NYC restaurants slammed by financial crisis

Because of the financial crisis playing out right next door at the New York Stock Exchange,  Hergatt has decided to offer a more casual a la carte menu in the front of the modern, Asian-tinged French restaurant in addition to the prix fixe menu he’s planning for the main room.

“You have to be very sensitive to the trends, and now that the market is very soft, you’re not going to be opening with extravagant prices,” Hergatt said.

The time of ultra-extravagant outings in New York is waning, said Lalia Rach, a dean with New York University’s Tisch Center for Hospitality, Tourism and Sports Management.

“There was a time in the past few years that there was a drink in this city where they rimmed the glass in gold. That time just simply is gone,” Rach said. “People are talking about delaying their retirement because they’ve lost so much in the past few days. You’re then looking with a different eye at your discretionary income and how you are using it.”

For many people, that may mean trading down. Long-time New York restaurateur Danny Meyer said that while he’s still able to fill his banquet rooms, the wait list has gotten shorter. His restaurants that specialize in moderately priced or inexpensive comfort food — like barbecue at Blue Smoke and burgers and frozen custards at Shake Shack — are going “gangbusters.”

Diane Bondareff / AP file New York City restaurateur Danny Meyer said that while he’s still able to fill his banquet rooms, the wait list has gotten shorter.

“The restaurants that have a neighborhood feel are way up,” Meyer said. “People tend to stay close to home, and the ones that are a big night on the town are flat or maybe a little bit down.”

“People are pulling back from restaurants right now, and the forecast shows a net decline in terms of restaurant traffic and sales,” said David Henkes, a vice president with Technomic.

Henkes said full-service restaurants are expected to see a 5 percent decline in sales this year after adjusting for inflation. “That doesn’t happen very often," he said. "Restaurants are somewhat recession-resistant."

To help bring in traffic, many New York restaurants are offering special deals. Lavish sushi restaurant Megu, which has two New York locations, will introduce a $55 prix fixe menu next week in addition to their seven-course $125 tasting menu. Realizing that a $180 9-ounce Kobe beef Chateaubriand was beyond the reach of many customers, Megu has started offering an appetizer portion for $35.

Hali Horn, who runs Mama’s Mudsliders, a sandwich and dessert shop in the West Village, is trying to find lower-cost ingredients, such as pumpkin, to use in her desserts, and recently lowered prices, cutting into her profit margin.

“I look forward to the day when we are out of this crisis and I can add a couple specialty ingredients again,” Horn said. “I hope that people understand that in a few months when I raise the prices, it’s because I have to and not because I want to.”

Other chefs are trying marketing blitzes to get the word out. “Top Chef” Season One contestant Dave Martin has been attending food festivals as well as events like cooking for Google to get the word out about his midtown American restaurant Crave on 42nd.

“This is when being a chef is not just cooking and having fun but being a businessman,” Martin said. “I’m trying to use my business skills to help pull us through.”

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