Restaurants adapt to leaner times

Owners Kim Strengari and Marianne Gere are waiting tables and tending bar at their West Conshohocken restaurants Stella Blu and Gypsy Saloon, where they've decided to cut their own salaries in half.

In Center City, Del Frisco's Double Eagle, a pricey steakhouse opening later this month, is adding cheaper wines to its list and is promoting its more affordable bar menu.

And Stephen Starr has hired a chef to develop lower-priced dishes for the menus at his restaurant empire.

"Everyone I talk to is saying their business is 10 to 15 percent down from what it would normally be this time of year," said Gere, who is earning tips to supplement her salary. "I think people are afraid to spend their money. They don't know what is ahead."

As their high season approaches, restaurateurs are fighting a harsh economy, higher food costs of more than 15 percent over the last two years, shrinking profit margins, and heightened competition for fewer diners. The National Restaurant Association says these are the toughest economic circumstances restaurants have faced in nearly 20 years.

Want a table? Pick a weeknight. Dinners are particularly quiet early in the week virtually everywhere, and lunchtime in Center City has also slowed. Weekends are still fairly busy. With soft sales and empty seats, most restaurateurs are responding with discounts to build traffic - following the theory that shrinking profit margins can be eased by higher volume.

At Coquette bistro in Queen Village, owner Cary Neff has lowered entree prices and knocked 50 cents off his already-reduced happy-hour oysters; they now go for $1 apiece.

Fast-food restaurants are keeping their low-profit dollar menus. (Subway is touting its $5 foot-long sandwiches, $1 less than a year ago.) Philadelphia's internationally known independent BYOBs - which can't profit from marked-up drinks - are extending their $30 and $35 promotions well beyond the "restaurant weeks" that have sprung up in Center City, University City and South Jersey. OpenTable.com, the reservation service, is marketing the "Appetite Stimulus Plan," a $35 dinner and $24 lunch promotion from Nov. 17 to 21, to drive traffic.

Although it may seem sacrilegious to shrink portions in this supersized America, some restaurants now push "small-plate" menus - which in some cases are a third the size of a main plate but are priced only 25 percent less.