High-end restaurants on a tightrope of economic uncertainty

Los Angeles Times Staff Writer

PEOPLE always have to eat, but do they have to dine out? That's the question Southern California's top chefs are facing after the last few weeks of grim economic news.

Most say that though the economic trickle-down is hurting business, so far it's been more of a hard rain than a tsunami.

Still, you can expect to see more of recent trends designed to make fine dining affordable, such as the recent proliferation of special fixed-price menus and the upsurge of more casual bistros and brasseries.

And there's an awful feeling of waiting for the next shoe to drop. What makes this even more striking is that these measures are being taken by some of the area's most popular restaurants, businesses that are usually having to turn customers away rather than having to lure them in.

"Just in the last two weeks you get the feeling that everything has changed," says Josiah Citrin of Michelin two-star Melisse. "This is something different than anything we've seen before, I think. It's scary when you look at all these businesses failing that have been around for a hundred years. We don't know everyday what's going to happen."

Restaurateurs are taking steps to control costs, but they say their options are limited. Guests still expect a night out to be a celebration, with delicious food and hospitable service in a gorgeous setting.

Tom Colicchio, chef-owner of Craft restaurants in Century City and Manhattan and star of the Bravo network's "Top Chef" reality show, says economizing comes down to little things like making sure lights and air conditioning are turned off at night. And reminding staff members that they broke $3,000 worth of wine glasses last month and need to do better.

But don't even think about asking him to cut corners on his food. "I'm not going to start buying inferior products and lowering my prices a little bit just to try to bring in more people," Colicchio says. "The worst mistake you can make in a market like this is cutting the quality of what you do to try to keep pace with the business."

Getting creative

STUCK IN an economic squeeze, restaurateurs are trying some new tactics.

One popular idea is offering special menus on days that are normally slower. Frequently these are fixed menus at more affordable prices, which allow restaurants to gauge their ordering more accurately and balance costs better while still offering their customers a taste of luxury.

Then, of course, there is the bistro-ization of Southern California restaurants. Alain Giraud's Anisette in Santa Monica and David Myers' Comme Ça in West Hollywood are the standard-bearers so far, but Thomas Keller's Bouchon is still to come.

"We're a place where you can be comfortable going without paying too much," Giraud says. "If someone wants to stop at the bar tonight and have three oysters and a glass of water, they're fine -- well, maybe a glass of Champagne would be better. But if you want to have a whole meal, you can do that too."

These restaurants were planned before the current downturn, but they are benefiting nonetheless.

Even restaurants that aren't classic bistros or brasseries are moving in that direction. One of the biggest openings recently has been Octavio Becerra's Palate Food + Wine in Glendale, which revolves around what might be called "medium plates" with a menu that tops out at about $20.

Michel Richard's Citrus at Social in Hollywood is heading there too. The restaurant opened in February as a fine-dining destination with entree prices reaching $40 and higher, but the chef says the menu is being retooled with smaller portions and lower prices.

Another bistro idea Becerra embraced is the communal table -- there are two at Palate. It not only creates a friendly, informal atmosphere, it fills out the tables more efficiently.

One tried-and-true method of dealing with economic downturns that's sure to come back is serving less expensive but still delicious cuts of meat. After the stock market crash of 2001, hangar steak seemed to be everywhere and pork belly became the new foie gras.

This slowdown comes on the heels of what has been a very busy year on the Los Angeles restaurant scene, with high-profile openings from nationally known chefs such as Gordon Ramsay, Richard, Charlie Palmer and Laurent Tourondel. And there's more to come. In the next month or so, we'll see new outposts from José Andrés and Michael Mina.

But fine-dining restaurants are what economists would call "lagging indicators." Because it usually takes one or more years to open a place, they are more reflective of financial conditions of the past rather than of the present.

Furthermore, Ramsay, Andrés, Mina and Keller are opening restaurants in luxury hotels, which have deep pockets for what they regard as necessary amenities.

Rather than bank failures and the credit crunch, what most chefs say they're dealing with now are the lasting effects of spring and summer's difficulties, primarily rising gas prices that have discouraged customers from eating out and tacked on a hefty increase in ingredient costs.

At home, you can respond to rising food prices by dining more humbly, but that's not an option luxury restaurants can offer. Nor is raising prices on customers who are already feeling squeezed in other ways.

"Everyone wants to eat well, and everyone wants to have the best ingredients," says Myers, who has both high-end Sona and the more casual Comme Ça. "But when you find out what that really costs, it's astronomical. That's true whether you're shopping at Whole Foods and paying $100 for a bag of groceries or whether you're shopping for a restaurant. It all adds up."

Providence's Michael Cimarusti says his business is growing nicely -- his gross revenue is up about 8% from last year. But costs are up even more.

And it's not just exotics that are pricey. Citrin says he's paying more for staples such as milk and butter. "Flour is up 60%," he says. "You just have to be really disciplined about how much you buy, and you have to watch your cash flow."

Another sticking point is paying cooks and waiters. It costs just as much to staff a restaurant that is three-fourths full as it does one that is packed. As a result of those and other fixed costs such as laundry and utilities, Citrin says Melisse's expenses have risen by almost 13% in the last year.

"What was a good week last year may not be a good week anymore," he says.

Keep diners happy

IN THE end, Colicchio says, it's focusing on old-fashioned culinary values that will pull restaurants through, not marketing wizardry or financial trickery.

"You're not going to make it by buying inferior products or by cutting staff back so much that they're running around and not offering good service," he says. "If you're a quality restaurant, you have to continue to meet those standards. If you don't, you're going to lose customers and they won't come back when times get better.

"Remember, we're in the hospitality business and the implication is that we're here to nourish people's stomachs, but also somehow to make them feel better when they leave than when they came in. That's especially true these days when everyone's sitting there watching their 401(k)s dwindle."


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