NY restaurants – under threat?


Des Gunewardena, the chairman of D&D Restaurants (the old Conran group), was in even more ebullient form than usual when I bumped into him recently over lunch in the newly opened second branch of Blacklock in the City of London. 

His mood, he explained, was primarily due to the fact that he had recently returned from New York. ‘They may have Trump', he observed, ‘but the city is so confident and positive that they set an example to us all.’ With that, he moved on to enjoy some well-grilled meat with his long-standing lawyer. 

Gunewardena’s confidence in New York is exemplified in his recent signing of a lease for an 11,000 sq ft restaurant space in the new Hudson Yards development currently rising out of the ground in Manhattan’s Lower West Side. But before any reader rushes off for a change of career, let me point out two concerns that I heard frequently during our recent stay in the city.

The first, and one that has been consistent over the past 30 years I have been visiting this fascinating city in a professional capacity, is the increasing rents being demanded by landlords, whether in dollars per sq ft or as a percentage of turnover. But what is new, although certain restaurateurs have been cognisant of it for some time, is the legislative effect of rising wages. From December 2018 the hourly minimum wage will be US$15 per hour, a significant increase over the $10 per hour that it used to be.

This seems to be having one major and obvious effect. The city is swinging back to a style of eating that it was once famous for, before the rise in popularity of so many restaurants with white tablecloths. I am referring to that very New York phenomenon of ‘fast casual’ eating, often standing, often eating out of a paper bag or off a tray, often queuing in line and often receiving your food when your name is called. The city’s restaurateurs are adapting their offering, ensuring that the quality of what is cooked remains high, but saying effectively that this style of service will have to replace what has over the past 30 years become the norm because today, and increasingly in the future, offering full waiter service will no longer be financially viable.

Danny Meyer, the founder of Union Square Hospitality Group, has even, according to his rivals, been the first to address this situation by adopting the French method of including service in all his menu prices, a system known as Hospitality Included, which currently operates in most of his restaurants. But he has also gone a step further with the opening of Daily Provisions and Martina, a sibling to his highly successful pizzeria, Marta.

Daily Provisions, which describes itself as your neighbourhood coffee, bakery (the bread counter is pictured above) and sandwich shop, is located right next door to his new Union Square Café and the two enterprises share a kitchen. But DP is much smaller; orders are placed with a cashier (no cash, only credit cards); and then your food appears as they shout your name. The place has proved hugely popular during the day – the evenings less so – but the combination of the two has proved so winning that a Daily Provisions will form a significant part of the Union Square Café that will open in Washington DC in 2018. Martina, located close to NY University, offers a margherita pizza for $7, a quatro fromaggi for $9, prices that are feasible only because the pizza has to be collected by the customer and paid for only by credit card, thereby eliminating a cashier’s wages.

These two factors, rising rents and the rising minimum wage, are combining to produce what will be a bifurcation in the city’s restaurants: a move towards smaller, high-end restaurants that are attractive to those who can afford them and to more numerous, smaller, almost self service type affairs. This may be a logical conclusion – although who is to say that the restaurant business has ever behaved in a logical fashion in the past?

Having said that, I heard of plenty of companies planning new, large openings, companies either unaware of the rising costs or able to make savings that do not appear obvious. These may revolve principally around trying to take in too many customers for the kitchen to accommodate or by adding sessions when the restaurant has been closed. Both can, and in my case did, lead to disappointment.

Clare de Boer, Jess Shadbolt and Annie Shi run King on King Street, SoHo, having made their way here via diverse routes. The first two met in London, working at The Clove Club and the River Café respectively before meeting Shi, formerly a derivatives trader with JP Morgan. While looking at a potential site in Chinatown, Shi dropped into what was the dark interior of this now entirely white restaurant, complete with an open kitchen, for a drink and persuaded the owner to part with it. (A short summation of what I am sure was a far more complicated process.)

The restaurant, on a corner site that also accommodates plenty of tables outside, comes into its own when the evenings are warm, as it was on the night we ate there. And this, coupled with the fact that the week before had been Yom Kippur that had kept many of their Jewish customers at home, led to a huge spike in numbers that the kitchen seemed to have trouble coping with. Certainly, my ricotta ravioli was far from perfect as was another first course, which I asked for as my main course, grilled ox tongue with lentils. This was, to a certain extent, compensated for by the charm of the service and two terrific wines, a Cassis 2015 and a mature 2011 Terrebrune Bandol.

Estela is located in a narrow room upstairs on East Houston Street and has established a name for itself as a dinner location but the chef here, Ignacio Mattes, has now decided to open for lunch on Fridays only. Anyone planning a boozy ‘POETS’ day session (piss off early, tomorrow’s Saturday) will be well advised to choose here as their wine list is fascinating: mature Chablis from Raveneau, the 2002 at US$725, and far less expensive wines from the Czech Republic, Slovenia and Slovakia as well as an extensive selection from Spain and Italy, a list carefully compiled by Thomas Carter, Mattes’ business partner.

If, however, you want a quick lunch – as I did with an old friend from London – then it would be advisable to let the waiting staff know right at the outset. That way you will not have to wait over an hour for two courses which included two salads – a burrata with salsa verde and a very good combination of endive, walnuts and anchovy – followed by a plate of arroz negro with romesco and a ‘sandwich’ of fried black pudding that should have come much more swiftly.

There is a fear among those in the hospitality industry that rising rents and the higher hourly minimum wage will lead to one inevitable conclusion – the loss of the independent restaurant. Restaurants could become the preserve of groups, hotels or chains, an outcome that would be a lasting loss for this city.