Jump to content

Restaurateurs Face Higher Costs, Fewer Diners


Joe H

Recommended Posts

This is a depressing thread so I'll inject a little "silver lining": At least when we go out and dine (that is those who can afford to), we can think of it as pump priming rather than self-indulgence.<_<

Same here. Mr. MV and I (plus one dog :rolleyes: ) enjoyed dinner al fresco at Chadwick's (Old Town) on Friday and it was hopping. The area just seemed to be coming alive again.

Link to comment
Share on other sites

About a month ago, my broker asked me how the lifestyle of my acquaintances had changed since the economic downturn. I asked around but nobody seemed to understand the question.

One friend gave me a lecture on macroeconomics and the greediness of the financial community.

Another said he had stopped using credit cards because he doesn't like the interest rates. When I pointed out that there is no interest if you pay promptly, he said he doesn't care, he just doesn't like the rates.

Another (she will recognize herself here) said she likes bargains. When I asked her if that means she'd changed, or adjusted, in some way, she said no.

Finally, I got a real answer, though I can't believe it's typical of the community at large. One well-to-do friend said he had changed his landscaping contract from five visits a year to four. Thank you -- at last -- for a real answer! I told him I understood how he had earned his summa cum laude degree -- he responds to questions.

But the consensus from top to bottom seems to be that people haven't thought about it much in terms of their personal behavior, or, perhaps, they're unwilling to address the subject in conversation.

Link to comment
Share on other sites

Well, I know I have adjusted my spending habits in many ways. I won't share all of them here, but one way that I have cut back is that I have purchase not a single bottle of wine off of a mailer since Spring 2008. It's killing me, but I've stuck with the plan so far.

Link to comment
Share on other sites

Assuming you are securely employed, the best that you can do is spend like you have in the past. Spending generally would help bouy the economy.

The problem with a poor economy is that people stop feeling securely employed, especially when we keep hearing about job cuts in the press, etc. A self-fulfilling circle... People hear about job cuts so they cut spending to prepare if they get cut, which causes overall spending to go down, which causes job cuts.

I've fallen into this myself as well. I'm saving more, though that's partially because the stock market is so low right now that as long as I'm fine with keeping the money in for 4-5 years that it presents a good investment I believe. We've also started recently to take wine with us to restaurants and use corkage. Not sure if that's really a economy thing though or the fact that I have too much wine at home... Guess it works out on both ends. Realistically though we end up paying corkage (which isn't all the expensive at all where I live now) plus we get a round or so of pre-dinner drinks so we still end up spending a decent amount to help out the restaurants :rolleyes:

Link to comment
Share on other sites

Swine producers are seeing a reduction of sales because of fear of swine flu (or "grippe

porcine", as I prefer). We can help revive the slumping economy by eating more bacon.

A half remembered quote from a spokesperson of the American Livestock Breeds Conservancy

"the only way to save endangered livestock breeds is to eat them"

(no, not all of them ... buying some will encourage farmers to raise more).

Wine producers need for us to drink more (a little tiny bit more).

Yes, it's a plan. Might even work. I'm willing to try.

Link to comment
Share on other sites

But the consensus from top to bottom seems to be that people haven't thought about it much in terms of their personal behavior, or, perhaps, they're unwilling to address the subject in conversation.
Your friends are very lucky or very shy around you.

Many of my friends have lost their jobs and/or had their salaries cut extensively. Many of those still employed are suffering from both survivor's guilt and fear. Those who are slow are taking voluntary furloughs (that they can't afford), and those who are not are working harder than ever to prevent those are are slow from losing their jobs. People are trying to save, but it is much harder because their salaries are less. They are not eating out. They are not spending. They are moving in with parents after years of living alone. On the other hand, others are taking advantage of the opportunity to reflect, realizing that they have been working for more money instead of happiness and are making changes. Not all is bad. But, it is much different.

If you have the money, by all means please spend it, but it is sometimes good to acknowledge that spending really isn't an option for everyone (such as the landscaper who was likely just making ends meet before he had his earning cut by at least 20%).

Link to comment
Share on other sites

On 4/9/2008 at 0:25 PM, Joe H said:

In my industry business has slowed down dramatically just in the past several months. Generally, I sell construction projects which can have a lead time of one to three years or more. Yet, in this environment financing is much more difficult to come by and for the companies who have already received financial commitments, many of them are taking a wait and see approach to the coming season. I'm wondering if the restaurant industry is seeing significant slowdowns? My guess is, yes. I'm also guessing that this all started about two or three months ago.

Last week I was in Germany (Munich, Cologne, Hamburg and Italy (Verona, Milan) for eight days. Hotels were empty yet many German factories are running near capacity.

For those who are interested this is the greatest real estate bubble on earth:

http://www.cbsnews.com/stories/2007/10/12/...753_page3.shtml

"It's easy to laugh about it now. The palm island project sold out in less than a week, and houses that initially went for $1 million are being resold by original investors and real estate speculators for five times that. But the day 60 Minutes went ashore, a month after the official opening, the island was a ghost town.

"People just started moving in," Sultan Bin Sulayem explains."

_______________________

I have friends who live in Dubai and tell me that Palm Island has no one living there. 100% speculation. Also, the vast majority of condos are coming on line right now, almost all speculation.

_______________________

This thread was started about 5 months after the Great Recession started, and about 14 months before it ended - looking back, there is no question that we had entered into a bubble in late 2007.

And I believe we've been in a second bubble during the past 2-3 years as well (which is already beginning to collapse, or certainly shrink - anyone who thinks otherwise should take a long look at the incredible piece of work that cheezepowder has done - yes, she's only one person, and no, she can't possibly account for every restaurant, but this is the best list out there, and a definite trend has been in place for quite awhile now). The recovery brought enormous supply into Washington, DC - much of it untrained and unfit to work in restaurants, and right now I'm very worried about that supply (and I'm talking about restaurant employees). The last time I said this was about 5-6 years ago, but I'm going to start saying it again: If you're in a stable, safe job, think *long and hard* before giving it up right now. And make doubly, triply sure that it's actually stable and safe.

I'm not even going to go into how quickly housing prices rebounded after the "worst economic disaster since the Great Depression" (not my words).

"A 10-Year History of DC's Housing Market in One Chart" by Jeff Clabaugh on wtop.com

I'm pretty sure a 15-year or a 20-year chart would look a lot more worrisome, as housing was going up by double-digits for several years in a row before it peaked in 2007.

  • Like 1
Link to comment
Share on other sites

I agree DC does have a bit of a bubble at the moment in restaurants and housing. For example, when you drive on 395 south of the Capitol near the water all you can see these days are high rise condo buildings and restaurants also seem to have a glut of the same caliber lack of interesting character. I wonder if the growth in DC proper will continue at this level during the current presidential term. 

Link to comment
Share on other sites

On 2/25/2017 at 10:42 PM, lion said:

I agree DC does have a bit of a bubble at the moment in restaurants and housing. For example, when you drive on 395 south of the Capitol near the water all you can see these days are high rise condo buildings and restaurants also seem to have a glut of the same caliber lack of interesting character. I wonder if the growth in DC proper will continue at this level during the current presidential term. 

It's still continuing, IMHO. But I think it is possible that it is slowing down....a little. I mean, how many millennials and baby boomers are still moving in to the city (and staying?), and more importantly, how long will that trend last? Particularly, it'll be interesting to see the Millennial generation and what they do as they all start having kids - stay in urban areas, or shift to suburban? Millennials are now age 23 to 38 - in prime home-buying and start-a-family modes, even by delayed standards (and aversion to debt and permanency). And, as the Millennials age, their desire to pay for $20 cocktails regularly may wane as they decide to start families. And not sure Baby Boomers (age range = 54 to 72) will fill in that gap, spending their retirement dollars to order those same $20 cocktails.

While DC became red-hot in the apartments and condos zone, the current DC population has risen from 601,00 in the 2010 census to an estimated population of 693,000 - the highest point since the 1970s. But I think it is a matter of time before we hit an upper limit for need of more condos and apartments. I could be wrong, because the building continues in other close in urban areas (I see it all over Ballston, for example). And the roll-out of houses, townhouses, condos and apartments in the suburbs that continues, does so, IMO, at a more slow, deliberate pace.

A good example is the Konterra development on both sides of 95 in the Laurel, MD area betweent DM-200 (the ICC) and Route 198.  Some apartments have gone in recently. Most of the houses and townhouses from the last of the 2000s wave finished in the late 2000s. Much of the new houses have gone in first in the Montgomery County section of what is the total footprint of the Konterra development. But there are vast tracts of land that go untouched, and will probably stay untouched until the developers are sure they have strong interest and can sell through newly created inventory.

It is fascinating to watch.

Link to comment
Share on other sites

I disagree with the statement that DC has a bubble for housing. Regardless of what may be seen when driving on 395 (which I assuming is Navy Yard), the real estate market is more complex than what “looks like overbuilding”.

The reason condos and apartments continue to be built is because developers are doing their homework and watching the market (and banks are not taking on the same level of risk pre-2007). It’s foolish to think they would spend upwards of $100M on a new residential building with a “if you build it they will come” mentality.

Millennials may be growing old, however, they have also adapted to an urban lifestyle of live smaller, use less, walk to work. And while some of them may decide to move to the suburbs to pursue what some would consider an old fashioned perception of the American dream, plenty are content with or would rather raise their children in the city. With regards to the comment of them “spending their retirement dollars to order those same $20 cocktails” you may forget that the area median income or AMI in DC is $110k for a family of four… That’s right, almost double the national AMI of $59k. Furthermore, comments like that show how little Baby Boomers actually know about the lifestyle of Millennials which spend less annually on food, apparel, and housing than ANY previous generation… Why do you think that is? Feel free to look for yourself here: https://www.bls.gov/opub/mlr/2018/article/fun-facts-about-millennials.htm

Lastly without delving into the microeconomics of job growth, housing vacancy vs construction trends, level of education, etc… DC has earned itself a spot on the list of international power cities such as NYC, LA, London, Paris, Singapore to name a few.This will not be changing anytime soon. The trend of international investment in American real estate is staggering. 

  • Like 1
Link to comment
Share on other sites

2 hours ago, Pool Boy said:

A good example is the Konterra development on both sides of 95 in the Laurel, MD area betweent DM-200 (the ICC) and Route 198.  Some apartments have gone in recently. Most of the houses and townhouses from the last of the 2000s wave finished in the late 2000s. Much of the new houses have gone in first in the Montgomery County section of what is the total footprint of the Konterra development. But there are vast tracts of land that go untouched, and will probably stay untouched until the developers are sure they have strong interest and can sell through newly created inventory.

It is fascinating to watch.

Although current literature on Konterra doesn’t reference this I’m quite positive  partnership members owned much of or the bulk of the land in Laurel as far back as the early 1980’s.  I did some work with the Gould family business then and recall development boards of the plans that far back.

 One other recollection: The late  Kingdon Gould Jr was the head of the business then.  He has a distinguished history.  He was possibly in his late 50’s or early 60’s.   He was in great shape.  I thought I was in great shape then, working out aerobically all the time.  But noooo.....

Kingdon Gould used to bound up the stairs to his office at the time, maybe 6, 8 floors up.  I’d be following him, my thighs burning and at the end huffing and puffing.  

“Who is this guy????”  I believe he was rated among the best squash players in America at the time (maybe in his age bracket). 

Any time I see Konterra mentioned I think of those damned stairs and trying to fake it that I was in as good shape as Mr Gould.    

They owned the ground back in the early 1980’s if not earlier.  They are still developing the project with much more capacity.   That is the definition of patient money.

  • Like 1
Link to comment
Share on other sites

On 5/12/2018 at 4:25 PM, susan said:

I disagree with the statement that DC has a bubble for housing. Regardless of what may be seen when driving on 395 (which I assuming is Navy Yard), the real estate market is more complex than what “looks like overbuilding”.

The reason condos and apartments continue to be built is because developers are doing their homework and watching the market (and banks are not taking on the same level of risk pre-2007). It’s foolish to think they would spend upwards of $100M on a new residential building with a “if you build it they will come” mentality.

Millennials may be growing old, however, they have also adapted to an urban lifestyle of live smaller, use less, walk to work. And while some of them may decide to move to the suburbs to pursue what some would consider an old fashioned perception of the American dream, plenty are content with or would rather raise their children in the city. With regards to the comment of them “spending their retirement dollars to order those same $20 cocktails” you may forget that the area median income or AMI in DC is $110k for a family of four… That’s right, almost double the national AMI of $59k. Furthermore, comments like that show how little Baby Boomers actually know about the lifestyle of Millennials which spend less annually on food, apparel, and housing than ANY previous generation… Why do you think that is? Feel free to look for yourself here: https://www.bls.gov/opub/mlr/2018/article/fun-facts-about-millennials.htm

Lastly without delving into the microeconomics of job growth, housing vacancy vs construction trends, level of education, etc… DC has earned itself a spot on the list of international power cities such as NYC, LA, London, Paris, Singapore to name a few.This will not be changing anytime soon. The trend of international investment in American real estate is staggering. 

Point 1/21 - I am sure they are doing their homework. But, at least for apartment buildings (not condos), even with homework, you are, in essence, building it and hoping they will come? Sorry but had to be a little cheeky here. :)

Point 3 - Entirely possible - that said, the jury is out until the kids hit school age. That is usually when the parents decide that they can either afford private schools in order to stay in the city, or instead go to where the best public schools are if they cannot afford i (or do not want to, say, for instead saving for college for the kid).

Point 4/5 - I think you misread my point. I was suggesting that millennials may, as they start to have families, buy housing, etc, their tolerance for paying for $20 cocktails might wane. And probably not disappear, it would depend at what stage a millennial the person is and so on. I followed that suggestion that, anticipating someone might say 'Hey Boomers will fill that gap easy!'for buying $20 cocktails. I am sure many could afford it given their social security, 401k, and government pensions. But.....would they? I sure would, but I am not sure what percent of Boomers would. Some may move to the city, for convenience and access, but inertia often means you stay where you know unless you've long had a plan for something different.  I honestly do not know what the average retired person in the DC area's yearly income is. If both members of a couple worked, I think they'd make $4-5K/month off of social security. Minimum required 401k distributions would likely by in the $1-2K/year range at least but possibly (much?) higher. Pensions are unlikely except for ex-Feds most likely.

Point 6/7 - I agree.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...