As the economy slows, restaurants are feeling the pinch. Despite not yet labeling the situation a recession, many eateries are experiencing a decline in customers and a decrease in average check sizes. Lorenzo Ross, kitchen manager at Smoke Shop BBQ in the Seaport, reports fewer visits from regulars, noting a shift from thrice-monthly visits to just twice. Similarly, Brine, a seafood spot in Newburyport, has seen a summer slump, and Shanti, an Indian restaurant in Dorchester and Roslindale, is facing budget cuts from corporate clients.
Allie Duncan, a 28-year-old marketing manager, now eats out less frequently due to rising costs, shifting from dining out several times a week to only on special occasions. This change highlights a broader trend: when people worry about their finances or job security, dining out is often the first expense to be trimmed.
Nationally, restaurant visits have dropped by 2.6% in the first half of the year, as reported by Circana. This decline is attributed to high inflation and growing consumer debt, impacting everything from fine dining to fast food. Even McDonald’s has felt the impact, reporting reduced sales.
Steve Clark, CEO of the Massachusetts Restaurant Association, notes a general softening in the sector but remains uncertain if this is a sign of a more extensive economic downturn or merely a cooling period. With inflation affecting costs and consumer confidence wavering, restaurants are strategizing to attract patrons. Andy Husbands, owner of Smoke Shop, observes a drop in business metrics, such as a decrease in aluminum trays used for serving, reflecting consumer caution.
Post-pandemic, restaurants had rebounded with government aid and consumer spending, but persistent inflation has squeezed profit margins. Some establishments, like Brine, have adjusted their menus and pricing strategies to maintain value while managing rising costs. For instance, Brine pulled a high-cost scallop dish to avoid alienating customers.
In response to the downturn, many restaurants are offering discounts and promotions. McDonald’s introduced a $5 meal deal, and the semi-annual Dine Out Boston event has expanded to include 189 restaurants this August, compared to 148 last year. Shanti, for example, has adjusted its menu and prices strategically to offer more affordable options, such as eliminating costly goat dishes and tweaking side dish prices.
Looking ahead, some restaurants are hopeful for a bounce-back in the fall and winter seasons, while others are preparing for continued challenges. The shifting consumer behavior underscores the importance of adaptive strategies in an uncertain economic climate. As the restaurant industry continues to navigate these turbulent waters, the ultimate outcome will depend on how well they can balance consumer expectations with operational realities.
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