Downturn nibbled at Valley restaurants' health

Thursday, February 27, 2014
History isn’t certain whether Napoleon or Frederick the Great of Prussia coined the phrase “An army marches on its stomach,” but the meaning itself is clear: An armed force is a lot more effective when it’s well-fed.

It might be a stretch to say the economy marches on its stomach, but the health of the economy is often reflected in the restaurant business. According to the Massachusetts Restaurant Association, about 300,000 people — some 10 percent of the state’s workforce — are employed in serving food and beverage.

When the economy suffers, as it did in the Great Recession of 2008-2010, one sector that takes a hit is the restaurant business.

“There is no doubt that 2008 had a devastating effect on the industry,” said Bob Luz, president and CEO of the MRA, a nonprofit group that represents 5,500 restaurants across the state. “When times are hard, people are less likely to use disposable income for something like eating out, and you can’t really blame them.”

However, Luz says things have rebounded in the last few years — most notably in the greater Boston area — enough that the amount of meal tax generated from restaurant and food service sales in the state was up 4 percent last year, he said.

“I think we’re headed in the right direction,” said Luz, a graduate of the University of Massachusetts Amherst’s hospitality and tourism department.

Local restaurant owners say they also believe they’ve weathered the worst of the recent downturn and that the food industry has a certain ebb and flow that must be accepted. They do a number of things to keep their businesses viable, especially in leaner economic times — varying the menu, focusing on service, taking customer feedback seriously. Quite simply, they also have to work harder and longer.

“We’re not recession-proof,” said Paul Sustick, co-owner of Paul & Elizabeth’s, one of Northampton’s oldest restaurants. “We’ve had to hold down menu pricing — you don’t want to scare customers away. So you end up working a little harder to keep your costs in line.”

Fred Gohr, a co-owner of Fitzwilly’s in Northampton, notes that his restaurant is celebrating its 40th anniversary this year “so we must be doing something right.” In this case, he said, that’s meant keeping prices affordable, maintaining a committed, dependable staff, and serving popular comfort food like grilled meats, pasta, fish and sandwiches.

“I think the fact we’ve been here so long has worked in our favor,” said Gohr. “Sure, there have been bumps in the road, but we’ve got a pretty loyal customer base that’s kept us going. And Northampton’s a great place to be. Between the arts community, the restaurants, music, shopping, the town still brings people in.”

In the last few years, Luz says, successful restaurants have embraced emerging trends. More casual dining is increasingly popular, as is customer interest in eating local and regional produce. Fresh food with imaginative pairings, not overly complicated or fancy meals, are the order of the day.

“Today’s customers are more sophisticated, and a lot of them want to eat more quickly — there’s less interest in a formal dining experience,” he said. “They’re also interested in eating food that’s grown or raised locally.”

That’s something Unmi Abkin and Roger Taylor, who opened Coco restaurant in Easthampton in 2011 and now also run the adjacent Cellar Bar, have taken into account. Starting a restaurant in the aftermath of a grim recession might seem risky, but Taylor said he and his wife, former Valley residents who moved back here after living in northern California for several years, looked carefully in the area and saw an opportunity.

The formula the couple developed for Coco and the Cellar Bar is based on modest size — each section seats about 30 people, Taylor says — affordable prices, and a limited though changing menu that focuses on meals prepared with local ingredients and attention to detail. Batter-fried chicken and Brussels sprouts, salmon with mint and chickpeas, and roasted eggplant are among the offerings.

“This can be a difficult business, but we’re pretty happy about where we are right now,” said Taylor. “You put in a lot of hours, but because we have a good staff and we’ve kept the size and the menu manageable, it works.”

It doesn’t hurt that both he and his wife are experienced cooks with years in the business; Abkin was the owner and chief chef at the popular Latin-fusion grill Cha Cha Cha in Northampton in the early 2000s. Their new restaurant is named after their young daughter.

One good sign, Taylor says, is that they’ve built up a body of regular customers who they know by name. “I think if you give people a good experience, they’ll keep coming back,” he said.

Still tough

Nevertheless, the restaurant business “is not for the faint of heart,” said Luz, who notes that restaurant owners have to be willing to make changes. As one example, Claudio Guerra, founder of the Spoleto Restaurant Group, originally had seven restaurants in the area. But in the last few years, he closed three and plans to sell a fourth, Spoleto East Longmeadow, to his general manager, Bill Collins.

Guerra says he’s now concentrating on his three Northampton restaurants, including the flagship, Spoleto Northampton.

“I’m downsizing because of necessity,” said Guerra, who also owns Pizza Paradiso and Mama Iguana’s. “The recession hit us pretty hard, and five years later, I’m still making adjustments.”

Still, Guerra says Spoleto, which he relocated in Northampton in fall 2012 from rented space to a building he owns at 1 Bridge St., has done well in the new spot. Meanwhile, he’s built up strong connections with local food and beverage suppliers, like Black Birch Vineyard of Southampton. “My outlook is strong. I’m licking my wounds, but I’m still very bullish.”

Sustick, who opened Paul & Elizabeth’s in 1978 with his wife, Elizabeth, said he is grateful he’s located in Northampton. “It’s a great town to be in, with a good customer base and all the college students and their families. They’ve kept us going.”

Family counts for him. The couple’s oldest son, Nathan, is now the vegetarian restaurant’s head chef.

Today, Sustick says, it would probably be a lot harder to open a restaurant of the same size and make it work.

“If you look at a lot of the newer places in town, they tend to serve coffee or alcohol, maybe a little food as window dressing,” he said. “It’s not an easy business.”

Luz says he’s also concerned about the Massachusetts Senate’s proposal to raise the state’s minimum wage to $11 an hour by 2016. The plan also calls for more than doubling the minimum wage for tipped employees like waiters from $2.63 an hour to $5.50 an hour. Luz says wait people earn most of their wages from tips and in Massachusetts average $13.13 an hour in overall income — the highest figure for wait people in the country.

Given that state law already requires restaurant owners to pay wait staff the minimum wage (currently $7.25 an hour) if they earn poor tips on a slow day, Luz believes the Senate’s plan could send Massachusetts restaurants back into a tailspin by making operating costs much higher.

“It’s something we’ll have to watch closely as the House takes up the bill,” he said.