Seafood restaurant sales largely in the tank

"Everything's gone up some, but it seems like if we go to a seafood restaurant, a family of five ends up spending $70 or $80 just to go out to dinner," said Lube, 37, a Maitland stay-at-home mom.

Seafood restaurants have faced rough waters during the past two years, even as other eateries are attracting more customers in the recovering economy.

Prices for basics such as salmon, shrimp and crab have been rising. A relatively high percentage of consumers don't care for fish at all, and there are residual worries left over from last year's massive oil spill in the Gulf of Mexico.

Meanwhile, the struggling economy has claimed several restaurants, including Straub's in Orlando, most of the Shells chain and The Surf Bar & Grill in Cocoa Beach.

In general, "the seafood category … has been in contraction mode, losing sales and shedding units," said a report last month from research firm Technomic. In 2009, the report said sales at America's largest seafood chains declined 5.2 percent compared with 2008 — much more than the 0.8 percent decrease at major restaurants overall.

The effect has been noticeable at major Central Florida restaurant companies.

Mitchell's Fish Market, owned by Lake Mary based Ruth's Hospitality Group, saw its sales drop 2.1 percent at established restaurants while business spiked 9.2 percent at its sister brand, Ruth's Chris Steak House.

Sales at Red Lobster, owned by Orlando-based Darden Restaurants and the world's largest casual-dining seafood chain, fell by 1.6 percent in the last quarter at its established restaurants, continuing a trend that has gone on throughout most of the economic downturn.

Disease on fish farms and increased fishing restrictions in the U.S. Pacific Northwest have sent salmon prices higher. Lowered crab quotas in Russia and Canada and lower-than-normal production of shrimp on farms were noted by Darden Restaurants this month when telling analysts it expects an 11 percent jump in its seafood costs during the next 18 months.

"We've really been getting killed with prices," said Tony Porcellini, who oversees food and beverage at Walt Disney World Swan and Dolphin restaurants, including Todd English's bluezoo.

Shrimp has become especially expensive — about 25 percent more than last year, Porcellini said. So bluezoo removed a grilled-shrimp entrée from the menu, cut back on other more expensive ingredients and raised prices on a few entrees.

The weakened U.S. dollar helped send shrimp prices higher, since most of it is imported, analysts say. Last year's BP oil spill in the Gulf of Mexico also limited supplies of shrimp and oysters.

But much of the oil spill's effect was on customers themselves.

Seventy percent of consumers polled nationwide said they still feel concerned about safety of fish from the Gulf, according to a survey released last month by the Louisiana Seafood Promotion and Marketing Board. About 20 percent said they were eating less seafood in general as a result of the spill, according to Technomic's study.

Both surveys polled people late last year, but "we know we have a two- to three-year challenge at least," said Ewell Smith, executive director of the Louisiana seafood-promotion group.

The federal government says seafood from the Gulf is safe.

But Tonda Corrente Nazario, 36, who manages a wine and cheese bar in Kissimmee, is among those consumers who remain suspicious of it.

"Why would you want to buy anything out of the Gulf?" she said. "I think for hundreds of years it's going to be nasty."

At Hull's Seafood, a fish market and restaurant in Ormond Beach, "you have to explain to them that it's safe," owner Jimmy Hull said. "The Florida seafood brand has been tarnished by the BP oil spill, no doubt about it."

Even with all their challenges, seafood restaurants are about to get a little more competition. Ruby Tuesday this year plans to open a seafood chain, starting in its corporate backyard of Maryville, Tenn.

Such restaurants still hold promise, especially as society focuses more on eating healthy, said Steve West, a restaurant-industry analyst for Stifel Nicolaus. Keeping costs low enough will continue to be a challenge, he said.

"How are you going to allow lower-end consumers to get a quality piece of fish?'' West asked.