Saturday, August 01, 2009

Restaurants in New York City are experiencing a resurgence in traffic this summer

The summer months are usually the worst for the city's restaurants as New Yorkers head to the beach, business meetings are put on hold and the Big Apple simply slooows.

But this year is different. The summer seems to be ushering in a period of growth. “The mood is getting back to normal,” says Dean Poll, president of the Boathouse restaurant in Central Park. “It seems like things have finally stabilized.”

Restaurants are fuller than they have been since the recession touched down last October. For some, June and July brought the first glimmers of an economic recovery as they fed more customers than they had during the same months last year. Others, whose sales are still down, report that at least year-over-year declines are shrinking as each month passes.

There are numerous reasons for the resurgence, including theories about New Yorkers being fed up with depriving themselves or simply feeling more confident about their job security.

According to the Conference Board's consumer confidence index, June was at 49.3, or nearly twice March's figure. “Consumers seem to be paying more attention to where we are going rather than where we've been,” says Ken Goldstein, an economist with the Conference Board.

The first 19 days of July were especially bountiful for the Boat-house, which reports a 22% spike in sales over the same period last year. It helped that early-summer rains let up in July, allowing diners to enjoy the eatery's outdoor seating, Mr. Poll says.

Neighborhood restaurants are faring particularly well. For example, both revenue and customer counts at Compass, in the heart of the Upper West Side's residential community, are up 12% since June. Donny Evans, managing director of Compass, believes more New Yorkers are staying in town because of the unusually rainy, cool weather. He also credits an advertising campaign—touting a $39 three-course dinner with a three-pound lobster—with driving more business.

“Summertime is always terrible in Manhattan,” Mr. Evans says. “So we are pleasantly surprised that we are up strongly.”

Restaurant Week, which began July 12 and ends Aug. 2, is also helping. The citywide promotion has made a big difference for A Voce in Gramercy Park, which went from 70 lunchtime covers (restaurant lingo for the number of customers served) to between 120 and 178 since the promotion began, says Frederic Serol, director of operations. A new bar menu, initiated in June, has been a draw as well.

But it's not just discounts drawing customers. Their appetite for the newest, most ambitious restaurants in town is returning. Charlie Palmer's Aureole reopened in its new digs on West 42nd Street on June 29, and the place has been packed ever since—despite $130 per person dinner tabs.

“We thought we could ease into the opening,” says the executive chef, Christopher Lee. “But we are doing 30% [more business] than we had expected.”

The upscale eatery, which famously operated in an Upper East Side townhouse for 20 years, is offering a 15% discount on diners' total bills until Sept. 15.
Even if Aureole is benefiting from rebirth buzz, New Yorkers' excitement about a fine dining restaurant opening cannot be dismissed. “There is no question that we have moved away from that absolute tight-belt household budgeting,” says economist Mr. Goldstein.

Even so, restaurants that rely on power lunches and corporate events, such as steakhouses or eateries located in the heart of Midtown, say spending remains weak.

“We are basically serving the same number of diners as last year,” says Matthew Glazier, who co-owns two steakhouses in Manhattan. “But we are seeing softness in their spending.” Revenues at Mr. Glazier's Strip House are off 5% this month from a year ago, he says.

Similarly, Beacon's revenues were down about 4% in June and July compared with last year, as chef and owner Waldy Malouf eliminated some of the priciest items on the menu—those over $30—and added less expensive dishes.

But even Mr. Malouf says the trend is moving in the right direction for his midtown business: “In March, April and May, we were off as much as 20%.”

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