portions look larger, Roberts said that's "the kiss of death." Instead, he offers smaller portions at lower prices and then trumpets those items. "We have a section at Salut called, 'Why French Women Don't Get Fat.'"

So far, it's working. "But who knows, tomorrow it might all change," Roberts said. "Tomorrow I might be an idiot."

bill.ward@startribune.com • 612-673-7643 jtevlin@startribune.com • 612-673-1702