Money – The Ultimate Hammer

Do the rich really get richer? I think they do. And I think the current economic troubles will ultimately result in just that: richer rich people.

I have an illustrative example; and though it’s a tiny detail, it’s something I’ve neither seen nor heard of in my 2+ decades of food serving.

A guest was looking through the wine list at Michael’s, and he asked, ‘Do you have any specials?’ I hesitated, then he jumped in with this story: ‘I was at this other place, looking at the list and there was this older vintage Cab priced at $230. It was a good wine, so I asked the manager, “Would you take $150?” He took a second, and then just said, “Okay.”‘

At that point I recalled the recent addition of a Manager’s Specials page to our wine list. That page has mostly orphan bottles we’re trying to eliminate, but there are also some expensive wines offered at a discount. I told this guest that as a corporate restaurant, we couldn’t make deals like he was describing, but maybe he’d find something on this Specials page. Which he did – a nice Napa Cab for $120 that we used to sell for $150.

I wonder, has this haggling been going on elsewhere and I’ve just been sheltered, or is it just starting up? As I said, I’ve never seen it before. The dynamic I see is that the people who still have money are using it as a hammer. They are kicking a restaurant when it’s down.

Don’t get me wrong. This is obviously nothing more than simple capitalism, and the law of supply and demand. That’s America. Even during boom times there are desperate, failing businesses where wise consumers can get serious bargains. No, I don’t blame the rich.

I’m just observing that as the rest of us scrape and squirm to stay current or avoid slipping too far behind, the rich are further solidifying their strength. In my wine example, I have no doubt that this guest was perfectly accustomed to paying the regular list prices for these wines. However, he can smell the fear in the air – or the blood in the water, whatever you want to call it – and he senses he can get over.

I serve a lot of well-to-do guests at both my jobs. White-haired men with pink faces and expensive watches. They will sit down, order a Ketel One on the rocks, and make friendly conversation with their waiter. Lately, the topic is often the economy. I might offer that it’s been awhile since the downturn started, and we’ve been holding our own, but have seen an uptick lately, and maybe this thing has bottomed out . . .

He will shake his head gravely, slowly. He will sip his vodka. ‘I don’t think so. This is a long way from over. It’s going to get worse before it gets better. I just hope you can hang on.’

Then he will order a $50 steak and $175 bottle of wine, and eventually tip 20% on the whole check.

He says he’s worried, but he doesn’t act that way.

I’ve had that conversation twice, and several others that cover similar territory. It always kind of reminds me of the clichéd movie scene where the avuncular-yet-somehow-menacing loan shark puts his arm on the shoulder of the downtrodden anti-hero. The loan shark offers a sympathetic smile, and the words, ‘You know you’re making a mistake, right? But you’re a good guy, so I’m gonna cover you this one last time. I can’t help it, kid. I like you.’

I feel a little bit like that poor sap is me and my restaurant. We’re going down slow; we can’t do anything to stop it. There are but two conclusions to the saga: 1) We hang on long enough until we are rescued by a rallying economy, or 2) We watch our restaurant bled dry of profits (and viability) as we cut prices until everything is a loss leader, with no positive margins to keep us alive.

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11 thoughts on “Money – The Ultimate Hammer

  1. sara rose Mon, December 7, 2009 / 5:54 pm

    wow! I absolutely hate that story. What’s next? somebody coming in and telling you that since their steak only cost the restaurant ten dollars to make they’ve decided they want to spend twenty on it and not one penny more? If this is our future i’m getting a new job.

    • waiternotes Mon, December 7, 2009 / 8:26 pm

      As you can tell, I found it disconcerting too. Talk about getting squeezed.

  2. waiterextraordinaire Mon, December 7, 2009 / 10:03 pm

    Well the difference between the rich and poor is widening for sure with the middle class disappearing. It is thought provoking your story. The rich hold the hammer but let’s hope they don’t start making the prices on the menu. The rich stay rich for a reason and that is they will always drive for the hard bargain. It is the middle class that will splurge and run up a huge debt.

    • waiternotes Mon, December 7, 2009 / 11:48 pm

      Well said. Interesting that you, WaiterEx, have the same thought as Sara earlier. Is this the next step along the way?

      ‘You have a table for 4 available? Good. I was wondering if you’d be willing to discount my check 10% if I choose to dine with you tonight?’

      Maybe not too far-fetched. What restaurant owner/manager might not consider the merits of sure income vs. none?

      • waiterextraordinaire Tue, December 8, 2009 / 9:24 am

        I don’t want to sound like an alarmist but I think eating out in fine restaurants will only be done by a select few while the middle income earners will eat out less and less. A la carte and fine dining are dying. Just like the tableside service died in the 80’s. Restaurant owners will have to put up with being lowballed so that the few remaining diners will still eat at their establishment hurting profits.With the baby boomers retiring they watch every penny so they will not eat out often. Meanwhile the middle agers will instead party at home with others who have little disposable income. Order in or take out. On another note this year with stricter drinking laws while driving it has all but stopped the Christmas party unless the company provides transportation to and from the event. Why go out if you have to watch what you consume?

        This recession is far deeper than anyone could have imagined and is going to change the way people do things probably forever. But for the rich who have probably made a killing the past year this is the new way of aristocracy. We in North America especially are in big trouble. If this continues we might see a revolt. People are getting frustrated and fed up while others who are full of money continue getting paid bonuses and dividends that they do not even deserve. Money gets more money and along with it power. It is one word and that is GREED.

        Although I am not against the free market system I am not against some socialism. I have to say the free market system usually only works for people who can afford it. For the rest it is a daily struggle to meet just the daily expenses. To be honest I would rather have been born in France and owned a vineyard.lol

  3. Stuck Serving Thu, December 10, 2009 / 1:07 am

    I have yet to see anything that has been described above, I have noticed that while people are still willing to go out, they are definitely ordering cheaper items and tipping less. This is a really cool site, would you be interested in linking up?

    • waiternotes Sat, December 12, 2009 / 5:04 pm

      Dear Stuck Serving, thank you for the compliment. Yes, I would like to link up with your site. I just spent the last 30 minutes reading up on some of your stuff. Good reads!

      I’m not interested in your terms of your owning anything posted to your site. I would allow you to post with full attribution and links to my site and the original post.

      Or else you just want to exchange Blog Roll links? That’s fine too.

      Thanks for the interest.

  4. nativenapkin Fri, December 11, 2009 / 9:46 am

    The old adage of “live by the discount, die by the discount” comes into play here. If you cater to the cheap, that’s exactly who you’ll get. And once prices are lowered/haggled over, very difficult to raise them. All the cheapies that flock to the “deals” will be gone as soon as the deals are.

    Your ending paragraph about restaurants just hanging on until things either get better or they just die (lots of mid-level places are in “Restaurant Hospice”) was very scary in its reality and very applicable to so many operations. A good barometer is if a place that has no business doing breakfast put up a banner in front that says “Now Serving Breakfast”, you get bet the six-month slow death march has begun.

    The wine thing, too, is problematic especially because of “smart phones”. People can go online at the table and see what any bottle of wine on your list is selling for at other places, especially if it has a bar code. A guy in our place the other night had a app for his I-Phone that allowed him to take a picture of a label, then search and find ratings, prices at both on and off sale venues, etc.

    Gone also are the days of bluffing and bullshitting your way through an upsell on wine. You better know your list’s producers and vintages, because if you don’t there is surely an I-Phone app that does and is ready to make you look foolish in the process!!

    • waiternotes Sat, December 12, 2009 / 4:40 pm

      More illuminating data! Thanks. Over the years I’ve grown more comfortable admitting what I don’t know about wines on the list. Most fine restaurants, it’s perfectly plausible to admit that you can’t possibly have tried all (or even the majority of) the wines on the list. I then proceed to tell what I do know. Or better yet, I bluff with the preface, ‘I haven’t had this vintage yet, but I found previous years to be …’

      You’re also cold correct about the Now Serving Breakfast thing. In fact, nearby, a dinner-only/weekend brunch/closed-Mondays place went the full boat about six months ago. ‘Now Serving Breakfast, Lunch, and Dinner. 7 Days A Week!’ And, yes, they’re now closed.

  5. foodserviceninja Mon, December 14, 2009 / 9:39 pm

    check out steakhouse blues blog-extremely well written blog by a GM and his response to “bargaining at the table on pricing-wish I worked for him!

    • waiternotes Tue, December 15, 2009 / 1:02 am

      First of all, FSNinja, nice to hear from you again!

      And, yes, I think I got the Steakhouse Blues blog tip from you in the first place. I’ve read every single post.

      . . . though I don’t recall anything about bargaining at the table. Send me the link, unless it’s the most recent post. In which case, I’ll catch up on it anyway.

      Yes, you’re right. I love his blog, too. Can’t wait to see how it comes out!

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