Economy forces upscale operators to rethink definition of finer dining – Nation’s Restaurant News

By ELISSA  ELAN

(June  15, 2009) With the recession still
gripping the country by its purse strings, luxury is out, value is in and fine
dining is facing the daunting task of redefining itself.

Most fine-dining operators agree that the segment is not in
jeopardy of disappearing entirely, but a shakeout is underway. Many fine-dining
eateries are closing their doors, and those operators trying to stay viable have
ramped up their efforts to casualize while still maintaining some of the upscale
elements that make fine dining, well, fine.

“Special occasions still exist, and people are still going out;
they’re just looking to pay a lower price for it,” said Adam Werner of
Southland, Mich.-based consulting firm AlixPartners LLC. “Our expectation is
that there is going to be a shift in consumer spending at large, so these
companies need to figure out how to do more with less. There definitely are some
learning moments here.”

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Lever House, a fine-dining establishment in New York City, is one of several high-end restaurants to close there in the past few months.

Such economic factors as weakened tourism, tightened corporate
budgets and recession-weary consumers are not only contributing to that
education, but also forcing several upscale eateries to shutter.

In the past two months, such New York fine-dining establishments
as Ago, Atria and Lever House have closed. In Boston, diners are saying goodbye
to Aujourd’hui, Great Bay and Icarus. And in Philadelphia, fine-dining stalwart
Susana Foo Chinese Cuisine has turned off its lights.

The contraction within the segment is not altogether unexpected as
the pool of potential diners declines, observers say. Nor does it mean that fine
dining is dead. Instead, fine dining is in the throes of a sea change as it
reinvents itself for the future, they say.

Werner of AlixPartners said he expects many in the fine-dining
segment to step up their use of coupons and renegotiate contracts with
suppliers, distributors and landlords.

Still, the desire for great food and service will never change—no
matter how bad the economy gets, said Paul Bolles-Beaven, president of core
business for New York’s Union
Square Hospitality Group, operator of such upscale concepts as href="http://www.gramercytavern.com/" target=" _blank">Gramercy Tavern, href="http://www.elevenmadisonpark.com/" target=" _blank">Eleven Madison
Park, Tabla, href="http://www.themodernnyc.com/" target=" _blank">the Modern and href="http://www.unionsquarecafe.com/" target=" _blank">Union Square
Café.

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Christopher Myers is the co-owner of Boston’s Radius restaurant and the now-shuttered Great Bay.

“I do think people are responding to the opportunity to spend less
money and experience something wonderful at a lesser price point, but it’s an
oversimplification to say that everything will become less formal or that the
portions will start getting larger,” he said. “Fine dining is in the eye of the
user, but the idea that the economy will ring the death knell for it is not
true.

“Maybe it’s true that people are thinking more carefully about
spending money, but the people who care about [enjoying] the highest level of
the culinary experience will always seek it out.”

A poor location was the primary problem the fine-dining seafood
restaurant Great Bay faced, said co-owner Christopher Myers. Myers and partner
chef Michael Schl?w also own target=" _blank">Radius, a power-house of Boston’s fine-dining scene.

Great Bay, which opened in the Hotel Commonwealth in Kenmore
Square in 2003, was located in a transitional neighborhood that wasn’t ready for
an upscale restaurant at the time of its debut, Myers said. Although it never
really caught on with area diners, the recession pushed it toward its eventual
demise, he said.

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Great Bay, a fine-dining eatery in Boston, recently closed in part because it was an expensive restaurant in a neighborhood that couldn’t support it, said co-owner Christopher Myers.

“Kenmore Square was the only blighted neighborhood in what Boston
considers the Back Bay,” he said. “It was a relatively expensive restaurant in a
neighborhood that was not ready for it then, but is now. And directly across the
street was a construction site. You just don’t get over that if you are
appealing to the smallest percentage of diners. I don’t think the economy is the
reason for the closing, but we certainly didn’t have a great deal of momentum
going, so when the economy bombed out we were susceptible. The transitional
economy definitely was the tipping point.”

Despite his experience with Great Bay, Myers said he is not
deterred from opening other fine-dining restaurants. He noted, however, “I think
the rules of the game will change.”

Myers said he anticipates more downscaled fine-dining restaurant
designs and lower prices—at least until the economy improves—as well as a more
relaxed use of high-quality ingredients in order to maintain costs.

“It’s funny,” he said. “I was reading this article by a blogger in
Boston who said that fine dining was going to go the way of the dinosaurs. But I
don’t believe that’s true or has to be true.

“Maybe the atmosphere will be three-star even though the food is
four-star,” he continued. “It’s sad, but the big, showier restaurants might be
fewer and far between. You may see more generic dining for a while, but by no
means do I think fine dining will disappear.”

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Drew Nieporent operates several fine-dining New York eateries through Myriad Restaurant Group.

Drew Nieporent, co-founder of New York’s href="http://myriadrestaurantgroup.com/" target=" _blank">Myriad Restaurant
Group, owner-operator of such up-scale establishments as href="http://www.cortonnyc.com/" target=" _blank">Corton, href="http://www.noburestaurants.com/" target=" _blank">Nobu, href="http://www.myriadrestaurantgroup.com/tribecagrill/index.html"
target=" _blank">Tribeca Grill, href="http://myriadrestaurantgroup.com/maihouse/index.html" target=" _blank">Mai
House and target=" _blank">Centrico, agrees that fine dining isn’t going anywhere.

“All of us in the foodservice business feel there is some sort of
place for fine dining, but we also pioneered the casualization of it,” Nieporent
said. “That doesn’t mean we want it to go extinct, but we have relaxed the rules
to where dress codes or a pretentious experience have disappeared.”

Nieporent added that although consumers are demanding more casual
comfort when dining out, they still want to savor the special occasion that is
associated with fine dining.

“At the end of the day, people want to experience eating with the
best china and glassware and have the best food available,” he said. “Along with
fine dining comes the expense of the service and those who are executing the
food. Maybe it becomes a much smaller market. There’s going to be a shakeout.
That’s the nature of competition, especially in a busy marketplace like New
York.”—target=" _blank">eelan@nrn.com