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People Still Have to Eat - Zagats in The WSJ
Featured in The Wall Street Journal
October 30th, 2008
People Still Have to Eat
By: Nina Zagat and Tim Zagat
In the last few weeks, a lot of people have asked us how the current economic meltdown will affect America's restaurants.
The short-term answer is that the crisis is already having an impact. We've recently surveyed 45,000 restaurant-goers nationwide. One-third told us that they're eating out less, 28% say they're visiting less expensive places, and roughly 20% are cutting back on alcohol, appetizers and dessert. Also, the number of restaurant openings has slowed. This year in New York City, there were 119 openings versus 163 last year. Another grim sign: Companies are limiting entertaining at restaurants. One thing's for sure -- Bear Stearns and Lehman aren't giving any holiday parties.
Despite all this, we predict that the long-term future of the industry will not be bleak -- just different. When Zagat Survey began 30 years ago, the country was in its first "energy crisis," with interest rates scraping 20%. Nonetheless, America's restaurants flourished. After October 1987's Black Monday and again after 9/11, the industry took an immediate hit, but then bounced back stronger than ever. Throughout all three recessions, restaurant openings exceeded closings.