CHICAGO – Pity the poor petit four.
With the price of basic foodstuffs, such as wheat and corn, making restaurant prices rise like a soufflé, consumers are cutting back. In part they're eating out less, but they're also eating less when they go out.
That means treats like the aforementioned bite-size cakes, fancy alcoholic drinks – even french fries – are finding fewer takers.
Since those bypassed items can be some of the most profitable selections on a restaurant menu, operators find themselves in a bit of a pickle.
While many restaurateurs are offering "value-priced" menu options to lure in the budget-minded, they're also longing for the days when consumers could have their cake – and fried onion loaf and frozen daiquiris.
"When cash on hand gets tight, consumers will act to preserve their visit frequency while more aggressively managing their spending" on the meal, explains Hudson Riehle, senior vice president of research and information services for the National Restaurant Association.
Experts say the urge not to splurge is being seen across the dining spectrum – even prompting well-heeled patrons at fine dining establishments to ask for a price break on the prix fixe menu if they forgo the appetizer.
"We almost never used to see that happen," said Jason Weaver, executive chef at the French Room in the Adolphus hotel. "It's not a lot now," he said, but it has happened.
The restaurant association, the industry's largest trade group, will tackle the topic of rising prices and restaurant spending at its annual conference, which begins today at Chicago's McCormick Place.
Doug Brooks, chief executive of Dallas-based Brinker International Inc., which owns four chains, including Chili's Grill & Bar, will give tips for "Surviving the Margin Crunch" at a panel discussion of restaurant executives at the conference today.
Margins – and customers – are being squeezed from all sides, as food prices rise to levels not seen in nearly 20 years and a barrel of oil for heating, gasoline and other uses tops $120.
The April Consumer Price Index for urban consumers was up 3.9 percent over April 2007, the U.S. Bureau of Labor Statistics said Wednesday.
For the 12 months ending in April of this year, energy was up a whopping 15.9 percent compared with the previous 12 months, while food costs gained 5.1 percent, according to the bureau.
Many consumers have tried to compensate by driving past the drive-through lane and fixing more food at home.
For others, "usage of restaurants is intrinsically woven into their sense of their standard of living," Mr. Riehle said. They don't want to give up dining out, but they still need some cash to fill up the gas tank.
Their answer: Check management.
That's the industry term for keeping tabs on the tab by ordering less, or ordering less-expensive items.
"I can feel the pressure" of rising prices, said former Dallas resident Brad Hilton, 41, who was dining with friends Sunday at Maguire's North Dallas on the Dallas Parkway.
"I've been splitting meals with my girlfriend rather than both of us ordering something," added Mr. Hilton, who estimates he eats half of his dinners out, down from 60 percent a few months ago. "It makes sense price-wise and health-wise since you get such big portions."
In the darkened interior of the Capital Grille in Dallas, under the smiling visage of a youthful Lena Horne and the blank stare of a stuffed moose, Cathe Coleman and her daughter Stephani Clark enjoyed a single plate of pan-fried calamari served with hot cherry peppers. The item, selected from the restaurant's appetizer menu, would suffice as the Monday night dinner.
"We try to do a lot of cooking at home," said Ms. Clark, 21, who lives with her mom in the Cedar Crest area of East Oak Cliff. "When we do eat out, we might not eat as much. Or we might get a large entrée and split it, or get a large appetizer."
"This is more than enough," said Ms. Coleman, 57. Plus, she said, "it helps with the budget."
Todd Phillips is executive chef at J.R.'s Steakhouse in Colleyville, where diners come for martinis, live jazz and prime beef.
He, too, is seeing guests order entrées on the buddy system.
"And we see a lot more appetizers being consumed as an entrée and a really big decrease in desserts," he lamented, "probably a 30 percent decline in desserts."
Conserving consumers probably have trimmed about 5 percent from his profits, Mr. Phillips estimates – enough to notice, but not enough to hamper operations.
He's probably not the only one with a pinched bottom line, according to Bonnie Riggs, an analyst with the NPD Group who recently completed a report on downturn's impact on restaurants. The NPD Group is a consumer research company based in Port Washington, N.Y.
The pushback is clearly affecting sales, Ms. Riggs said. While the Consumer Price Index for food away from home rose nearly 4 percent in 2007, according to the Bureau of Labor Statistics, the average amount paid per person at a restaurant rose only about 2 percent, to $6.24, she said. That difference represents food consumers are not ordering.
"If consumers were not doing other things, that average check would be equal to the menu price increase," she said. "They are finding ways to spend less."
