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Wall Street restaurateurs take stock of market meltdown’s effect on sales

NEW YORK —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Though many have reported a downturn in sales, operators say they are bracing for the possibility of more to come, but point out that the current situation pales in comparison to the drop in business that followed the terrorist attacks of Sept. 11, 2001. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“Listen, obviously these are very hard times,” said Tracy Nieporent, director of marketing for Myriad Restaurant Group, operator of such high-end concepts as Nobu, Tribeca Grill and the newly opened Corton, in lower Manhattan. “But when you walk around the streets it seems like it’s business as usual. People are out and about, living their lives. Whatever happens, we’ll cope with it. It’s much better now than it was after 9/11; that was very traumatic. Right now everyone is in the same boat. We’ve all lost 20 percent of our investments.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Still, Nieporent noted that in the last month he has noticed a bit of a slowdown in table turns, particularly during lunchtime. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“I have noticed some empty tables, but we’re not at the point where we’re asking, ‘What are we going to do?’” he said. “All you can do is control what you can control. The other things you can’t.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Celebrity chef-restaurateur Todd English, who last month opened a 60-seat gastropub called The Libertine at Gild Hall near Wall Street, also has noticed a downturn in business in the area since the market panics began. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“There’s still a lot of activity, but business is down here,” he said. “It’s definitely been affected; you can see it with functions. The party business and private events are down big-time. You just have to work with it, sort of gear menus and food and labor costs to adjust with it.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

English, who said the opening of The Libertine had been planned for the past 18 months, added small plates to the menu as a way of offering affordable items for more cost-conscious consumers. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“We planned the restaurant when things were still booming, so we did have to adjust a little bit,” English said. “We put on smaller plates at smaller prices. It did seem as though people wanted just a little bite to drink with. The place has a pub-friendly price point. We never wanted to be superfancy high-end.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Other Wall Street operators have noticed more customers paying with cash, versus plastic. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“We’re seeing a lot more cash and checks, but not many credit cards—that I can tell you,” said Jason O’Brien, managing partner of Trinity Place, an upscale pub located in New York’s financial district. “But people are still spending. There’s no question about that. Businesswise we’re still pretty solid, so we’re not that concerned yet. We are kind of a middle-of-the road—a $50 spend with wine—so a restaurant like ours would benefit to a degree [from the situation] because businesses still have to entertain their clients.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

For now, however, a bigger-picture analysis of the economy’s effect on spending is an unknown because, as consultant Malcolm M. Knapp said, “it’s going to take at least another month to see where the customer is. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“What they’re feeling today is not what they’re going to be feeling in another month,” he said. “We’re right in the middle of it. People are in a panic, making enormous withdrawals from their stock and money market funds. Until we get a culmination in the market, until there’s some stability or bottoming out, there’s no way to predict what people will do.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Data collected for New York’s 2009 Zagat guide backed up Knapp’s analysis of the situation. The survey, which based its findings on the responses of approximately 38,128 consumers across the five boroughs, found that approximately 38 percent of New Yorkers claimed they are eating out less often and cited the economic crisis as the reason. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

The survey also determined that in addition to the decline in dining frequency, when consumers do eat out, they are dining in less expensive places, being more attentive to menu prices, skipping appetizers and desserts, and cutting back on alcohol consumption. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Nonetheless, the survey found that the average cost of a restaurant meal in New York City increased 3.3 percent to $40.78, putting it above Zagat’s national average of $34.09. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Still, “restaurants are clearly feeling the pinch from the economic crisis, but in the long run they will weather this storm just as they did after 1987’s Black Monday and 9/11,” said Tim Zagat, chief executive of Zagat Survey. “While we foresee some hard times, New York is likely to remain the world’s leading restaurant city.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

The survey also found that the number of New York restaurant openings this year decreased for the first time since 2003, from 163 in 2007 to 119 in 2008. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

But according to Knapp, the situation in New York and on Wall Street is a microcosm of what is potentially a larger, national issue: remaining in business during the downturn. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“A number of independents will have a problem because traditionally they’re not very well-capitalized,” he said. “If you don’t have a good balance sheet or good capitalization, you’re very vulnerable in down cycles.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Smaller operations typically can’t insulate themselves from commodity pressures, he said, and may have more trouble financing than the larger chains. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“This is one of those matters where size really does count as long as you have a good balance sheet,” Knapp said. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

Knapp further contended that restaurateurs may benefit from the downturn in an unexpected way: Because so many people have lost much of their 401(k) funds, they’ll be working longer and dining out more as a result. —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

“I know it sounds like cold comfort right now, but as people face up to the fact they can’t retire as early as they might have, they’ll be working longer,” he said. “When people work, they eat out more often. That’s not a short-term thing; that will be a secular trend.” —Restaurateurs on or around Wall Street, the epicenter of the country’s financial gridlock, say they are uncertain of the extent of the impact the crisis will have on their businesses.

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