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Operators capitalize as more guests ‘do lunch’

Despite economic turmoil that seems to escalate daily, many moderately priced full-service restaurants that cater to the business lunch crowd are finding opportunities to maintain customer volumes.

However, some higher-scale places are throwing in the towel on lunch service as corporate clients retrench amid the nation’s worsened fiscal malaise.

A prevalent factor in lunch market trends these days that’s working in favor of many lunch specialists is that business guests are being compelled to shift their entertainment of clients away from more expensive dinner meetings, operators say.

With the possible exception of restaurants in downtown Manhattan’s shell-shocked Wall Street area, operators in business districts nationwide are reporting that the sky has not fallen on the lunch daypart. Many speculate that their business clients are shunning evening get-togethers in favor of daytime meal meetings. Whatever the reason, few business-dinner-oriented operators who were contacted for this story complained about dwindling lunch traffic.

In Chicago, Lettuce Entertain You Enterprises chief executive Kevin Brown’s multiconcept company has not seen lunch declines at LEYE’s three higher-end business district restaurants, Shaw’s Crab House, Petterino’s or Joe’s Seafood, Prime Steak & Stone Crab.

“Some people have traded down from dinner to lunch meetings, which are a little less money,” Brown said.

Check averages have fallen somewhat, but customer counts have not, though business groups are smaller than in the recent past, Brown said.

To further court its business clientele, Lettuce Entertain You is paying closer attention than ever to lunch customers’ changing habits as well as to food quality, value, service, guest recognition and timeliness, he added.

For example, at Petterino’s, which borders Chicago’s financial district, the bar area has been expanded to accommodate diners showing increasing interest in televised news headlines during lunch.

Raising the bar on customer service also has become a bigger priority at 25-unit Fox Restaurant Concepts, based in Scottsdale, Ariz., said co-owner Sam Fox.

“We are working harder than we were 18 months ago,” he said.

The blended lunch check average among Fox’s varied concepts is about $16.50, and lunch business is up about 4 percent from a year ago, Fox said, noting that his restaurants don’t push promotions or discounts but rely on word-of-mouth in their trading areas of Phoenix and Tucson, Ariz.; Denver; Austin, Tex.; and Kansas City, Mo.

Lunch business is up “significantly” in Salt Lake City at the six high-volume seafood restaurants run by Gastronomy, including its Market Street Grill and New Yorker concepts, partner Tom Guinney said. He credits the Gastronomy group’s appeal to value-oriented and time-pressed customers. Lunch checks run between $12 and $15, reflecting the popularity of $10 specials that include soup or salad.

Gastronomy’s three downtown Salt Lake City restaurants always have attracted state government officials and lobbyists. Now that lobbyists are limited to spending $50 per person on meals for entertainment, they’re drawn more to lunch, Guinney said.

However, restaurants in Charlotte, N.C., are faring comparatively worse these days, reflecting fears about potential white-collar job layoffs from Wachovia Corp.’s planned merger with Wells Fargo, said Tom Sasser, president of 12-unit Harper’s Restaurants. Wachovia employs about 20,000 people in Charlotte, which also has reeled from gas shortage panics following the Gulf Coast hurricanes.

Lunch sales are down about 10 percent at Harper’s restaurants, said Sasser, who called customers’ increased price-consciousness “a new phenomenon.”

“It’s scary for folks around here,” he said.

Harper’s is offering prix-fixe menus in its more upscale restaurants and is featuring off-price specials in more casual ones that might include a beverage or a salad with an entrée at no extra charge.

Offering side dishes with entrées has been a matter of course for some. In Louisville, Ky., business is holding steady for the five Bristol Bar & Grille restaurants, where lunch checks average $15 and entrées include side dishes, said Scott Harper, managing partner and beverage director. The ability to serve people in just 30 minutes also has worked to Bristol’s advantage, he said.

About 15 percent of lunch customers order a glass of wine since Harper began pricing wines using retail-price-based markups. That’s especially so on Fridays, he added.

Business catering is possibly the only lunch component that has slipped at Jasper’s in Dallas, said chef-partner Kent Rathbun. Otherwise, business has held steady, with checks averaging about $17 or $18. Like many of his peers around the country, Rathbun has observed more business entertaining taking place at lunch than at dinner.

“People may not be buying that Porsche or a big house, but they still go out and eat,” Rathbun said.

The daily business lunch special for $14 is a popular perceived value for “a nice plate of food” that may include prime rib enchiladas or crabmeat chiles rellenos.

Meanwhile, fine-dining restaurants are finding lunch to be “a challenging meal period overall,” said Pete Sittnick, managing partner of Pat Kuleto’s restaurants in San Francisco. He estimated that lunch is down between 5 percent and 10 percent at the group’s four restaurants, whose lunch checks average about $35 per person.

He blamed the slowdown on apprehension and budget cutbacks in the business community, and said his company’s defensive strategy is to personalize the guest experience with a focus on pleasing repeat customers.

Depending on location, social occasions continue to be celebrated at lunch at high-end restaurants such as Lake Park Bistro in Milwaukee, close to that city’s affluent North Shore. The bistro typically does about 130 covers at an average of $16 per person, said Joe Bartolotta, owner of The Bartolotta Restaurant Group. Daytime customers primarily are social groups, retirees and “ladies who lunch,” he said.

Bartolotta stopped serving lunch at his fine-dining restaurant Bacchus downtown in June after a three-year run when lunch covers dropped to as few as 30 per day.

“It wasn’t cost-effective to stay open for 30 to 40 people,” he said. “People’s dining habits are different than they used to be. They’re eating at their desks or grabbing something and have a $10 threshold.”

For instance, more employees of a large insurance company next door to Bacchus began eating in-house at a subsidized employee-dining program, he added.

Although many office buildings in Milwaukee and elsewhere have lobby kiosks from which tenants can pick up sandwiches or salads for lunch, some casual full-service restaurants in that city are holding their own.

“Bars and pubs are sort of bullet-proof,” Bartolotta said.

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