In the glamorous nightclubs of New York, bottle service has returned. Again, with entrance, every table forks up hundreds of dollars for a bottle. This says the rich are no longer afraid at acting rich. To some degree, the bounce back has ironically happened in New York first, and the well-off have gotten out their wallets once again. What does that mean for every other bar and restaurant that doesn’t happen to draw only the shamelessly free spending?
As much as people would like to paint New York in a bubble, that really is only half the story. Since the initial hardship that everyone suffered with the recession, most of those with terrific amounts of disposable income have rebounded already, while much of America is counting the weeks until unemployment runs out. The reason is simple: just as the bankers make money in New York, so do investors situated in every wealthy enclave across the country. Both their fortunes go up and down with the stock market in contrast to the middle classes that count on the value of their home and the safety of their jobs. .
Restaurant owners need to put this all in perspective as many cater to the affluent, although few exclusively to them. The swing is most obvious with alcohol. Restaurants that sell expensive wines have had to cut back and balance their wine list with cheaper wines. Many of those more expensive wines had to be unloaded at a fraction of their normal price. Fine restaurants experienced reduced traffic, forcing owners to cut staff and hours. Some restaurants were pushed to the brink; others didn’t make it.
Although few have been forthright about it, even food quality suffered. As restaurants feared scaring away customer who were still dining out, menu prices stayed static and discounts became the rule. This all happened as food commodities have risen way faster than inflation for years. Inevitably, sacrifices in ingredients had to be made.
Small business owners, especially restaurant owners, felt the pain. Most still do as the restaurant industry has shrunk, and only the truly rich can afford to go back to their previous dining habits. Restaurant owners who made it through the toughest times deserve some part in the resurgence, however limited it may be. Therefore, restaurant owners who know have customers that care little for price should make those price increases they couldn’t risk before. In general, higher end food and drink can slowly be let back into the menu, and those items can creep upwards in price. That doesn’t mean the whole menu should soar upwards for the majority of restaurants do not rely entirely on the rich. No one wants to loss regulars who are pushing their budget to frequent their favorite restaurant. Think of it this way, as inequality widens in America, so does the range of prices on a menu.
But before you re-evaluate your menu (both with price and the selection of food and drink) make sure you know the economic position of your customers and whether they are trying to maintain their standard of living or are prospering profusely. After that, start small with a few of the higher priced items and see if the price increase alters ordering behavior. Eventually, you may even be able to ask your servers to suggesting more expensive items. Still, the restaurant industry of 2011 is not the restaurant industry of 2006.