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Tabled Expectations : Restaurants: Mid-price establishments, which saw growth through much of the '80s, are seeing business slow with the recession.

January 09, 1991|ANNE MICHAUD | SPECIAL TO THE TIMES

ANAHEIM — On Saturday, Susan Roos called a meeting of employees at the Bessie Walls restaurant to serve up some bad news.

Business was slow, she told them, and the restaurant was going to cut costs by reducing some waiters, cooks and other staff members to two shifts a week, down from four or five.

"It worries us as managers," Roos said of the situation as she surveyed a dining room that had once been the master bedroom of the former Walls mansion in Anaheim. "Already, two of my best servers told me they might leave."

Restaurants across the country are feeling the effects of a slowing economy. In Orange County, it could spell trouble for some of the 5,258 eating and drinking establishments that depend on local residents' going out on the town. The average Orange County resident spends more on dining out than the average resident of any other county in the state except San Francisco.

Increasingly, however, more consumers are opting for cheaper alternatives, such as fast food or home cooking. Already, independent restaurants are feeling the pinch, particularly those in the medium-price range, where the typical tab for one person is around $25 for dinner and might be as much as $15 for lunch.

The local scene is a mirror of the national, according to the National Restaurant Assn., which is based in Washington. The association estimates that table-service restaurants, which saw their sales rise through most of the 1980s, lost sales in 1990 and it is projecting a flat 1991.

"The glory days of the 1980s are over," said Michael E. Hurst, association president. In the 1980s, people had more money and less time, partly because of the number of two-income households, so they began to eat out more. But now, Hurst said, "the economy is headed into a recession, and wary consumers are holding onto their money."

Mid-price restaurants tend to be hurt more than others in a weak economy because their customers are more likely to look for less costly alternatives, restaurant experts said.

Family-style and fast-food restaurants will still appeal to the cost-conscious, and the fanciest restaurants generally have clienteles that are less likely to have to pinch pennies in a recession.

In Orange County, white-collar unemployment is hurting the restaurant trade, said Forrest Hunt, who follows the restaurant business for the Deloitte & Touche accounting firm in Irvine. "Certainly, the Orange County restaurant market has grown up to service that type of a customer, and to the extent that consumer is no longer employed, it's going to hurt," he said.

Hunt said there are likely to be failures within the next six months among smaller operators who do not have the financial flexibility of a chain such as El Torito Restaurants or Benihana of Tokyo. "Restaurants in Orange County have been in intense competition for five years. Overlay difficult economic times on that, and I'd say there's a real possibility you'll see some failures," he said.

"In this type of situation, the higher-scale restaurants are going to boom," predicted Pascal Olhats, owner of Pascal French Provencal) Cuisine in Newport Beach. Olhats said business at his restaurant, where the entrees range from $18 to $22, has been growing each month since September.

He said most of his customers are business executives and their families and international travelers who appreciate French cuisine.

"In a tough time, people want to make themselves happy," he said, "so they will spend money for the best."

Some owners of mid-price restaurants say they have been introducing lower-price menu items to help them through the poor economy.

Bobby McGee's Conglomeration restaurant in Newport Beach, for example, added an $8.95 prime rib dinner to its menu last weekend. Other meat dishes there are between $9.95 to $16.95.

Customers are also drinking less alcohol, which is hurting overall sales. A 1989 National Restaurant Assn. survey found that 54% of adults were consuming alcoholic beverages at restaurants, compared to 61% in 1987.

The sluggishness in the industry can also make eating out for those who still are less pleasant. Max Jacobson, an Alhambra free-lance writer who reviews restaurants for The Times, said he went to two usually crowded restaurants one recent Thursday night--one near the Performing Arts Center in Costa Mesa and another in Laguna Beach--and found no customers at either one.

"It is really bad out there," Jacobson said. "I like to eat in a dining room with a lot of people in it. There's theater there, excitement. Even if the food is good, it's a drag to eat in an empty restaurant."

Restaurants are also cutting back on their advertising. In November, The Times was averaging between five and six pages of display advertisements for Orange County restaurants, said John Christ, restaurant salesman for the Times Orange County Edition. This month, the advertising is down to three pages. Christ said the fluctuation is not seasonal but rather a sign of the weaker economy.

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