Upheaval at noon: the lunch crunch – luncheon business falling off at downtown restaurants

Upheaval at noon: the lunch crunch – luncheon business falling off at downtown restaurants – editorial

Charles Bernstein

Upheaval at noon: the lunch crunch

Have you noticed lately that restaurants formerly full for one or even two luncheon seatings are sometimes half-empty during this critical meal period? Well, it is happening much to the chagrin of hard-pressed operators.

Although reservations once were a precious commodity at many of the better restaurants, today one can literally stroll into some of them at one’s convenience and obtain seating at almost any time. This phenomenon is particularly true in major cities, which normally thrive on large lunchtime crowds that have tended to flood downtown areas and create prosperity for some operations.

Yet dinner business–once a major problem during the week, as suburbanites exit the city before dinner–is holding its own or showing increases. This alone indicates that the luncheon business falloff so noticeable at downtown restaurants is not a result of the 80-percent meal tax deduction limitation rule, which went into effect Jan. 1.

It is still difficult to obtain a luncheon reservation at a handful of the most popular, strongest restaurants. But in general, reservations at the vast majority are unnecessary.

Possibly luncheon meal occasions are being transferred to breakfast and dinner. But the only logical explanation of the luncheon downturn is that this meal–the bulwark of the industry–is where customers are finally rebelling and taking a firm stand.

They are guarding their pocketbooks and wallets extremely closely. While they apparently are willing to pay $25, $30, or more per person for dinner, they are reluctant to pay $15 or $20 for lunch and maybe not even $10.

Customers perceive lunch more in terms of price-value and as a lower-cost meal. Furthermore, business people and their corporations are hesitant to spend $30 and more per person for lunch as “entertainment’ in these tight times.

In simple terms, consumers are fed up with escalating prices and declining service. They see no particular price-value relationship in restaurant lunches.

The proof is the big surge in “snack’ brownbagging, take-out, and delivery lunches to offices. Consumers perceive that, far beyond saving time, they can obtain a better all-around value while satisfying their lunchtime nutritional needs and appetites.

A definite factor in the lunch business falloff also is the increasing number of choices consumers face. It is actually part of the saturation syndrome, where a customer can choose one restaurant one day, another the next, and so on.

Options are vastly increased when the customer can eat out, eat in, take in, or take out. Loyalty lasts just about as long as the latest perfect meal.

In any case, it is certain that more than a few restaurants are suffering seriously in the lunch crunch and the saturation syndrome. The days of a restaurant being booked up for lunch five days in advance are pretty much over, except for the Four Seasons, Lutece, and perhaps a few other select restaurants.

The days of taking lunchtime customers for granted are over, too. This is a critical reason why operators must sharpen their service and review pricing structures. Otherwise, they will be priced out or serviced out of the market by the “new’ competition –at lunch or any other time.

At the same time the door is open for “snack’ operations to capitalize on the consumer’s desires for low-priced quick lunches. Take-out and home-office delivery operations can also keep surging.

The challenge facing restaurateurs is to show customers that lunch does not have to be an overpriced, lackluster experience.

COPYRIGHT 1987 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2004 Gale Group