We're Getting Priced Out of the Restaurants We Love
What it means when $26 cocktails, $42 lobster rolls, and $1,000 dinner dates put your favorite New York splurges further out of reach
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Those Expensive Restaurants Probably Aren’t Going to Get Cheaper
If the stratospheric cost of living in New York has gobbled up your emergency “let’s go out for a prime rib and a martini” budget, there are some positive developments on the affordability front. Some.
Gas prices have been falling for the past two months. Airfares are down. Online retailers have been luring customers with discounts. And while folks are still feeling serious pain at the grocery store, egg prices are finally dropping back to normal levels. That’s not nothing.
But if you’re hoping for discounts at a pricey steakhouse or a tasting menu joint, I’ve got less pleasant news. The cost of dining out is going to stay quite high. Sorry.
Successful restaurants generally don’t get cheaper. That’s true even as the government reigns in historic inflation, and as owners finally cut back on price increases.
Perhaps that’s an obvious point to folks who dine out a lot. You never hear a place like Minetta Tavern announce that it’s going to discount the entire menu, or even a few rib steaks! Deal apps (like this one) might come and go, but the unforgiving economics of running restaurants makes meaningful, long-term price reductions quite difficult.
Still. The price hikes of the past two years — especially at hip or fancy spots — have been particularly intense, making a splurge-y night out a serious financial stretch for a lot of folks. That’s all the more true for residents (like me!) who’ve faced some combination of massive rent increases, resumed student loan payments, meager raises, corporate layoffs, and electric bills that look like white truffle supplements.
This is an era when omakases have gone up by hundreds of dollars, with sushi dinners for two clocking in at $1,000…before wine! This is an era when your beloved Korean barbecue spot has raised the minimum party size for most tables to four; that means you have to round up more friends who want to shell out $140 or more to dine there. This is an era when you avoid checking out that cool new chef’s counter spot because you need to pay $418 upon booking. Want to cancel? Sorry, no refunds.
Or maybe you walk into that new bar in Greenpoint and find out a glass of white and a small tin of fish will easily cost you $40.
Some of these increases are simply the unfortunate byproducts of living in one of the world’s most expensive cities. And yet sometimes it feels as if more and more operators are saying to themselves: let’s go “whale hunting.”
If one of the tragedies of the pandemic was watching over 1,000 local restaurants shutter, one of the the pangs of our current era is walking by a crowded culinary establishment and knowing you can’t go there as often — or maybe not at all — even as well-heeled diners fill up those same rooms.
In New York, the rising cost of dining out is forcing a lot of us to rethink our relationships with the establishments that that feed us, that inspire us, and that make us a little less lonely. This is an era when becoming a regular, or even going to a nice restaurant once a year, can feel like an unattainable luxury.
Understanding Real Wages and the “Pivot to Rich”
As New York continues to move further away from the worst of the pandemic, I’ve made sure my food critic eating keeps pace with the city’s recovery.
But like other locals facing cost of living increases — getting laid off doesn’t really help your savings account — I’ve been cutting back on certain “non-professional” dining activities.
I nixed postprandial cocktails from my nightly routine a few years back, saving me quite a bit of money every month (I sleep better too). More recently, I’ve switched to sandwiches (versus pricier mains) at my local Cuban bar. I’ve also cut back on my pizza habit. Yeah, that one hurts, but $15 for two slices and a coffee is a tough daily charge when your health insurance costs jump by $700 a month.
I’m not alone in this regard.
A recent survey by the TransUnion credit agency reported that nearly one-fifth of households plan to spend less on restaurants through the end of the year. And a separate Bank of America survey found that 43 percent of Gen Z folks have been cooking at home more rather than dining out. The stated reason in both cases? Prices, prices, prices.
Restaurant prices across the country crept up by about 11.3 percent during the four years before the pandemic. Since February 2020, however, the cost of eating out nationwide has gone up by a whopping 24 percent, far outpacing overall inflation.
What do those price increases look like in New York? Here are a few particularly wild examples:
A shrimp cocktail will end up setting you back $34. It’s just a snack!
A highball or shaken drink, the type of refreshing beverage you can knock back in a few minutes, can easily hit $19 or more at a hot new restaurant, which makes a $22 slow-sipping martini almost feel like a bargain.
One of my favorite steaks, a gorgonzola wagyu strip at Carne Mare, has jumped from $72 to $135, nearly doubling in price in just two years or so.
The number of fine dining spots where dinner for two will cost $1,000 is way up.
And perhaps you’re wondering why I’m spending $15 on a pizza lunch? Well that’s because slices that run $5 are increasingly common, if not necessarily prevalent (the average price citywide was a steep $3.13 last year, per Bloomberg)
Now, are there cases where restaurants are taking excess profits even after inflation has been accounted for? Surely. And let’s be honest no one really needs to charge $1,000 for dinner. But for the most part, restaurants raise prices because they need to. They raise prices to make up for lost revenue during COVID, to grapple with insane beef prices, and to cope with high labor costs due to an exodus from the industry.
Scores of New Yorkers, for better or for worse, have accustomed themselves to a lot of this — to cocktails priced like burgers, main courses priced like short tasting menus, and omakases that are more expensive than personal computers. And just as life finds a way in “Jurassic Park,” at a certain point a young lawyer will find a mental path to accepting that a martini at The Grill is going to cost, like, $26 before tip, especially if it means numbing the pain of an 80-hour work week.
Problem is, not all of us are young lawyers or financial analysts. Indeed, part of the equation lies with real wage growth, a statistic that tells us whether our raises are really making us wealthier given how damn expensive everything is. Real wages — despite recent gains — have generally stagnated for most workers over the past 40 years. That’s bad.
One percenters, by contrast, have seen real wages go up quite dramatically. And as a rule, rising inflation doesn’t really have a meaningful impact on your life if those golden osetra caviar bumps (for four!) make up just a tiny portion of your $250,000 salary. This is why, I reckon, you’re seeing more fancy Carbones than affordable Parms opening across the country these days. This is also why a tasting menu that runs $300 at a brand new restaurant, a relative rarity a decade ago, has become normal over the past five years. This is the Pivot to Rich.
But when you have an entry-level job in publishing and can barely cover your monthly expenses, this inflationary reality is why you maybe don’t check out that chic new Nordic spot in Greenpoint. You probably don’t go back to (the excellent) Shuko or Atomix either, where the chef’s counter prices have effectively doubled since those venues opened in 2014 and 2018, respectively. That’s also a Pivot to Rich.
Just think about that for a minute. Going to a Broadway show is far from cheap, though you probably won’t be priced out of “Hamilton” or “Chicago” tickets entirely when you return five years later. But at a few of the city’s most high-profile tasting menu spots, the price of your old dinner for two might now equal the price of dinner for one. Psychologically, that type of increase is tough to reconcile with the blissful emotion you want to feel after a spendy meal, which is: “That was so worth it.”
There’s a lot to critique about the world of fine dining, from kitchen culture to staff compensation, but one argument you can add to the hopper is that it sometimes seems as if the wealthy diners — with wealthy friends — are the only ones who can reliably afford to watch a fancy restaurant age over five years or more.
To the Rescue: Affordable Tasting Menu Spots…Until They Get Pricey!
When folks are tight on money, they tend to do something called trading down, a phenomenon (and slightly condescending term) that refers to folks buying cheaper or buying less. A famous case study comes from right before the Great Recession, when Target, one of the “fancier” discount retailers, was experiencing much faster same-store sales growth than its juggernaut peer, Wal-Mart. But when consumers became more price sensitive during the downtown, those fortunes flipped.
There’s no recession right now, thank goodness. But I recount this tale to suggest that the abundance of $500 menus surely helps fuel our ongoing boom in sub-$120 tasting menu venues, neobistros, and small plates places. Good operators know cash-strapped diners still want to enjoy one of the city’s greatest pastimes: eating out.
So let’s take a look at Cosme.
Enrique Olvera’s New York flagship, from its inception, proved to New Yorkers that fancy Mexican fare could command as much money as chic European venues. I still dine there as much as I can, but it’s been a heck of a thing to watch the restaurant’s prices go through the roof over the years. The nice consolation price, however, is that Cosme’s graduates have branched out to open more accessible establishments like Aldama and Ensenada — easily two of the city’s best new Mexican spots. Does this count as trading down? Maybe financially, but certainly not culinarily!
The same could be said of Jungsik and its own alumni network. As the Modern Korean spot rose in price after launching in 2011, ex-chefs from that posh venue have opened heralded tasting menu venues like Jua — and the avant-garde pastry shop that is Lysée.
It’s tempting to say this informal life cycle is what keeps dining out in New York fresh and new. Younger chefs at more established venues break out on their own to do something more accessible (and to make a name for themselves), and consumers flock over to save a few bucks and check out the cool new joint. Indeed, Brooklyn Fare and Torrisi, in their early days, felt like affordable reactions to the excesses of the aughts, but they eventually ended up transforming into (admittedly excellent) high-roller joints.
And that’s how it goes. The inevitable evolution of certain ambitious spots involves shifting from a cash-saving clientele to a more moneyed crowed, and these type of realities make me a bit nervous for how long we’ll have until the next Pivot to Rich.
At least our city’s casual neighborhood spots aren’t in the business of nearly doubling their prices every few years. Then again, that’s likely because late-night diners and local taverns can’t rely on the type of business clientele (or destination crowds) to charge what they should really be charging. We’ll only be able to grow old with those places as long as they can stay in business.
It’s also worth keeping in mind that the sky isn’t the limit on restaurant price hikes. Eleven Madison Park, having raised the cost of dinner by 20 percent when it got rid of no-tipping, now offers a cheaper $285 menu in the dining room (there are also more affordable menus in the bar area). Chef Guo, the $518 Chinese restaurant in Midtown, debuted a shorter $298 budget menu this month. And Masa no longer offers the standard $950 tasting at lunch; instead the reservations site only lists a shorter $495 option.
It’s a good start, but these deals might not matter to a lot of folks who couldn’t afford these dining rooms in the first place. All of those deals will still end up costing well over $400 per person.
Only in the upside-down world that is modern New York does an $800 tasting for two qualify as a discount. As for me, I’m just eager to enjoy my $5 slices again, and to find a way to stay in my Hell’s Kitchen home. Not my favorite set of circumstances, but hey, at least the situation lets me appreciate every bite of that pizza — and every minute in my neighborhood — as a true luxury. A temporary luxury. A respite…until the rent comes due.
p.s. for a more affordable option from the team behind the very pricey Atomix, allow me to recommend the perennially excellent Atoboy. A four-course dinner is $75, service-included. And the hospitality-included Dirt Candy by Amanda Cohen ($105) is always a good decision.
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