Business

Restaurant Rebound

Joyce Smith carries a platter full of dinner orders out of the kitchen to customers at the Vail Steak House in Vail, Ariz. After more than a year of staying home, American diners are starting to splurge again, much to the relief of restaurateurs. (Associated Press)
Joyce Smith carries a platter full of dinner orders out of the kitchen to customers at the Vail Steak House in Vail, Ariz. After more than a year of staying home, American diners are starting to splurge again, much to the relief of restaurateurs. (Associated Press)

As the economic recovery takes hold, eateries, consumers filling up again

CHICAGO – It took more than a year, but American diners are coming out of hiding, starting to splurge on everything from tea to tacos, and tacking on some dessert.

The meals aren’t fancy – and business is far what it was before the recession sent the nation spiraling – but restaurateurs big and small say they’re breathing a tentative sigh of relief as tables fill up.

At Deleece, a restaurant on Chicago’s north side, crowds are bigger than they’ve been in months. It’s noisier, too.

“People are out and they’re spending a little more and maybe they’re buying that extra appetizer they didn’t before,” said Brandon Canfield, the restaurant’s chef.

In the depths of the recession, Deleece’s customers might order a glass of wine, a salad and an entree. Now, they’re more likely to get a bottle of wine, a hot appetizer and an entree. They’ll also split a dessert, which adds up to bigger bills and full tables.

The shift, which Jefferies restaurant analyst Jeff Farmer calls a “slow grind,” began in late January and is gaining steam.

“They’re not necessarily seeing the light at the end of the tunnel, but there’s a realization that things aren’t going to get any worse than they are right now,” Farmer said.

Still, it wasn’t until March that the change became downright impressive, boosting revenue at scores of fast-food and casual dining chain locations open at least a year. There the measure has stagnated for nearly two years, experts said.

Few restaurant chains release sales by month, but data from market research firm NPD Group showed the measure rose for five of the past eight weeks at nearly four dozen fast-food and family-style restaurant chains.

At McDonald’s Corp. it climbed 5 percent in March. There was a double-digit increase in the figure at Panera Bread Co., which along with strong sales in January and February prompted the company to boost its profit forecast.

A number of factors could be behind the March upswing: An influx in cash from tax refunds; warm weather that drew people from their homes; or increasing confidence that the economic recovery isn’t a mirage.

“A year ago at this time, all we talked about was the recession and whether we were going to become cavemen because the economy was collapsing,” said Panera Bread Co. Chairman and CEO Ron Shaich. “I think we’ve returned to a time of business as usual, in the sense that we will survive.”

Starbucks also managed to snag an increase in tea and coffee customers – its first in 13 quarters.

Mary Smith is among those who finds herself in restaurants more frequently.

The 47-year-old Tigard, Ore., woman rarely dined out when she was unemployed. But since she began work as a legal assistant in January, she treats herself to lunch out once a week.



Click here to comment on this story »







Sections


Profile

Contact the Spokesman

Main switchboard:
(509) 459-5000
Customer service:
(800) 338-8801
Newsroom:
(509) 459-5400
(800) 789-0029
Back to Spokesman Mobile