If there is one thing that everyone seems to agree upon it is that eating out in good restaurants is expensive. With lunch bills averaging £20/25 per head and a recent survey showing that the average dinner bill is just over £31 per head there is no doubt that eating out is not a cheap pastime, particularly when ancillary costs such as taxis and babysitters are thrown in and, worst of all, when the cooking or service do not impress.
But a current initiative, valid until the end of February, from the admirable and recently renovated Pied à Terre in central London suggests that this general view may not be as accurate as it seems.
Pied à Terre's initiative is not new, just timely. To celebrate their tenth birthday they are fixing their set lunch and dinner menus at the same prices as they were in 1991. But do not go along with a ten euro note and expect change – although quality and quantity are impressive, particularly a main course of roast monkfish with smoky bacon risotto, the savings are less than inflation and considerably less than the increase in average earnings.
The restaurant's set two-course lunch menu is normally £19.50 (just below the £20 price point that is so critical at lunch), an increase of only 11 per cent on the 1991 price of £17.50 – with dessert or cheese only a further three pounds. In the evening the two-course à la carte offer is a fixed £39.50, a 25 per cent increase on the 1991 prices. But both of these price increases are below inflation which has risen by 29.8 per cent since 1991. The only part of the restaurant's menu prices which have increased by more than inflation are their à la carte dessert and cheese prices which are 40 per cent up over the past decade, a reflection more of their highly perishable nature and the current preoccupation with diet and health than the restaurateur's greed.
By contrast, average earnings have increased by 51.7 per cent during the same period whilst the restaurant's rent, its biggest single fixed cost, has increased by 74 per cent from £48,000 to £83,500 per annum although variable costs such as gas and electricity are slightly cheaper. The small, independent restaurant is not, as I have said before, a blueprint for a financial fortune.
New York restaurateurs have faced similar problems according to Gary Levy of J H Cohn, financial consultants to the industry. Spaces that used to fetch US$30-40 a square foot now go for US$100-150 and wages have had to follow suit as between 1996 and 2001 800 restaurants opened in excess of closures equating to approximately 100,000 new seats. To quote Levy 'operators threw money at staff to keep them. Sous chefs that used to make $45,000 a year were now making $90,000 with a bonus, health benefits and pensions. It has got out of hand.' But, from the customer's point of view, this increased competition is effectively curbing any large price rises.
To increase revenue restaurateurs on both sides of the Atlantic have responded in similar fashion. Increasing the number of covers and turning tables are now common practices, not terribly popular with all customers, but less obvious than raising prices. Meanwhile implementing wine programmes and training waiting staff to sell more rather than just deliver food are now part of every successful restaurant's training manual. But, as Levy added, nothing works better than a dollar increase here and there and although many were slow to do it, good operators now rework their menu regularly and are consistent about raising prices at least once a year. Yet crucially, according to Levy, New York restaurant price increases, as well as those in London, still trail inflation.
These financial pressures are leading to three significant structural changes on both sides of the Atlantic. The first is the growing trend of former independent restaurant chefs to head for the financial security of the large hotels: Claude Troisgros is now cooking at 44 restaurant in the Royalton, New York and next week sees the opening of Giorgio Locatelli's Locanda Locatelli in the Churchill InterContinental, Portman Square. The second and perhaps the only option available to those with smaller restaurants is to open for longer, spreading fixed costs more widely. For the first time in its 32-year history Le Gavroche in Mayfair opens on a Saturday evening, as will Clarke's, London W8, after Easter with a more flexible dinner menu.
And, most conspicuously, every new large space must now have a big, bustling bar – an irrefutable fact of current restaurant life exemplified by the miserable closure last week of Neat in the Oxo Tower after only seven months trading as a restaurant/brasserie without one.
Digging deeper I did find evidence of a golden era when menu and wine prices were extremely reasonable but this was a time when restaurant going was not the democratic pastime it is today.
An old menu from my former restaurant, L'Escargot Bienvenu, dated 23 February 1960 (before my time) reads like a historical document. Cigars and cigarettes are encouraged; fish is less expensive than meat and the only dish that costs one old pound is an entrecôte en cocotte for two. Most main courses are less than one euro and allowing for inflation of 1300 per cent over the past 40 years this would equate to main courses of 13 euros, but I regret being unable to recommend too many restaurants offering food of this quality at these prices. Average earnings have multiplied during this period rising 2572 per cent since 1963.
There has, however, been an even more significant rise in wine prices. A 1959 list from merchants Saccone & Speed reveals not just a massive change in wine fashion – certain German wines are more expensive than first growth clarets, for example – but also in the prices at the top end. Top Bordeaux from the 1955 vintage is just over two euros a bottle. The 2000 vintage from the same properties when first released on to the market a year ago was a minimum of 225 euros a bottle. An example of just what happens to prices when fixed supply meets burgeoning international demand.
Sadly, I was not able to take advantage of either set of bargain prices but this exercise has made me appreciate that whilst British restaurant prices may seem high in comparison to those in other countries, a great deal of this has to do with the strong pound and less with rapacious restaurateurs.
And, as I came to appreciate whilst still a member of that happy band, although financial fortune may favour those in the City or on Wall Street, restaurateurs are in it principally for the good times.
Pied à Terre, 34 Charlotte Street, London W1P 1JH (www.pied.a.terre.co.uk tel 020 7636 1178)
Closed Saturday lunch and Sunday.
