Critical Mass?

[JohnL]

There seems to be a tendency to focus on restaurants that fail (and the more spectacular failures at that) rather than the myriad places that have survived and thrived over a long period of time.

My guess (using common sense) is that of the places that have failed, many have failed for reasons other than over saturation.

I do not believe that anyone has presented any compelling evidence to support this theory of over saturation leading to high end restaurant failures in New York.

Therefore, I would posit that Manhattan is not over saturated with "high end" restaurants. Rather it is a very dynamic and fluid restaurant scene with plenty of opportunity to succeed in all price ranges (not just high end). It is also a very difficult place to operate a restaurant and the success rate has always been relatively low. i would further posit that of all the reasons restaurants fail here, over saturation is relatively low on the scale.

[Todd36]

1.  To me, high end restaurant means I have to spend in excess of $200 a person for food and modest drink. That is a short list of restaurants, less than 50 in Manhattan and perhaps less than 25.

By that definition, Per Se is the only non-Japanese high-end restaurant in New York. I think you've simply set the bar too high. The right figure is more like $125-150.

I think the wrong question is being asked.  What should be asked is: why is it so hard to spend over $200 pp on food in NYC?  It's easier in Paris or Tokyo and my one London steak house experience made Sparks look as cheap as McDonald's.

Tokyo and London are simply more expensive, and have been for a long time. (I haven't been to Paris recently, so won't comment.)

I can get three courses plus two glasses of wine plus tax and tip at Daniel for under $200 pp.  Strange isn't it?  Probably a 5:1 ratio between the price of a full meal at a modest place, say $40 all inclusive and $200 at a four star.  That's the amazing thing to me, small range of restaurant prices as comapred to say apaprtment prices, which operate in something more like a 100:1 ratio.

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Aparments are scarce, but restaurants are plentiful. Indeed, New York has far more restaurants than it needs, which is partly why so many fail. Even at successful restaurants, you can generally get a table at reasonably short notice, which certainly isn't true about successful apartment buildings.

You also need to consider that an apartment is something you possess, while a restaurant meal is a transitory experience. I think the price ratios (most to least expensive) for other transitory experiences, like professional theatre and sporting events, are closer to 5:1 than 100:1.

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I can't get dinner at Daniel or Jean Georges or Bouley or quite a few other places with a drink and tax and tip for $125. The prix fix alone is at least $90. $200 is the minimum for the full dining experience for that kind of place, I eat out in that kind kind of place close to ten times a year.

Sporting events can run 20:1 or more, for things like NBA tickets on the floor. There is also a wider range at some cultural events, tickets at the Met Opera can range from $30 to $300 at the same performance and the better tickets cost more than that, you need to belong (donate $$$) to the Met Opera Guild to get them (I have season tickets). There is still a remarkably tight range for restaurants. Consider that places like Daniel have bottles of wine that cost over a $1,000. Wine is a transatory experience.....

[oakapple]

I can't get dinner at Daniel or Jean Georges or Bouley or quite a few other places with a drink and tax and tip for $125.  The prix fix alone is at least $90.  $200 is the minimum for the full dining experience for that kind of place, I eat out in that kind kind of place close to ten times a year.

What I suggested is that the dividing line between the top 25-50 restaurants, and the rest of the world, is more like $125-150. There aren't 25 restaurants in the Daniel/JG class. Originally, I didn't realize that you were including tax and tip. On that basis, I think the dividing line is more like $150-175.

Sporting events can run 20:1 or more, for things like NBA tickets on the floor.  There is also a wider range at some cultural events, tickets at the Met Opera can range from $30 to $300 at the same performance and the better tickets cost more than that, you need to belong (donate $$$) to the Met Opera Guild to get them (I have season tickets).

Right, but it's not 100:1, which was your earlier point of comparison. We'd probably need to analyze a few more categories to determine whether restaurant pricing is really as out-of-whack as you're suggesting.

There is still a remarkably tight range for restaurants.  Consider that places like Daniel have bottles of wine that cost over a $1,000.  Wine is a transatory experience.....

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I think it gets back to supply and demand. When a wine bottle costs $1,000, it's because there's a limited amount available at that quality level. But I can get into Daniel almost any time I want.

[Sneakeater]

I agree with Todd that one problem I have with restaurants in Manhattan is that they just aren't expensive enough.

[Todd36]

I can't get dinner at Daniel or Jean Georges or Bouley or quite a few other places with a drink and tax and tip for $125.  The prix fix alone is at least $90.  $200 is the minimum for the full dining experience for that kind of place, I eat out in that kind kind of place close to ten times a year.

What I suggested is that the dividing line between the top 25-50 restaurants, and the rest of the world, is more like $125-150. There aren't 25 restaurants in the Daniel/JG class. Originally, I didn't realize that you were including tax and tip. On that basis, I think the dividing line is more like $150-175.

Sporting events can run 20:1 or more, for things like NBA tickets on the floor.  There is also a wider range at some cultural events, tickets at the Met Opera can range from $30 to $300 at the same performance and the better tickets cost more than that, you need to belong (donate $$$) to the Met Opera Guild to get them (I have season tickets).

Right, but it's not 100:1, which was your earlier point of comparison. We'd probably need to analyze a few more categories to determine whether restaurant pricing is really as out-of-whack as you're suggesting.

There is still a remarkably tight range for restaurants.  Consider that places like Daniel have bottles of wine that cost over a $1,000.  Wine is a transatory experience.....

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I think it gets back to supply and demand. When a wine bottle costs $1,000, it's because there's a limited amount available at that quality level. But I can get into Daniel almost any time I want.

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We're not very far apart on price. Wine can probably hit a 100:1, I've seen bottles over $5,000, which is less a question of qualtity and more one of prestige. That's one of those things that makes me wonder. I can walk into Daniel and spend $2-3000 per person on wine without difficulty, no supply and demand problem at all, just walk in and spend money. But I can't walk in and spend $1000 on food at Daniel, not on anything on the menu. That $5,000 bottle of wine is on the normal wine list.

[Todd36]

I agree with Todd that one problem I have with restaurants in Manhattan is that they just aren't expensive enough.

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My pay is so high that my I'm upgrading my solid gold flatware.

No, I'm not complaining about things being not expensive enough. But why is food fairly cheap, and compressed into a narrow price range? I can buy a $500 Charvart shirt at Bergdorf or a $20 store brand at Macy's. Both are off the rack, 25:1 ratio. And no, they are not for a lifetime. If a men's dress shirt survives more than 50 washings, you're lucky. Lots of things are available in a broad price range, but not restaurants. The top end is actually fairly low when you think about it.

[Fat Guy]

I recently did a TV show about the world's ten most expensive menu items. I assure you, there are plenty of things you can spend a lot of money on. For example, at Norma's at the Parker Meridien, you can get the "Zillion Dollar Lobster Frittata," which comes with ten ounces of Sevruga caviar (and a whole lobster) for $1,000. Says on the menu, "Norma Dares You to Expense This." Also ringing in at $1,000, the "Grand Opulence Sundae" at Serendipity. It's made with Amedei Porcelana chocolate, a Ron Ben Israel-designed gold-covered sugar flower, and Grand Passion Caviar -- a dessert caviar. At Petrossian, it's $7,600 a kilo for the Imperial Special Reserve Persicus Iranian Caviar. Needless to say, you can easily spend all you like on truffles. At Knipschildt Chocolatier, in Conneticut, it's $2600 a pound for truffle truffles (a whole black perigord truffle covered in chocolate). They'll be happy to sell you all you like. You can spend a pretty penny on Kobe beef, on abalone, whatever . . . there are opportunities aplenty for those who want to spend more on food.

[Todd36]

I recently did a TV show about the world's ten most expensive menu items. I assure you, there are plenty of things you can spend a lot of money on. For example, at Norma's at the Parker Meridien, you can get the "Zillion Dollar Lobster Frittata," which comes with ten ounces of Sevruga caviar (and a whole lobster) for $1,000. Says on the menu, "Norma Dares You to Expense This." Also ringing in at $1,000, the "Grand Opulence Sundae" at Serendipity. It's made with Amedei Porcelana chocolate, a Ron Ben Israel-designed gold-covered sugar flower, and Grand Passion Caviar -- a dessert caviar. At Petrossian, it's $7,600 a kilo for the Imperial Special Reserve Persicus Iranian Caviar. Needless to say, you can easily spend all you like on truffles. At Knipschildt Chocolatier, in Conneticut, it's $2600 a pound for truffle truffles (a whole black perigord truffle covered in chocolate). They'll be happy to sell you all you like. You can spend a pretty penny on Kobe beef, on abalone, whatever . . . there are opportunities aplenty for those who want to spend more on food.

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I would bet some money that if you tried ordering that at Norma's. you might have to wait a while for it to come........doubt that they keep the ingredents around at all times. In any case, my point was not whether you could find custom or weird ways to spend money on food, it was whether normal menus get very expensive, and they don't. People think that Per Se at over $300 pp is very expensive. Frankly, its not. There are plenty of people in this town who spend $1000 pp for tickets at the Met (donation required to get the tickets) and then take a $500 limo ride back to Westchester. There are people who think nothing of spending $1,000 a night or more on entertainment in NY. Ever seen Jazz at the Caryle? With their cover and drink minimums, it approaches a $100 pp per hour. So why do we think $300 pp per person for dinner is so high? Much less $200.

[Fat Guy]

It seems to me that Norma's and Serendipity are pretty normal restaurants, and while you need to order the Serendipity item in advance you can definitely walk into Norma's tomorrow morning and order that frittata. I also don't quite understand why you're counting out things like wine, caviar and truffles. Those are the things rich people add to the base meal to make it the equivalent of the more expensive seats at the opera. I've been to Aureole and spent like $250 on dinner for two when I was paying, and I've been to Aureole with a really rich guy who started us with caviar and ended with Yquem, and I believe it was about $6,000 for six people.

[Todd36]

It seems to me that Norma's and Serendipity are pretty normal restaurants, and while you need to order the Serendipity item in advance you can definitely walk into Norma's tomorrow morning and order that frittata. I also don't quite understand why you're counting out things like wine, caviar and truffles. Those are the things rich people add to the base meal to make it the equivalent of the more expensive seats at the opera. I've been to Aureole and spent like $250 on dinner for two when I was paying, and I've been to Aureole with a really rich guy who started us with caviar and ended with Yquem, and I believe it was about $6,000 for six people.

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Wine is the perfect counterexample to my question. You can walk into basically any starred restaurant in NYC and find a $50 bottle of wine (Per Se doesn't I believe dip quite that low). You can walk into basically any three or four star restaurant in NYC and find a $1,000 bottle of wine. In fact, finding a $5,000 or $10,000 bottle of wine in stock and ready to order isn't very hard. That's a 200:1 price ratio. It's tough to find a three course meal in NYC with a drink, tax and tip for less than $40. It's tough to find a three course meal in NYC with a drink, tax and tip for over $200. Even if you order truffles and caviar, it's tough to spend much more than $500 per person. Sure, there are ways you can spend more if you do things no reasonable person will do (I'll take 20 pieces of toro and a pound of caviar please), but except perhaps for Per Se and Masa, there are no restaurants in town that are designed to create food checks that exceed $500 pp on a regular basis. If you think about how much money people have in this city, and their willingness to order very expensive wines and to spend large sums on transitory experiences, $500 pp on food doesn't seem like a lot, and even that sum is only about 10 or 12 times the food cost at say a one star. It's not a large ratio. Also, things like Caviar and truffles (like wine) are fairly price stable restaurant to restaurant, that pound of caviar at Eleven Madison Park and Per Se may very well cost the same. They also don't require much cooking skill to serve, the caviar in particular.....

[Todd36]

Or put another way, tell me which restaurant has the following option on its menu:

"Chef's choice, 5 courses $2,000 pp. Our finest dishes of the day, using our best ingredents. Prepared only by the best elements of our kitchen staff, including hands out work by the Chef."

Now maybe if you call, you can arrange that at say Daniel or whatever, but which restaurant has that on their menu? Mind you, I'm going to work today with at least 20 people who made in excess of $5 million last year, and by working with, I mean I will speak with them...... a $2,000 pp dinner for them is like a $50 pp dinner for a first year associate at a law firm....so where's that $2,000 pp dinner on the menu?

[Fat Guy]

You've created a number of artificial distinctions to support a narrow proof. Wine doesn't count, caviar doesn't count, truffles don't count, private dining doesn't count -- the only thing that would satisfy your test would be an on-menu $2,000 per person dinner offering that requires no advance arrangement and includes no caviar or truffles; all other examples are exceptions. No, that exact menu feature doesn't exist, and the fact that it doesn't exist is neither interesting nor proof of anything. Because you can easily spend $2,000 per person for dinner. It's not the slightest bit challenging to do so. People do it every day. They just don't do it according to the model you've invented to prove whatever point you're trying to prove.

[oakapple]

What Todd has demonstrated is that, in terms of the printed menu prices at restaurants, the high-to-low ratio is in a narrower band than it is for things like apartments and wristwatches.

My reaction is: okay, so what?

[Fat Guy]

He hasn't demonstrated that. What he has demonstrated is that if you ignore parts of the printed menu then you can prove that point. For example, if you ignore the part of Aureole's printed menu that says:

Organic Spanish 'Beluga' Caviar

$595.00 supplement per 60g

with traditional garnish

Or if you ignore the part of Norma's printed menu that says:

The Zillion Dollar Lobster Frittata

Super size 10oz Sevruga Caviar 1000

Norma Dares You to Expense This

And if you ignore everything printed on the wine list.

[bigkoiguy]

Actually, what we have now is more like the reverse. Per Se, Masa, Buddakan, Morimoto, Lonseome Dove, Gordon Ramsay, Craftsteak, L'Atelier Joel Rubuchon --- all clones of concepts first developed successfully somewhere else.

Interesting.... This makes me think the smaller cities -- desperate for good food -- might be better incubators for young and upcoming chefs than highly competitive markets.

[oakapple]

Actually, what we have now is more like the reverse. Per Se, Masa, Buddakan, Morimoto, Lonseome Dove, Gordon Ramsay, Craftsteak, L'Atelier Joel Rubuchon — all clones of concepts first developed successfully somewhere else.

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Interesting.... This makes me think the smaller cities -- desperate for good food -- might be better incubators for young and upcoming chefs than highly competitive markets.

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Yes, but the cities in which the above concepts originated weren't exactly "small cities." Buddakan and Morimoto originated in Philadelphia, Gordon Ramsay in London, Craftsteak in Las Vegas, L'Atelier in Paris, Lonesome Dove in either Dallas or Houston, Masa in L.A., and Per Se slightly north of San Francisco. Those are all major international cities. Edited October 22, 2007 by oakapple (log)