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Spokane-area eateries take steps to survive during slowdown

Wed., Jan. 27, 2010

Across the nation, talk has turned to recovery. But in the Inland Northwest, restaurants are still scrimping and tweaking menus to lure customers back through the doors.

Battered by a lagging economy that has customers keeping a tight grip on their wallets, area eateries are still taking measures to cut costs and draw more people to their tables.

Some are closing stores and slashing hours, while others are revamping menus and reaching out to customers using Facebook and Twitter.

“It’s a unique time in the industry,” says Anthony Anton, chief executive of the Washington Restaurant Association, who was in Spokane recently for the group’s annual meeting.

“We haven’t really seen it before. Consumers have been buying down; price point has become extremely important … so restaurants have been making adjustments since September of 2008, then through this past year and now we’re getting into 2010.”

That was after years of growth and a high-flying hedonism before the recession began, he says, when customers were willing to pay top dollar just for the experience of trying something new or indulging in a high-end bottle of wine.

“So, they hard-shifted from one extreme to another and restaurants had to make a fairly hard shift in adapting,” Anton says.

At Wild Sage Bistro, co-owner David Wells says they didn’t set out to be a high-end, special-occasion restaurant, but that was the niche that they found.

And as the recession wore on, it became clear that customers – even those who weren’t directly affected by job losses and pay cuts – were still being more careful with spending. More people were splitting meals and smaller portions became more popular.

Wild Sage cut its lunch service in June to save on costs and Wells says they probably should have done it a year earlier. Now, they’ve introduced a revamped menu with some lower-priced “bistro plates.”

Wells says they were careful not to compromise quality or their goal of offering local and sustainable products.

Chef Alexa Wilson says many of the dinner entrees have up to 16 elements that must come together to complete a dish. For the bistro plates, they chose items that weren’t as complicated to make. A dish might have nine components that need to be prepared by the kitchen instead.

“They’re all the same quality, but they are quicker and more economical for us to make, so that we can turn around and pass those savings on to the guests,” she says.

They’ve added a half-pound Kobe beef burger, smaller pasta portions and some entrée salads to the bistro plates menu, which range in price from $14 to $16.50. Dinner entrees are $19 to $29 each.

“They don’t have to come in and have a culinary experience. They can just have a really tasty dinner here, too,” says Wilson.

Chicken-n-More owner Bob Hemphill closed his Spokane Valley location amid lagging sales.

Things were looking better before the branch closed in November, Hemphill says, but he’d already made plans to sell the location.

“I think I could have made it out there in the Valley if I could have just hung in there a little bit longer, but the bills were just coming in,” says Hemphill, who also tried coupons to bring people in for lunch and dinner.

“It’s a lot better. We’ve caught up on most of our bills and paying all the taxes. Things are a lot better. We’ve got money in the bank now, where before …”

Cutting prices to compete with the specials of the national chain restaurants is all but impossible for small places like Chicken-n-More, which serves Southern-style barbecue and fried chicken.

“I can’t make a dollar menu,” Hemphill says.

Anton says most restaurants are already operating on a slim margin. The average profit for Washington restaurants is just 4 percent, he says.

Many restaurants have had to renegotiate everything – leases, contracts, food costs, labor costs – trying to stay afloat.

“Most suppliers will tell you that they have been squeezed like they’ve never been squeezed before because the operators are trying to survive,” Anton says.

Washington restaurants have shed more than 11,000 jobs since September 2008, he says. That’s something that would have been headline news if it were layoffs from a single large company, Anton adds, but most restaurant owners have had to make small adjustments to stay in business.

Lisa Hooke, co-owner of Senor Froggy’s, says customers already expect higher quality and lower prices than ever before. She and her husband Dave have owned the Mexican fast food restaurants, which also feature Luigi’s Italian Express, since 1979.

“Customers expect the food quality that they used to get at the higher-priced places and we try to do just as good as a job,” she says, but there are limits.

They haven’t resorted to downsizing portions or making a lower-calorie menu.

Hooke says she and other “quick service” restaurant owners are working hard on impeccable service so customers keep coming back.

Hemphill has the same goal. “This is my mission: Treat every customer with exception,” he says. “Accept them all, admire them and appreciate them. Just thank them for coming in, show them some kindness when they come in and don’t discount anybody.”

At Vin Rouge, co-owner Jeff Jenkins says customers don’t seem to be dining out less frequently, they just want to spend less during each visit.

The South Hill restaurant recently expanded its “social hour” menu to meet the demand for more of the small plates and specials. It also has a $5.50 martini, $2.50 tap beer and red and white wine specials for $4.

The menu includes salads, sandwiches and small plates. Salads start at $3.95 for a small and go up to $7.95 for larger offerings. Yellow fin tuna or chicken can be added.

Small plates range from $2.95 for a cup of honey pumpkin bisque to sweet potato fries for $4.45 to pork “wings” with a sweet chili sauce and sesame slaw for $6.95.

Sandwiches are $6.95 for barbecue pork, a burger with hickory smoked bacon or spiced lamb with spinach, feta cheese and tzatziki on pita. Each comes with the restaurant’s signature frites, tossed with white balsamic vinegar and red pepper flakes, or a salad for a $1 more.

“It’s a tough time right now and we’re just trying to encourage people to eat out a little more,” Jenkins says.

Anton says many area restaurants are re-evaluating the time and money spent on marketing and many have turned to social media to get the word out about their food.

Become “friends” with the Satellite Diner, Coffee Social or Stir on Facebook or Twitter and the mouthwatering descriptions of daily specials are hard to resist.

Ken DuPree, co-owner of Stir Restaurant and Lounge in North Spokane, says he began with a personal Facebook page.

“When it first started out I just kind of signed up to keep up with friends but I had people asking me all the time, ‘Hey, what is going on at the restaurant tonight?’ ” he says.

Now he’s posting daily drink specials, the half-price wine offered on Wednesdays and half-price appetizers, along with pictures and even food and wine pairing ideas.

“We’ve tried everything,” says DuPree. “We don’t have a huge advertising budget but we did a little bit of television and a little bit in the newspaper… door hangers in the neighborhood and sending people out into businesses.

“But nothing has really worked quite like Facebook and you don’t have to leave your office.”

The restaurant has up to 10 people asking to be “friends” every day and almost 1,400 followers.

DuPree says they started a “We Love Stir” Facebook page, but he’s doing most of the marketing from his own page and that has given him a surprisingly personal connection to customers.

“I think it is so neat when people come in and introduce themselves to me,” he says. “You get that one-on-one contact that you don’t get with any other form of advertising.

Signs of struggle are still common. The restaurant association’s Anton says unemployment numbers are one of the most important indicators for the industry. He says economists are predicting the jobless rate should reach its peak by March.

Spokane’s jobless rate was 9.3 percent in December, compared with 8.5 percent the month before. It was 7.3 percent the year before, according to state economists.

“Spokane hasn’t necessarily felt the high of the highs and hasn’t felt the low of the lows,” Anton says. “It has been able to ride between the extremes.”

Still, restaurateurs say they’re hopeful that the worst is over.

“The thing I think we can do is just be still and wait until the storm is over,” says Hemphill. “If we can just be patient it will pass.”

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