<< Previous   of   Next >> Associated Press  (click to enlarge) Sean and Julia O'Connell have dinner in their Fox Chapel, Pa., home with their children, Violet and Emmett. The O'Connells have saved more than $150 a month by cutting back on dining out.

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Eating in tough on eateries

Consumers are dining out less often, causing restaurants to trim costs and juggle menu options

Associated Press

MILWAUKEE -- It's a few days before Mother's Day and Robert Jenkins jumps every time the phone rings.

He's got about 220 reservations at his Cajun-style restaurant, Bayou, for brunch today. Last year, he had 300 reservations -- but with the economy sagging, business is down.

Like many in the industry, he believes that love for Mom will trump fears about the economy. So when the phone rang last week, he was hoping it was someone booking a spot in his 115-seat dining room overlooking the Milwaukee River.

"You have high expectations and this is one of those markers that you have that you need to perform well on," said Jenkins, who owns the restaurant with his brother.

Mother's Day is the restaurant industry's busiest day of the year. If the holiday doesn't go well, profits could be affected for the rest of the year in what's already been a tough environment. Though Americans are projected to spend more than $1.5 billion each day this year at restaurants, many are pulling back in the wake of rising gas and food prices and shaky job markets.

Families such as the O'Connells outside of Pittsburgh are trying to eat at home more often. This includes skipping an annual brunch at the Casbah restaurant on Mother's Day on Sunday and attending a cookout with family members instead.

Julia O'Connell said she and her husband want to make cuts as other expenses rise. Instead of eating out two to three times a week near their home in Fox Chapel, Pa., they limit trips for them and their two children to Friday nights, shaving their monthly restaurant bill from $400 to less than $250.

"When we sat down and really started thinking, 'Where is the money going?' it hadn't occurred to us we could go out to dinner and drop $50 easily," said O'Connell. "It was ridiculous."

Americans spend nearly half their annual food budgets in restaurants, says the National Restaurant Association, which has 380,000 members. Sales are expected to hit $558 billion this year, but the growth rate is slowing. This year they're predicted to grow 4.4 percent from 2007. That's slower than the 2007 growth of 4.6 percent, and 2006's rate of 4.7 percent.

Areas hard hit by the housing crisis and job losses, such as Michigan and Ohio, are bracing for sales slower than the national average.

And restaurant owners across the country are trimming their costs -- making smaller, less-expensive menu options to keep customers coming in. While they're raising the prices of certain items, such as beef and grouper, they're offering less-expensive items such as buffalo meat and catfish and even using butter blends rather than pure butter.

Restaurant operators are increasing their advertising, with many using cell phone and web marketing to attract customers for Mother's Day, said Hudson Riehle, the group's vice president for research.

"They're cautiously optimistic and if there's one restaurant special occasion that's sort of the exception to the 'it's the economy, stupid' rule I'd say it's Mother's Day," he said.

Riehle didn't have an exact figure for sales on Mother's Day, but George Van Horn, senior analyst with research firm IBISWorld Inc. estimates Americans will spend $3.51 billion on eating out in full-service restaurants, excluding fast-food places, today. That more than doubles the $1.5 billion average daily spending according to the restaurant association at all types of restaurants.

Van Horn said this year's figure will be up about 13 percent from last year's estimated $3.1 billion. And that number was up 9.5 percent from the previous year's $2.83 billion. People, it seems, don't want to cut back on special occasions such as Mother's Day, Van Horn said.

"There's a lot of things that consumers have, quite frankly emotional attachments to that seem protected, at least for a while, from some of these budget pressures," he said.

Jenkins, the restaurant owner in Milwaukee, says business is off about 20 percent so far this year. He's thinking of everything he can to bring customers in. So today, he's giving 10 percent off to all moms on dishes such as eggs sardou, which mixes shrimp, creamed spinach and hollandaise sauce. He's also giving mixed carnations to the first 100 mothers. Last year, though, he offered the more expensive Hawaiian Orchid.

"We're trying every little niche we can without giving away the restaurant to get people here," he said.

But families such as the O'Connells are trying all options to avoid going to restaurants as they look to control costs. O'Connell, who has children ages 3 and 1, will do a cookout with family today. She'll make coconut cream pie and barbecue meatballs. She's not thrilled with having to cook for her own holiday, and says she won't get much help from her husband, whose cooking skills are found on the grill. "See what I make him do on Father's Day, to get him back," she said.