NEW YORK (Reuters Life!) - Restaurants and wine importers are feeling the squeeze of the belt tightening on Wall Street but are optimistic they can ride out the storm caused by the worst financial crisis since the 1920s.
“Everyone is feeling the pinch,” said Todd Richman, an area manager at wine importer Frederick Wildman & Sons, Ltd. “But people are still going out to eat and drink.”
Restaurants across the country have already experienced the spending pullback, although not equally.
Total restaurant spending fell 0.7 percent in September from August. Full service restaurants took the biggest hit with a 1.1 percent drop in sales last month, while fast-food eateries posted a smaller 0.7 percent decline, according to SpendingPulse, a retail data service of MasterCard Advisors.
Prospects of any immediate relief look dim as consumers say they plan to curb spending by eating out less and in cheaper restaurants. Nearly 40 percent of the more than 38,000 people questioned in a Zagat survey said they will cook more at home and if they do eat out it will be at more economical eateries.
Chef Anita Lo, who co-owns three restaurants in New York, sees tough times ahead.
“There could be a lot of closings this year. A lot of people will think twice about investing in restaurants,” she said at the New York City Wine and Food Festival, which made its debut earlier this month.
Wine flowed freely at the event and food purveyors and vintners are hoping that the passion seen among the thousands who attended the four-day festival will not dim as prospects of a deep recession intensify.
So far Lo’s top-end eatery Annisa and the city’s other high-end restaurants have escaped the economic squeeze.
“The luxury market has not been affected yet,” said Eric Ripert of Le Bernandin, where the tasting menu could cost $325 a person.
Some food businesses had the foresight to prepare for the current downturn.
“We didn’t get over-leveraged,” said Timothy Moley, who founded Chocolove, a premium chocolate maker based in Boulder, Colorado. “We are picking safer projects with low risk.”
Moley launched a smaller version of its popular chocolate bars, which did not require investment in new equipments.
Keeping indulgences like chocolate and wines affordable could be critical for sustaining sales in difficult times.
Rather than expensive vintages, Frederick Wildman showcased moderately priced Argentinean and Italian wines, which on average cost about $9 to $15 a bottle, at the food and wine festival.
“I think expensive wines are having a hard-go lately,” Richman explained in an interview. “Customers are being very selective.”
Restaurants and food and wine companies are hopeful that even in these budget-tightening times consumers will indulge in their favorite delights.
“When times are rough, people are still looking for a treat,” Chocolove spokeswoman Whitney Sinclair said.
Reporting by Richard Leong; editing by Patricia Reaney