More elbow room at tables as business lunches drop off

Chicago Tribune (MCT) - Step into one of Chicago's tonier dining rooms at noon, and you'll likely see plenty of empty tables sheathed in white linen.

One recent day, advertising executive Jim Schmidt ventured into a well-known seafood spot and found "you could roll bowling balls through the aisles at 12:15."

The business lunch, already a pallid salad or fish version of its former beefy, boozy self, is shrinking in popularity as the economic crisis sends shivers down the spines of companies big and small.

"The overall trend has been less schmoozing the last few years anyway, and this has accelerated it," said Schmidt, chief creative of Chicago advertising agency Downtown Partners.

Or as Walgreen Co. spokesman Michael Polzin put it, "There certainly is a recognition that as the economy softens and sales soften, we have to adjust expenses accordingly. ... Budgets are being cut back for travel."

Chicago restaurateurs say so far the effects of the economic crisis have been modest, with sales either holding steady or eroding by a few percentage points. But nationwide there are some arresting indicators.

Restaurant sales, when adjusted for inflation, declined in the first nine months of the year, a first since the recession of 1991, said Hudson Riehle, senior vice president for research at the National Restaurant Association. And October was the fourth consecutive month of restaurant job losses, the longest string of cuts in 45 years.

Fine-dining chains, primarily the steakhouses that cater to business travelers and conventioneers, saw a 7.1 percent decline in same-store sales in the third quarter compared with the same quarter in 2007, according to data compiled by Technomic Inc.

"There is no doubt business lunches are under pressure," Riehle said.

All of which means customers can expect getting the royal treatment.

At Phil Stefani's 437 Rush in Chicago, for example, a top executive sent a complimentary antipasto to one table of conventioneers one recent evening and a free burrata cheese appetizer to another.

"We never do two-for-one, or 20 percent off ... but we use a more personal touch," said Steven Hartenstein, chief executive of Phil Stefani Signature Restaurants. "We've always been known for it, but we've definitely turned up the heat."

Restaurant customers also can expect a greater range of prices on menus and more comfort food selections. Often, restaurateurs can cut their food costs and soothe their customers by bringing on such offerings.

"We're in the perfect moment for the ascent of the really good burger," restaurant consultant Clark Wolf said.

At restaurants such as Coco Pazzo in Chicago's River North area, for instance, high-quality steaks and veal chops will keep their place on the menu, augmented by such seasonal offerings as braised lamb shank with root vegetables, said operating partner Jack Weiss.

"It's a good food-cost item and it's quite delicious. I even cook it at home," he said.

And special deals are surfacing. The Palm in the Chicago Swissotel, for instance, rolled out a business-lunch offer this month, with soup or salad, an entree such as twin tenderloins, Atlantic salmon or lobster salad, and a side dish, for $18.95, which is a considerable savings over ordering such items individually.

Those planning private parties in the Chicago area will "get the deals they want," said chef/restaurateur Michael Kornick of N9NE Steakhouse and MK. "Whatever last year's rate was is negotiable. Even though the cost of food has gone up, you have to fill your place with traffic."

Morton's Restaurant Group Inc. is going after private lunch and breakfast events, even at its restaurants that normally open only for dinner.

"In light of what's going on in the economy, people's budgets may be more limited for certain events, so they might do breakfast or lunch more than dinner," said Morton's spokesman Roger Drake.

Observers expect any number of mediocre business-lunch haunts to hit the dust. But well-run, well-located restaurants will survive this downturn, predicts restaurant broker Jeremy Kudan.

And among those keeping them alive will be the rainmakers of the business world.

"I've been doing everything I can to get in front of clients and prospective clients," said real estate attorney Tony Licata, a partner at Chicago law firm Shefsky & Froelich. "If they are willing to go to lunch, I take them."

Sports marketing guru Bernie DiMeo is on the same page: "I'm personally of the belief that you can't replace that kind of time, breaking bread with a client or potential client. ... Obviously, a great number of people have scaled back, but I don't happen to be one of them."

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© 2008, Chicago Tribune.