Adele Cabot and her husband used to dine out three or four times a week, regularly spending $75 to $100 at a sushi bar sampling rainbow rolls and yellowtail nigiri sushi.
But that changed after Cabot, an adjunct professor of theater at UCLA, had to take a 6% salary cut. The couple now eat out half as much and frequent less expensive Mexican and Italian places.
"I just don't want to spend the money to eat out a lot," Cabot said.
With Thanksgiving this week and Christmas next month, restaurants are eager to win back customers such as Cabot who seemed to disappear amid a brutal summer for the nation's eateries.
Restaurant owners are worried that tight corporate entertainment budgets, cash-conscious consumers and greater competition from price-cutting supermarkets will make for another dreary Christmas.
The number of people visiting restaurants has plunged for four consecutive quarters, according to NPD Group, a market research firm. Companies as small as Tender Greens, with just three restaurants, and as huge as the Denny's chain are braced for another difficult year.
"Until the economy gets through these unemployment and foreclosure issues, we are going to have a tough time," said Nelson Marchioli, chief executive of Denny's Corp. of Spartanburg, S.C. "The economy has really put our customers in a tough position."
Marchioli is talking about people such as Harry Browne of Mount Washington. Browne lost his job in information technology and won't be buying anything more than "a value meal from a fast-food restaurant" these holidays. "I am on my last extension of unemployment benefits, so I have to really watch my spending," he said.
To reach those consumers, Denny's plans a television advertising blitz during key NFL and college football games as well as the Macy's Thanksgiving Day parade.
It isn't only mid-priced family restaurants that people are avoiding. Upscale chains such as McCormick & Schmick's, the seafood house, and Morton's, the steak purveyor, saw same-store sales, or sales at restaurants open at least a year, fall 18.8% and 16.8%, respectively, in the third quarter compared with a year earlier, according to Bellwether Food Group, a food industry consulting firm.
Bellwether doesn't project an industry rebound to pre- recession levels until 2012.
The recession has taught consumers to eat out less often and to order less -- skipping alcoholic beverages, appetizers and desserts -- when they do, Bellwether said.
