By Mark Taylor, Post-Tribune correspondent
The economic downturn has hit many industries, but few are as vulnerable as restaurants.
Eating out, even at fast-food franchise restaurants, still represents a personal extravagance for most Americans, another luxury that cash-strapped and worried consumers increasingly are forgoing. Few people actually have to eat out.
Eating out, even at fast-food franchise restaurants, still represents a personal extravagance for most Americans, another luxury that cash-strapped and worried consumers increasingly are forgoing. Few people actually have to eat out.
The U.S. Bureau of Labor Statistics said restaurants have laid off or lost 67,000 jobs in the past five months. And the National Restaurant Association, a trade and lobbying organization based in Washington, D.C., said business seems to be down everywhere and is even worse in areas hardest hit by the recession.
The U.S. Bureau of Labor Statistics said restaurants have laid off or lost 67,000 jobs in the past five months. And the National Restaurant Association, a trade and lobbying organization based in Washington, D.C., said business seems to be down everywhere and is even worse in areas hardest hit by the recession.
In Northwest Indiana at least a dozen restaurants have closed in the past year, including favorites like Stones Bones in Munster, the Beach Cafe, Ming Ling and La Dolce Vita in Gary, Sultan Cafe in Griffith, Jumidel's in Hammond and Hot or Not in Portage.
Some fell victim to the flagging economy, others were struck by fire or other disasters and never recovered.
Those remaining face an uncertain future. But a random survey of leading area restaurants found success stories among the doom and gloom and a can-do spirit of optimism and resilience.
Holiday business down
Most reported decreased holiday business, with catered Christmas and holiday parties that were downsized or eliminated even as the costs of food, supplies and transportation continue to rise.
Saverio Castellucci, owner of ZaZa Ristorante in Valparaiso, said ZaZa's is feeling the crunch as badly as everyone else. "Our customers are not coming as much as they used to, from once or twice a week then to once every week or two now," Castellucci said. "We've cut prices on some food items and are giving away gift certificates to some regular customers to come back. It helps a little. We try to buy things that we know we move a lot of and others just as we need them."
Sultan Cafe in Griffith burned down a shortly after owner Ghassan Mohammed of Schererville sold the restaurant to his cousin. "It is tough for everyone," Mohammed said. "Sales were not like this before."
Jim Fassinger, chef at Portage's Hot Or Not Cajun Restaurant, said a fire also struck that restaurant in June and the owners are still arguing with insurers. Fassinger said the tanking economy hasn't helped. "But even before the fire we were feeling the effects of the economy," he said. "Our regulars from Chicago just weren't stopping in as much as they used to in years past."
Chela's Restaurant in Highland suffered what could have been a fatal blow when its founder and owner, Marisella "Chela" Salinas, died in March. "It's been a difficult transition," conceded Salinas' aunt, Liz Martinez of East Chicago, who said Salinas' brother, Noel, is now running the restaurant.
"We are not doing well," Martinez said. "Business is down. We had to cut back hours for employees and we're trying to put on more specials. Our dollar lunch day went from one to three days. It's been very hard trying to keep the business open and do the best we can, to bring in new customers and keep her memory alive. We wanted to keep this alive for her three children."
Whiting police officer John Sopo and his wife, school social worker Cheryl Sopo, operate Winey Beach Cafe in Whiting. "We found when gas prices increased, it hurt us more," Sopo said. "People weren't traveling as much to come to see us from out of state. They didn't want to spend $50 in gas to get to us. But since gas prices have gone down, we're picking up again. We've tightened our belts and really, really watched our in-house spending. Some luxuries we've offered on specials, we haven't been buying lately."
Some are hanging on
Art Georgon, owner and manager of Valparaiso's Pesto Restaurant, said the 15-year-old restaurant has a loyal customer base. "We're lucky enough not to have to pass on the burden to our customers through price increases or haven't had to lay off employees," Georgon said. "We don't do promotions. We don't like to sacrifice branding for short-term profit. Catering and luncheons have helped out."
Paul Petrie, owner of Tyler's Tender in Schererville, said he and his wife, Emily, are knocking on a large piece of wood. "Our business is up from last year. We continually strive to exceed the expectations of every customer," Petrie said of his railroad themed restaurant aimed at train-loving children and their families. "We're watching our food and labor costs very closely, monitor them weekly to ensure we're not wasting any money. What we haven't seen is a decrease in our raw costs. With fuel costs dropping, I anticipated our food purchase costs dropping, but they haven't yet."
Stick with what's needed
Karen Jesso, owner and hostess of Cafe Borghia, said business was slipping even before the longtime Lansing eatery moved to Munster in August 2007.
"This is the first time, and I'm a career restaurant worker, that I have this outlook. Every day I look at the calendar, cross another one off and say I'm thankful we made it through another day," Jesso said. "It's really hard to look ahead. Our bills are paid. Financially, we're doing OK. But you don't know what's coming in or when."
While she said the restaurant hasn't cut back its hours, "more than ever we need to open when we say we're open and close when we say we'll be closed. If you start shrinking hours or leaving before closing hours, you confuse your customers. You need to be open, but you don't need a million people working until then if it's a slow night."
Jesso said she explains to budget-conscious diners that they can order soup and salad for $10 and while there is no kids menu, she points out one $8 pizza can feed three or four kids. "Children are our customers of the future. There are all kinds of ways to help diners get more for their money," she said. "We try to offer nice wines at a good price and offer them as specials when they're on a deal. We buy at a volume discount and the pass savings on to customers. We're trying to get the best savings from our purveyors. These guys are working with us and let us know what to buy when, when they have specials. We're all in this together."
Gary Sanders, owner of the Miller Bakery Cafe in Gary, said restaurateurs need to continue to believe in what they do and turn out a good quality product at a good value.
He cautioned restaurant operators not to resort to "two-for-one nights" and "free bottles of wine nights" to pick up the slack. "Cut out some frivolous marketing and reduce your donations and ad budgets and back down on inventory," Sanders said. "Keep a good handle on payroll and inventory. But don't redefine yourselves. You opened with a good idea and stick to it with all your heart."