In the past few years, there have been many restaurants opening up all around the country. Even in an excellent economy, there just is not enough room for every one to make a go of it. Something had to give eventually. Now, major employers are lining up for government handouts like hobos at a soup kitchen; layoffs are piling up as fast as overdue bills, and everywhere we look, the signs say things will get worse before they get better. Usually in times like these, the first things to go are the indulgences, the luxuries and the special treats, like dining out, at least for us working stiffs. Only time will tell how the slowing economy will affect restaurants.
A first impulse is to believe that prices will come down as clientele diminishes. In fact, a few restaurants, like Cucina Roma Roma, already reduced prices to help their loyal customers, but do not expect that kind of wholesale change right away. History shows this type of response to be the exception rather than the norm. Even during the Great Depression, those who had money to begin with felt little need to change exorbitant spending habits, and just the other day, American automobile manufactures climbed aboard private jets to fly to Washington to plead for financial help from the government. Even fearing bankruptcy, they were not willing to part with their private jets.
Given that evidence along with what we know of American greed, it becomes difficult to believe that the nation's CEOs are not already strapping on their Golden Parachutes, organizing their financial pillows, and readying themselves for retirement surrounded by the splendor that marked their corporate lives even as the people who helped them there, their workers, prepare for uncertain futures. The ultra rich and the establishments they patronize will probably continue regular business no matter what happens to the economy and it may take some time before prices drop in response to reduced business.
If history is any indication, the economy will affect the price of dining out much the same wasy that confidence affects the Stock Market. The longer the downturn persists, the more people of lesser means will feel the pressure, and the more consumer confidence will wane, requiring either a reduction in prices from vendors or the ultimate loss of business. Those people further down the ladder just will not be able to justify such expenditures and the restaurants relying on that business just to stay in business will need to adjust their prices or face losing everything. It seems simple and straightforward, but, before the rash of foreclosures, numerous layoffs, and the reality of recession, people actually believed they were living within their means. The truth of reality often sneaks up on us when we are least expecting.
As for the people who rely on tips to make financial ends meet, at least for now, they seem to be holding on to the status quo. A check of the internet and comments from American diners shows that most diners are still indulging and holding to the practice of tipping the same way they did before the tanking economy. Many are sticking to the 20% tip baseline that has not changed in decades, others still resent the practice altogether, and a few are so bold as to comment, "If you can't afford to tip, you can't afford to dine out". That last comments raises the most worry for tipped employees and the restaurant industry. More and more consumers may arrive at that financial crossroads and just decide to stay home. Right now, however, it is just too early to tell anything for sure except that change is coming.
The greater the quantity of companies going under, the longer the recession persists, and the number of discretionary dollars available to consumers will eventually affect the level of confidence in the economy and will affect us all. Sure, this information is about as prophetic as J.P. Morgan's answer when queried about what he thought the Stock Market would do. He replied, "It will fluctuate". As silly and obvious as it seems, that is the bottom line. It could all turn around tomorrow, or it could persist for years. Right now, it is just too early to tell, and too early to panic, but it is never too early to think about one's own future and to prepare for the crisis we hope never arrives.