New York City’s restaurant industry slimmed down in 2012, ending the year with fewer openings and flat revenues, according to analysts and hospitality execs.
“We had expected a better year coming out of the recession,” admitted a disappointed Jeremy Merrin, founder and president of Havana Central, the casual, full-service Cuban restaurants with Manhattan locations in Times Square and on the Upper West Side. “We can’t explain what has happened.”
The slide in New York’s culinary appetite was most pronounced after the summer. That directly followed two straight years of strong business growth after the 2008 downturn. Havana Central, for example, saw substantial increases in customer activity in 2009 and 2010.
NY Post: Tamara Beckwith
NOT-SO-GRAND ‘CENTRAL’: Dyana Ramirez samples the frozen coconut lemonade at Havana Central, which had a so-so year in NYC.
But then the slide really picked up momentum. “Most in the industry had expected things to weaken through the entire fall,” Merrin said. “My Christmas season does not feel as strong as last year.”
That’s a common view across New York City’s assorted collection of 24,000 restaurants. And it likely explains the slowdown in restaurant openings.
The number of restaurateurs locally seeking permits is likely to dip from last year. At the current rate, the final 2012 number issued by the city Department of Health could decline 5.7 percent, or 270 short of last year’s 4,723 total. As of Nov. 30, there were 4,082 permits issued, including the typical 300 or so annual renewals, resulting in a 2012 annualized tally of some 4,440.
There’s talk within the sector that as ObamaCare became a reality, openings and expansion plans were put on hold until the cost structure of the plan was cemented.
A strong start to 2012 probably saved the entire year from disaster. “Overall, the hospitality industry has stayed stable this year in New York,” said Andrew Rigie, executive director of the New York City Hospitality Alliance.
It reflects a broader national trend. The US restaurant industry opened on solid expectations this year — which then melted away faster than an ice-cream sundae. Weaker spring and summer quarters led the industry into a lackluster-though-“stable” year, according to The NPD Group.
Rigie noted that Hurricane Sandy walloped many restaurants in New York. “It caused damage to many restaurants, or put them out of business,” he said. And, as Merrin noted, “we lost two good weeks of sales.”
Some local restaurateurs say onerous regulations are also contributing to a disappointing environment. “If the fines were not as expensive, that would help,” celebrity chef Marc Murphy, owner of the fashionable restaurant chain that includes Landmarc in TriBeCa and in the Time Warner Center, told The Post.
In any event, Murphy doesn’t think 2012 will be one for the record books. “We thought things were going to get a little bit better this year. Unfortunately, they weren’t as good as we wanted them to be,” he said.
Murphy added that activity at his four restaurants, which includes the stylish Ditch Plains, was “stable,” or unchanged since last year. The one bright side: His 2-year-old catering business, Benchmarc Events, saw business volume skyrocket 40 percent.
Merrin at Havana Central said he’s perplexed by the recent slowdown. “I don’t know if this is specific to the East Coast, or because consumers are very nervous with talk of the fiscal cliff and unemployment relatively high,” he said. “We walked into the season believing we would have a very strong season. And that didn’t happen.”
Visits to restaurants nationwide were up 2 percent in August and then dipped in September, says NPD, which forecasts that restaurant industry will end the year “flat,” with spending up 2 percent.
“While the restaurant industry basically recovered from last year’s traffic declines, a sluggish economy and continuing cost consciousness on the part of consumers kept the industry stable but not growing,” said Bonnie Riggs, NPD’s restaurant-industry analyst.
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