From Upscale to Fast Food, Restaurants Feel a Pinch : Dining: As sales dry up, closures of familiar eateries have become common. One out of six jobs in the industry have vanished in the last three years.
Back in Southern California’s salad days, unemployed actors could always get a job waiting tables.
Now, unemployed aerospace workers may not even be able to land a job washing dishes. One out of every six jobs in Orange County’s restaurant industry has vanished since 1989 in a recession that has dried up sales at bars and eateries like no downturn in recent memory.
“I honestly don’t know anyone who can say today that they’re doing great,” said Russell Armstrong, who runs Trees restaurant in Corona del Mar. “The restaurant column in the (Los Angeles Times) Calendar section has become more and more like an obituary column.”
The names of the dearly departed are on every restaurateur’s lips. First to fold was Rex, where Newport Beach’s free-spending bon vivants kept vintage wines in personal lockers, then the Zeppa, where Anthony Kennedy Shriver held a posh fund-raiser, and finally Bouzy Rouge, whose adventuresome menu was matched by equally eye-opening prices.
Even Villa Nova, which offers cruise-up service for yachts that glide up Newport Bay’s Lido Channel, has now filed for Chapter 11, though it plans to stay open.
Upscale restaurants--known in the trade as “white tablecloths”--tasted the recession’s bitter bite first. But business is also souring for fast-food restaurants, where recession-weary consumers are flocking for discounts, clipping coupons and demanding more and better food for their money.
A survey by Coopers & Lybrand finds annual sales for California’s $25-billion restaurant industry fell 0.5% in 1991, following a weak year in 1990. But at upscale restaurants, where a dinner check averages more than $20 per person, sales fell 5.5%--and at “quick service” restaurants, where food is served over the counter, sales fell 3.4% in 1991.
Mid-priced eateries fared best. Coffee shops and family restaurants, for example, saw their sales rise 2.1%, but still did not keep pace with the 3% inflation for 1991.
The 70 restaurants Coopers & Lybrand surveyed in Orange County seemed to mirror the statewide trend. Casual dining spots, where a dinner check averages $8 to $20, saw sales fall 0.4%, family restaurants, where dinner runs $4 to $12, saw business increase 0.75%, and sales at fast-food restaurants fell 3%.
“People are buying down,” said Jim Walker, owner of Pasta Mesa in Costa Mesa. “They are looking more for value. . . . No matter how good the food or the service is, to pay $50 for a fettuccine primavera is like, why?”
Entrees at Walker’s pasta place start at $6.50 and peak at $12, and he says the prices have helped him net an 8% sales increase last year. But he jokes that he’s considering installing calculators on every table because the customers have started scrutinizing their bills with a new vigilance.
Cutting costs helps, but some hard-hit restaurants are already cut to the bone. A California Restaurant Assn. survey of its 3,000 members found 53% reporting that the recession had cut into their sales--and 21% of those said business was down 20% or more. Fourteen percent had laid off workers.
Indeed, if the recession has restaurant owners moaning, it is the restaurant workers who are howling in pain.
Employment at Orange County eating and drinking places dropped 16.6% between the first quarter of 1989 and the first quarter of this year, from 88,200 jobs to 73,600, state employment statistics show.
On the street, that means that one in six restaurant workers are out looking for jobs--and they now have to compete with laid-off workers from other industries.
Armstrong says he now gets five applications a week at Trees, up from five a month before the recession. “I don’t know where they’re turning for jobs,” he said.
At Ruby’s Diners, most of the help used to be young folks, especially students. Now, owner Doug Cavanaugh says, “we’re seeing an older applicant, perhaps who’s had a job before in a different industry. . . . We’ve got a steady supply of qualified, well-educated individuals.”
Walker did place a newspaper ad for an assistant store manager--and got more than 40 responses. Many were from victims of the restaurant recession, but some had held upper management jobs in other industries. One was the former marketing manager for a large advertising firm.
Some waiters and waitresses who still have jobs find the tips aren’t what they used to be, either. Expense account diners think twice before tipping heavily on their employer’s tab, and some customers have become downright chintzy.
“If they leave a good tip, it’s not necessarily because they’re being generous,” sighed one foot-weary soul. “It’s because you’ve earned it.”
