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How bad off is the restaurant industry?

I live in coastal NC and so this is always a quiet time of the year. But I'm not sure if I'm being overly paranoid or if there are really no people dining out anymore. We try to dine out once a week, always at an independent restaurant, never fast food, usually higher end. Lately we have had occasions where we are the only table in a restaurant! I see plenty of cars parked at the Applebee's and Texas Steak House type places, but I don't eat there so maybe the parking lot is deceiving and they are quiet as well. But certainly the quality restaurants around here are hurting. And I though we in NC were fairing relatively well in this horrid economy. What are other people experiencing around the country?

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  1. We were at a major shopping center today and decided to grab a quick bite at IHOP, which is usually packed crazy. Well, it was about 2/3 empty, so guess that says something.

    1. Judging from last night's dinner at upscale Greek restaurant in suburban SF Bay Area, couldn't tell there was a recession. Four of us were there to celebrate DD's 10th birthday & the place was packed to the gills. Hec, Sunday night and it was POURING! Surely our fine dining has curtailed to only special occasions. Then again...


      1. Several places I frequent have raised prices a little but still seem to be doing good business - but these are generally pretty cheap to begin with. My sister is a waitress in Austin and has seen her tips cut in half since summer through a combination of fewer customers and smaller checks.

        1. In the STL, the restaurant industry as a whole is hurting. I run a rest. Not a national chain, but the owner has several in this state, and in a couple others. We don't have a national chain finances behind us. I just had a sandwich shop close 2 weeks ago that was next door. Without details, what I can say is, food costs in general have gone up close to 40% since last spring. Combined with less traffic, and people paying more attention to what places have good specials advertised, it is a tough go right now. We need to have moderate price increases, the owner hasn't been on board with that, but is slowly starting to see the light. This company has had only 1 price increase in 5 1/2 years, so it is time. We can leave our price leaders alone, but seafood and other high-cost "specialty" items can handle a small price jump. And right now, the public understands. They may not like it, I don't as a customer sometimes, but I understand why. As long as we treat our guests right, they will still come. That is what bleeding restaurants need to look at now, change suppliers without hurting quality, or raise prices.

          1. Great question. This has been on my mind a lot lately as several places near where I live in the suburbs of Philly have locked their doors. Even the Ruby Tuesday's in our mall has gone dark with no sign or anything.

            1. In New York, food costs have gone up a bit and combined with decreased traffic are beginning to hurt the high-end restaurants. It can be tough to raise prices to cover costs here, because competition is pretty fierce.

              If this downturn keeps up, I suspect that the middle tiered and lower tiered will become more adversely affected.

              Just looking at the job boards here, for this time of year have been off by 30-40% for restaurant work.

              1. I am the chef of a mid-level upscale restaurant in Minneapolis. Our sales in October were 30% below the previous October, it has rebounded a bit since then but not by much. Almost everyone else seems to be in the same boat. Most restaurants here are in survival mode which means slashing labor among other things, I don't like this because when we are unexpectedly busy we don't have the staffing to take care of the customer the way I would like but we have no other choice if we want to make it. I don't think the market can take higher prices because demand is so weak.

                We have been slammed so far this week so hopefully we will turn enough of a profit in December to get us to patio season in the spring which is when we make most of our money. We weren't showing our best but hopefully any customers we might have lost will be balanced by the fact that some of our competition will probably be gone by spring. It is a dangerous game to play though.

                We have been getting more unsolicited resumes than I have ever seen before. Last month I was offered a $500 bribe from a line cook who wanted a job, I have never heard of such a thing before. Maybe that happens in New York but not here. So yeah, times are tough.

                1. I'm in coastal NC like the OP, and although I live in a faily affluent area the restaurant business here is already suffering badly. Rumors about restaurant closings are rampant -- everybody's business is down significantly from last year. Even the food reps are complaining, and that's a really bad sign.

                  1 Reply
                  1. re: chefbeth

                    In the last six months, most restaurants I know are down about 30%, and accordingly so are food reps, brokers, wholesalers etc.

                  2. We here in Brooklyn are trying to keep our neighborhood favorites going, but I expect that many of them will go under by next spring (once everyone is past the holidays, starting the new year's diets, in the colder months of the year, etc).

                    I look at the posts from people looking for wedding restaurants for next September, and I think, "You couldn't pay me to put down a deposit for a Brooklyn restaurant for a September wedding, as the question is: who'll be in business next September?" That's really hard to tell.

                    However, I do have a friend from high school who has a chain restaurant in Dallas (some sort of steak joint, if memory serves) and he says business is actually UP with the recession (it wasn't so hot before).

                    1. We really haven't been going out as much as usual, and when we do we try to frequent local places, not the chains. So this past Sat. we went to a children's Christmas program and afterward needed a quick meal. It was 6:30 and 2 places close by that don't close until 7 or 8 pm. Neither was open. We drove past plenty of Burger Kings, Jack in the Box, etc type places that seemed busy enough, but we went a bit further and found another burger shop that is independent and open. That rattled me a bit. Here in Houston it is getting increasingly hard to recommend a restaurant to people. Between damage from hurricane Ike and the economy they are shutting down left and right. Even stores that have been around for years are gone. Before we head anywhere we have to call ahead and make sure the place is still in business. Learned that the hard way! Driving across town to a business just to find an abandoned building is a real drag.

                      1 Reply
                      1. re: danhole

                        I know how you feel. I cried when I heard Brennan's was gone.

                      2. Here in Chicago, I have not really seen a drop off. The good places are still crowded, and I do not eat at bad places or chains typically so I do not know how they are fairing.

                        I think it would do the industry good as a whole to have the bad restaurants, and many of the chains weeded out.. kind of like the stock market, and real estate markets correcting themselves... for years it seemed like anyone and everyone was opening up a restaurant, with little focus on quality.

                        5 Replies
                        1. re: swsidejim

                          Well, I have to say that, here in NYC, a lot of good places are going to go by the wayside, unfortunately. I agree that we've seen sort of a restaurant glut over the last year, but still, unfortunately even if we all ate out every night (and hey, we used to till the economy tanked), it wouldn't be enough to keep the good ones all in business. Were that it were that simple that the bad ones would fold, leaving the good ones remaining. Unfortunately, a lot of the good ones are going to find it difficult to stay in business, too . . .

                          Like I said, I think the big weed-out period will be January/February, a traditionally slow time. But I shudder to think who'll be left standing.

                          1. re: bebevonbernstein

                            I also worry about who will be left. It'll probably be the places that a) cut quality to keep from raising prices and/or b) have bland "inoffensive" menus to attract the widest possible customer base. I fear that Applebees and the like will prosper and more unique, higher-quality places will end up folding. Not good news for Chowhounds.

                            1. re: mordacity

                              The thing is that the chains are putting out coupons galore, because they can. Take a few bucks off, pass out smaller portions, give free appetizers, and people fall for it. The mom and pop places just can't afford to do that. I spent over $11 to get a bacon cheeseburger, a jr. burger, lrg. tator tots, and sm choc shake at a independent burger shop. I could have gotten the same thing at a chain, with a coupon, for less, but it was the principle of it. But I can't do that often.

                              I had posted an article about the state of restaurants here in Houston in another thread, and in that it stated that the upscale places aren't really in much danger because people who can afford to drop $200-$300 for dinner will still be able to, but people who are struggling will skip appetizers, desserts, or just eat appetizers and skip entrees, so the mid tier places will get hit the hardest. Hence the coupon blitz. The fast food chains seem to be in the safe zone. Scary, or maybe not.

                            2. re: bebevonbernstein

                              I can see some of your points.

                              We are eating out as much as ever, recession or not. I feel that it is the least I can do to help support the places I frequent, and their employees. There also was no shortage of X-mas dinners being bought by our supppliers(even though some layed off employees) this year either, typically about $200 per person at each of these dinners when it was all said and done.

                              I guess it is just wishfull thinking on my part that the only places to be weeded out in the near future will be the chains and mediocre to bad restaurants. I know some good places may suffer the same fate unfortunately.

                            3. re: swsidejim

                              There is still a lot of money in Chicago and there has always been an element of it that's not as affected by bad economics elsewhere, despite that the local pols (YOU KNOW WHO THEY ARE!!!) may say, and the TRIB of course. News reports, etc. about resto business don't concur, but I somewhat agree with you.

                              We're also lucky to have a huge variety of independents here so you can eat good, you can eat bad and still keep it local and reasonable and fun. This vast variety of ethnic places assures it's never boring!

                            4. south Fl is definitely in the doldrums, many places have already closed and others are nowhere near as full as we would expect in the middle of the tourist season. I expect others to close down fairly soon, I would imagine owners will just shut their doors down after the season is over at the end of March because they won't survive next summer if the winter is poor.

                              1. The local Olive Garden is always packed so "dreck" is recession proof.

                                1. Where I live (NE Ohio) the chains are always packed on the weekends just like they always have been, I see TONS of cars in the parking lots. I work a 2nd/PT job in retail and sales have been through the roof. Clearly, everyone is living off their credit cards and disregarding the cautionary tales they hear about layoffs, the economy, etc.

                                  We have also cut back on eating out and now pretty much only get takeout if and when we do go out, so it's hard to advise if the indies are seeing a decline in business since we're basically in and out with our food. However, I know that we have quit trying new places or places we haven't been before because we no longer feel we can gamble on having a bad meal. Where I live, there are a lot of small, indie places that are just bad. In fact, I'd say 8/10 places we try are bad so you get to know which ones are good and just return to those again and again. We are reluctant to "throw away" good money by trying other new places so unless we hear from a lot of people that a place is good that we haven't been to before, we don't go, where we would have previously.

                                  4 Replies
                                  1. re: rockandroller1

                                    When you say that sales are "through the roof" do you mean that sales are comparable or better than the same period last year? I would be surprised if this was the case. Retail sales are down across the board and the sales that being made are on marked down items so the average unit retail is much lower than it was last year.

                                    1. re: KTinNYC

                                      Unfortunately I'm not privy to anything like financial reports or year-over-year sales; everything you read says sales are down, but having worked last holiday season at this same job, I see no difference. It's still lines of people to ring up every time I work and people spending huge amounts of money.

                                      1. re: rockandroller1

                                        I work for a major retailer and I do see the ty vs. ly sales and I can tell you they are down substantially. I have a friend who works at a high end retailer and his sales are also down. Stock was marked down much earlier this year and at a higher rate so AUR is down as well.

                                        If the company you work for is doing better than last year then god bless them and you are certainly fortunate to be working for them in this economy.

                                        1. re: KTinNYC

                                          Like I said, the reports we hear is that sales are definitely down from last year, but my particular store is not only very strong in our state but in our entire region, which encompasses a BUNCH of states, and we are a pretty economically depressed area, which leads me to believe that it's all just CC debt. Scary.

                                  2. People who want quality food (whether in the way it's prepared or the way it's sourced) will be the ones who are cutting down on eating out. A coupon ain't gonna get me into my friend's chain steak joint or Taco Bell no matter how good it is (though in the case of the second, I might change my mind if I'm drunk enough). Nor will someone who really likes or cares about food eat at a chain -- that's not why we/they eat out.

                                    In my case, I'm cooking a LOT more at home. And my friends are having more dinner parties and potluck suppers, which is actually kind of nice. Much more social, cheaper than eating out, and we're all cooking, which, let's face it, is much more fun for a group than our singular selves (and from what I've read, cooking classes and cookware sales are way up). If there's an upside to all this, it's that I am spending much more quality time with friends than I have in a long time, and that's nice.

                                    Again, though, I live in Brooklyn, so my view is quite possibly skewed.

                                    8 Replies
                                    1. re: bebevonbernstein

                                      What you say makes sense, and yet every economist would say you and your friends are making the worst possible decision for the overall economy.

                                      Think about it: unless you exist on exotic fish or fruits, pretty much everything you eat is a US product. Even when you dine out, so long as you're drinking domestic wine, it's pretty much US products. One of the things that caused this economic mess were the enormous trade deficits of the early 2000's, when US consumers bought more from the rest of the world than US companies could sell abroad.

                                      When you eat out, you not only employ celebrity chefs and snooty maitre d's, you also employ waiters, busboys, dishers, prep cooks, etc. The restaurant employs cleaners, waste haulers, etc., and buys all that American produce. Those waiters, busboys, etc. all buy food themselves, pay rent, buy gas, etc. It's called the "multiplier effect" by economists, and the domestic multiplier for a restaurant meal is way higher than the one for a plasma TV from Asia. In simple terms,when you dine out, your money gets pumped into the US economy more fully than buying something from overseas.

                                      As another analogy goes, when Wall Streeters stop taking cabs, the cabbies' income goes down. So instead of taking the family to the movies on Sunday, they stay home with a rented DVD and four bags of Orville. The movie theatre business goes down, so some shut down, and others reduce staff. Now, not only are fewer movies available to seen (since there are fewer screens), the ones you do see are at theatres with sticky floors because they can't afford to clean them as often. Everything gets worse, and then, as more people pull back, it gets even worse. Economists call this the "fallacy of composition".

                                      In a sense, it goes back to Adam Smith. Sure, I could plant, water, and weed a garden each year, and then can, pickle, or freeze my produce. I could buy flour and a breadmaker, and make my own bread every day. I could wash, dry, and iron my own clothes instead of using the drycleaner (actually, I do do this, but some people don't). Of course, this wouldn't leave me much spare time for other things, would it? Like Smith's pinmaker, we are less productive overall by trying to do everything else, instead of specializing at what we do best, and trading with others.

                                      So, with the world's usual irony, as we pull back in an attempt to make things better, we make things worse, with a slowing, less productive economy. My advice? Eat, drink, and be merry - and go out to do it! Lay off the caviar and Champagne, and have domestic foie gras with a nice California red. Forget Kobe beef for Kansas steaks. Eat Alaskan char instead of Chilean bass. It's going to take a year or so in any case, but if we all hunker down and stay at home, all of economic theory says it will take even longer.

                                      1. re: KevinB

                                        Speaking as someone who rarely indulges in either Kobe beef OR caviar (or champagne, for that matter), you speak as someone who still has a job (and clearly a pretty decent one at that). If people aren't going out, it's more than likely because they don't have the money to spend these days (or don't choose to spend it because they don't know if they'll be out of a job in 3 months and hey, those kids' tuition bills don't pay themselves now, do they?)

                                        Thanks for the um, lesson in trickle-down economics -- As I said originally, my friends and I are painfully aware that some of our favorite places may go out of business and are doing what we can to counterbalance that. However, if people are having trouble making ends meet these days, and worried about what the economy is going to do tomorrow, it hardly makes sense to tell them to eat out more (and really, most of us here in Brooklyn are already eating local anyway). At least we're keeping the small family farms in business.

                                        1. re: bebevonbernstein

                                          KevinB wasn't explaining trickle down economics. He was explaining regular plain old bread and butter economics. If everyone feeds the economy by spending money (spending on false credit does not count) the economy stays healthy. Trickle down economics is something else. It's the theory that says if you give special economic benefits, like tax breaks, to the wealthiest members of society, the benefits will eventually trickle down to the little people.

                                          Anyway, bebevon, I'm with you. In the early months of the recession when I felt the recession wasn't touching me, I was spending as I was in 2007, even more maybe, aware of the fact that spending and local spending in particular, was helpful. But now as the recession has begun to hit me in the form of lower earning on my retirement account and fear of maybe losing my job, I've shut the wallet almost completely.

                                        2. re: KevinB

                                          "What you say makes sense, and yet every economist would say you and your friends are making the worst possible decision for the overall economy."

                                          kevin. amend that to "some" economists. other economists would say people acting in their own self-interest is best for the overall economy, as everyone's decisions create the most efficient way to allocate resources. tho' not an economist, but educated in that art/science/philosophy, i would agree with the "self-interest" camp.

                                          if the government stays out, that will help us recover faster -- rather than our tax dollars subsidizing the poorly-managed or corrupt or weak sisters. we should spend our money how we choose.

                                          1. re: alkapal

                                            I know this is a food board, but please Google "economic fallacy of composition" for a full explanation of what I noted briefly. If you'll promise to do so, I'll agree to amend my statement to "MOST economists would say" ;}

                                            1. re: KevinB

                                              kevin, i did take a cursory read (synopsis) of that theory, but imo, my comments and the theory are two different things. in other words, i have not engaged in the "fallacy". my point is not that the government operates like a household, and that the same theories and rules apply. my point is that markets are best functioning when individuals, acting as individuals or as corporate entities make decisions in their own self- or best interest, and that those decisions -- collectively -- create the most efficient markets for providing what those consumers need and desire. government subsidies distort those decision-making functions.

                                              1. re: alkapal

                                                Oh, Lord - economic arguments on a food board! Let's deal with your last point first about government subsidies - I don't think I ever proposed government bailouts for McD or BK. All I said was if everyone decides to eat at home instead of eating out, the restaurant industry will die, all those people (from owners to busboys) will be out of work, and they won't be able to buy anything beyond bare necessities.

                                                I think you have failed to grasp the central point of the "fallacy of composition" - the macroeconomic rules are not the same as the microeconomic rules. Let's refer to another economic theory that illustrates the same point - the "tragedy of the commons". Say you have ten villagers, each with two cows. There is a common field where the cows may graze. By agreement, each villager can graze his cows for 3 hours each morning, and 3 hours each evening. This is sustainable - the field can regrow enough grass to provide for all the cows. However, one farmer decides to cheat (it's in his own self-interest, right?) by grazing his cows in the middle of the night. His cows grow fatter, produce more milk, more calves, etc. He makes more money. Other people catch on, and they start sending their cows out to graze at night as well. Soon, the field is depleted, none of the cows gets enough to eat, and everyone's income falls. Individual ("micro") decisions that make sense ON THE MICRO LEVEL contribute to a massive reduction of income and wealth AT THE MACRO LEVEL.

                                                On a more philosophical level, think of theft. Suppose you develop a foolproof method to steal from stores. It's in your obvious self-interest to steal as much as you can; you get more stuff for a little effort. But if everyone in society takes that approach, we all have to spend so much more time and effort preventing theft that, as a society, we all end up substantially worse off. What seems to make sense for an individual does not always make sense for the entire economy.

                                                1. re: KevinB

                                                  "my point is not that the government operates like a household, and that the same theories and rules apply."

                                                  (maybe i misplaced my comma). it would better read: "it is not my point that the same theories and rules apply to government as to households."

                                                  my point is about how the macro economy is a reflection of the millions of micro-economies. the "rules" aren't the "same" in the macro economy, because there are a lot more variables and actors (state actors, as well as individuals and private corporate entities), right? and we know that state actors do not act on pure economic self-interest, but often (VERY OFTEN) act almost solely on the basis of self-perpetuating self-aggrandizement of political power. plus, there are international factors that affect (and effect) wealth and wealth creation, monetary and trade policy, exchange rates, (and here in the u.s., "untouchable" social programs).

                                                  maybe we'll just be talking past one another. anyway, if we don't agree that the other one of us "understands", i'm happy to leave it there. but, just to address your point, and (attempt) to elucidate my idea....

                                                  i don't think the example you give is apt. our economy is not the villager's "common field" with finite resources. in plymouth, when bradford changed from a socialist to a free-enterprise and self-responsiblity system for raising and growing one's own food on one's own plot, the overall wealth grew and more people were more productive. the socialist set-up didn't work on the macro level, nor the micro level.

                                                  i don't see how my positing of this point is any contradiction to your "fallacy of composition" argument. i think it is ironic that the example you give hinges on theft. the "common field" is the incentive to thieve and "get your share". if the common field is replaced by personal property, the incentive to thieve is largely negated. there will always be thieves, however, to some extent.

                                                  as to your macro theory, there will always be short-term misallocations of resources (loss of jobs, etc,); long-term, these individuals should move into more productive and efficient industries.

                                      2. The restaurant I work in in the Bay Area was down 30% as well in October. Things have been better since then, but our owner is dreading January, which would normally be a busy time for us as well, but who knows how many layoffs will occur then?

                                        1. It is bad - very, very bad - down 20- 30% month on month from last year. We are in a very competitive neighborhood so pricing changes are not feasible. Let one person go so far. As I mentioned in another post, if you do go out to eat, target your spending to places that you love and go as frequently as possible. By March, you'll have an idea of who is going to survive. By June there will be lots and lots of real estate for rent.

                                          1. A very good question. Just returned from a week on Maui. With two exceptions, the higher-end places were almost empty.

                                            The exception to this was one, where there was a Holiday party in progress and we had to wait 45 mins. for our reservations. The other exception was a bit more down-scale, and it was full, including the bar area.

                                            What does this observation mean? I haven't a clue. It did appear that the places that I'd typify as more mid-scale, were doing a bit better. The higher-end spots, not so well.

                                            The last few local spots (Phoenix) have been full. Have been at home, or in the air, so we've not been out as much. OTOH, a wine & food group, that normally sells out a major Dec wine dinner, had to cancel, due to lack of interest.

                                            It will be an interesting 1st & 2nd Quarter. I wish the best for the restauranteur's. I have seen a lot of lodging/dining promos from Las Vegas - more than what I recall. Still, the high-end spots tell me that they are booked for over a year out, so maybe things are not that bad.


                                            1. I work at an independent, fine dining place in the SE. Sales: 30% down from a year ago. Normally the weekend between Xmas and NYE is slammed, this year, dead! NYE was rockin', but no better than last year. Everyone around us is either closing or offering these rediculously cheap deals where you can't even cover your costs unless you pack 'em in like Applebees. This economy is killing the independent, small restaurant- I'm hoping I'll still have a job next month.

                                              1. While making last minute NYE plans, I called a couple of restaurants to see which still had openings. The places that were packed the last couple of years had tables available at just about every hour of the night. The restaurant we chose had maybe 4-5 tables full. It was shocking.

                                                A friend who owns a small restaurant that focuses on organic, local foods had to lay off their managers. She and her husband will have to work double shifts 6 days a week in order to keep things going, but they simply cannot afford to pay someone else right now.

                                                Our personal choices mean that we dine out rarely, and when we do price is a strong consideration. One local place where we know the owners and staff very well has increased their prices to the point where we just don't have dinner there. I think they've changed their ingredients somewhat, because what we have tried lately hasn't been as good as they were before. I would love to support these guys. But when there are other locally-owned places just down the street with entrees just as good or better at a more affordable price...

                                                10 Replies
                                                1. re: mojoeater

                                                  Talkingcat and Mojoeater,

                                                  Sorry to hear these reports, but thank you for sharing.

                                                  Things still seem to be going OK, in the PHX area, but then we've been out of town a lot recently.

                                                  On Maui, I did find several fine-dining locations that were less than half full. Two others, one down-scale was at 100% (including the bar), while the other did have a major local Holiday party (don't know how that figures in, but was an observation). Pretty much the same for the golf courses, including Kapalua. Still, it rained a bunch (O`hau & Kaua`i were flooding), so may not have been all that accurate. Still, if it's raining, I can't think of many things that would bring me comfort like a great meal.


                                                  1. re: Bill Hunt

                                                    This is a really interesting thread. I am curious, for anyone reading this, how restaurants are doing in areas where there are a lot of retirees? I ask this because of the minimal interest rates available to so many who are on fixed income, especially over 55. There are many people who only want to live from the interest off of their principal. Where 7 or 8% was safely available several years ago now it is 3%. That is a dramatic difference in lifestyle.

                                                    I also am on the e-mail list of a dozen or so different wine shops from around the country. I have never seen discounts like the ones that are available now. It is not just 20 or 25% off across the board (Wine Library, Wine Chateau, etc.) but 30 and 35% on wines that used to have half of this discount. I would also note the devaluation of better wine at auction. Some of this is because of the dollar but much is simply the lack of demand.

                                                    What was it that Roosevelt said? "The only thing we have to fear is fear itself."

                                                    1. re: Joe H

                                                      Joe I live in S Fl the retirement capital of the world. I have noticed a good many restaurants already closed down this summer. I guess they knew they couldnt even make it to season. Even now there are restaurants closing down day by day. The chains remain busy but not packed like in previous seasons. I have noticed that cheap chains like IHOP and Friendlys are busy but higher priced ones are suffering.

                                                      Independents vary. The good ones are still hopping, the average ones are empty. The bagel delis are pretty dead compared to previous years. I envisage more places closing at the end of March/April when season is officially over, the owners will take what they can and run. There is no point trying to make it thru summer here if you didn't take enough over the winter. As someone else said earlier here, there will be a lot of real estate for rent soon enough.

                                                      We are seeing early birds and coupons which would normally be offered out of season and never seen previously in the winter, but everyone here is hurting.

                                                      1. re: Joe H

                                                        Joe H,

                                                        Good question. While I live in PHX, a haven for retirees, we normally dine in the East Valley, not the West Valley, where the concentration is much higher.

                                                        General observation is that most restaurants' volume is down. There are exceptions, but in general terms, down.

                                                        On Maui, it was pretty much the same thing, with two exceptions, leading into the Christmas Holiday. The two exceptions were a more "local" spot, that was filled to capacity, and a higher-end, more tourist-oriented restaurant, that was hosting a Holiday party for locals. We actually had to wait for our reservations, but we started with some really good white Burg, by the bottle, and took the remainder to the table.

                                                        Have not dined in the West Valley here, and it would probably be skewed right now, with the playoff game coming up, but I'd wager that most restaurants are also down.

                                                        Do not recall seeing discounts around here, but probably just missed them. I get some super offers from Las Vegas, since we do business meetings there about 4x per year. Same for Hawai`i, but when we were there, you'd have thought that everyone was over-booked by 300%. Still, since our return, the e-mails for Hawai`i "deals," have almost made me sick. We observed most restaurants at about 30-40%. Same for FC on UAL. We booked back when the fuel was astronomical and prices were going up hourly. Yet, when we checked in at SFO, they were offering FC upgrades for US$120. Few took them up and FC was about 1/2 full going. On the return, there were probably 8 fliers in FC and only 30 in coach. Sign of the times? I also think that I was the only "fool," who actually paid $ for my ticket in FC. All of the rest just upgraded with points.

                                                        In destination resorts, I think that the airlines will also be an indicator of what is happening in the restaurant industry.


                                                        1. re: Bill Hunt

                                                          Bill, last week in Scottsdale, including my pleasant lunch with you at the White Chocolate Grill, restaurants seemed quite busy. Twice in 6 nights I didn't want to wait out the wait at my first choice and went elsewhere.
                                                          I really enjoyed Sapporo; I had dinner there twice.

                                                          1. re: Veggo


                                                            Yes, nice lunch!

                                                            That is good to hear. As it has been a strange holiday season for us, we've not been out as often as is usual. This has been for familial reasons only.

                                                            I think I have more of a handle on the dining on Maui, than in the PHX-Metro area right now!

                                                            What were some of the "full" restaurants, that you encountered?

                                                            On our last dining expeditons, here, we observed nearly full houses, but these were a bit fewer and farther between, than normal. Still, we were able to get reservations much later, than I had expected. One was a normal dining experience, while one was an "early-bird" seating for MIL. Still, both venues did fil up, while we were there. While we did not exactly close either down, we did note that the crowd taperd off, while we were there.

                                                            Stay warm! I've missed the last two weeks' golf outings, because others seem to be having familial problems, as well. Gosh, I hate canceling tee-times. Gotta' get you back into these environs and swing a stick. Courses are looking great, but I have just not been able to squeeze them in. OK, enough golf talk, as the CH MODs will be on my case.


                                                            1. re: Bill Hunt

                                                              Bill, the wait at a slick Mexican resto on Scottsdale Rd. was going to be so long that I asked to see a breakfast menu. I got a dirty look.
                                                              The mix-up at the Phoenician I confess was my fault.
                                                              I do have a couple Cohiba robustos with our name on them (3- if your interesting wife of 38 years will smoke a stogie), and I suppose I could dredge up an '85 porto from my dungeon. :) Thanks again for your hospitality.

                                                              1. re: Veggo

                                                                Do you recall the name of the Mexican restaurant? I'm just curious to see who is really busy now, in the Valley.

                                                                Wife will abstain. I will provide a Taylor-Fladgate '85 (never lived up to its earlier press, but still a really good wine). Wife will not abstain on the Port! She liked this one upon release, and has followed it for some decades.

                                                                Looking forward to it, Who knows, when in the UK in April, maybe a couple of Especiales will make their way into my bag - if I can do it with less than a 25-count box. Unless I hit the Powerball, that would be prohibitive.

                                                                I also have some local restaurant recs. to share on your next trip. To date, most of these still seem pretty full. One has just added a "chef's tasting counter," and I have to dine there. In regular episodes, the food and service have been excellent, and the crowds about 80-90% on our nights. Now, they have been getting great local press, so that might skew the what I observed somewhat. Only time will tell.


                                                                1. re: Bill Hunt

                                                                  Bill, my guess is it was Blanco. We were there Saturday night at 6:45p and they wait was an astounding 45-60 minutes, with the bar and "lounge" PACKED. JAlexander's was hopping, too (still a short wait with call ahead when we left around 8pm). We ended up at El Torito, a sad substition, but immediate seating. Sigh.

                                                                  1. re: acampeau

                                                                    Thanks. I just do not know that area of PHX-Metro, all that well. Was surprised when I bet Veggo at the White Chocolate Grill [?]. I didn't even know that there was a major shopping center, north of the Mercedes dealer! Imagine MY surprise. Gotta' get out more...


                                                  2. I work for an industry supplier who supplies the big national chains down to the mom & pops, so I see what goes on with customers and read what the NRA is reporting. Volumes are down across all types of restaurants and bankruptcies are spreading. The mid-tier stuff is hurting most; the family oriented, Applebee's-style chains are losing their typical customer to the fast food circuit and the grocery as they trade down for cheaper options (hence the desperate proliferation of coupons). The upper tier is still holding on OK if they don't have a mountain of debt. But even fast food volumes are softening; watch the reports from the major stocks (BKC, JACK, YUM).

                                                    18 Replies
                                                    1. re: jboeke

                                                      i have worked in fine dining in boston for years. several high-end steakhouses have just laid off staff because expense-account dining has shriveled, and people are no longer traveling as much for work.

                                                      i eat out several times a week and some places are eerily quiet. i don't know if it's just the cold weather or the sign of things to come. anecdotally, people are ordering apps rather than entrees and choosing less expensive wines.

                                                      a few local icons are teetering, and some are for sale.

                                                      adapt or die.

                                                      the ny times recently ran an article about how bad private dining sales were in november and december all over nyc. most places down 30-40% from last year, and they lost millions of dollars in anticipated revenue.

                                                      it's going to get worse. nobody will loan money for new ventures for a long time. anything in the pipeline, with secured financing, will probably get opened, but after that, i expect it will be very quiet and there will be a lot more empty store-fronts.

                                                      1. re: jboeke

                                                        Well, you work in the industry, so perhaps you can answer this question for me. I have a hard time connecting the dots.. yes, commodity prices rose dramatically in early 2008, but they have come down almost as quickly, and in some cases, have sunk to multi-year lows. For example, live lobster in Toronto is normally around $9.99/lb; this fall, $6.99/lb was available all over the city, and the lobstermen in the Maritimes complained they weren't making enough to cover their costs. Corn prices zoomed higher in early 2008, but have since crashed back to 2007 levels. Milk did the same, but is now roughly the same as it was a year ago, as is sugar. (You can check the historical prices at "futures.tradingcharts.com" for most commodities.)

                                                        So what I don't understand is if the input prices (also including energy) have come down dramatically, why are so many restos raising menu prices? Can you share any insights?

                                                        1. re: KevinB

                                                          other input costs, other than raw materials, are the culprit (across industries): overhead includes all sorts of personnel costs, health and liability insurance, taxes, regulatory fees, collection efforts from deadbeats, and the like which have been on the rise.

                                                          1. re: KevinB

                                                            I wonder if prices are different in Canada than the US? As noted in my comments below, I had a conversation with the owner of a local restaurant in upstate NY recently, and he told me that food prices went up with the cost of fuel and never came down...at least in his area. He also stated that many companies added fuel delivery surcharges that never went away either. Maybe commodity prices have dropped but wholesale prices haven't? I certainly haven't noticed any dramatic drop in the prices of bread and milk in the grocery store......

                                                            1. re: janetofreno

                                                              Businesses of all kinds and at all levels of the supply chain are trying to recoup their losses when fuel prices ran sky high fast and they were losing money on the way up. Airlines started the fuel surcharges and now they've dropped them, only to add them in somewhere else. Maybe the food costs have dropped a little, but not enough to offset other fixed costs like insurance and electricity which continue to rise. Can only get worse when the banks won't extend credit to business owners.

                                                              1. re: janetofreno

                                                                wholesale prices have definitely not come down. perishables like seafood have always fluctuated and yes, lobster is selling at record lows, but rice, flour, cooking oil, etc. remain sky-high. anything bought as an export (like wine) is through the roof because of the rock-bottom worth of the dollar.

                                                                most restaurant-owners i know are NOT raising prices, but trying to save money in other ways. for example, twice in the last month, at 2 different spots, the mussels are no longer moules frites -- you need to order the fries as a side.

                                                                it's only going to get worse, folks. each individual needs to do what is right for their own wallet and financial peace-of-mind.

                                                                1. re: hotoynoodle

                                                                  On a local radio show Tom Colicchio said that no restaurant should expect to make money this year. That's pretty grim

                                                                  1. re: KTinNYC

                                                                    A blanket statement like that is nothing short of nonsense.

                                                                    1. re: KTinNYC

                                                                      That's a ridiculous statement.
                                                                      One reason I rarely listen to, or watch, news/ talk show...

                                                                      1. re: latindancer

                                                                        It's the opinion of an experienced restaurateur and I have no problem believing it. In a good economy the profit margin for the restaurant industry is 10%, not hard to believe they will just break even in these economic times.

                                                                        1. re: KTinNYC

                                                                          The standard average for restaurant profit margins, in a good economy, is 10-18%.
                                                                          It's a ridiculous statement to say ALL restaurants are not making a profit.
                                                                          Restaurants would be failing right and left if they weren't making a profit.
                                                                          Absurd comment at the very least.

                                                                    2. re: hotoynoodle

                                                                      Lobster is selling at near-record highs here in the Midwest ($16.99/lb.) Since fuel costs are down and lobster catch is up, this makes no sense whatsoever, and I refuse to buy.

                                                                      1. re: hotoynoodle

                                                                        Though it has been hashed out in some other threads, but I think that this is a good idea. Yes, regulars might be taken aback, but I'd rather it change in this way, than cutting back on the overall quality of the ingredients. Next, just tell me that the prices have had to be adjusted up. I can live with that too, but in the overall market, prices can have some negative aspects.

                                                                        I has got to be a tough call for the restauranteur. No matter what they do, there is a potential for a loss. I'd just urge most to keep the quality up, and then roll the dice on other changes.

                                                                        Thanks for sharing,


                                                                        1. re: hotoynoodle

                                                                          But the dollar is not at a "rock-bottom"; in fact, it has rallied strongly over the last year. It touched a low on March 17, 2008 with the US dollar index (a trade-weighted measure of the US$ vs. the pound, euro, CAN$, and yen, among others) at 71.98; now it's a shade over 86. That's a rise of almost 20%. Can't blame the buck!

                                                                          Rice, at least on the commodity exchanges, is down 25% from its high. Wholesalers may not be passing on these cost savings (as with milk/dairy, corn, flour, etc., all of which have dropped on the commodity exchanges from their peaks of last summer), which is why I asked the question initially.

                                                                          1. re: KevinB

                                                                            From the wholesale angle, commodity rice is down about 50% but Uncle Bens isn't budging. Milk and cheese WAY down right now. Beef is really cheap too, but that changes daily. Lobster is down only because there is a glut, but the fishermen aren't going out for it anymore because they lose money on fuel so soon there will be a severe shortage. Flour and sugar are down to normal prices. Cooking oil is tied to fuel oil prices, I guess because of the additives to gas, that had dropped by more than half but is starting to inch up again. Restaurants just have to find a salesman they can trust to follow the rollercoaster rise and fall of food prices, like a stockbroker would. Oh and most companies have lowered their fuel surcharges, they adjust monthly when they get their diesel delivery.

                                                                            1. re: coll

                                                                              Oh, I can attest to the dollar rising as I have some income from the UK and know what the exchange is on a monthly basis.

                                                                              But as far as consumer prices dropping here, I am simply not seeing it and it seems that meat and dairy are the worst. And I am less than 50 miles away from "America's Dairyland".

                                                                              1. re: Whosyerkitty

                                                                                Sorry, should have mentioned: These were restaurant and intstitutional prices, I have no idea on consumer/grocery prices (other than food shopping myself) .
                                                                                There are three different tiers of supply: wholesale, grocery stores, and places like Costco (can't remember what that category is called). In a perfect world, they'd all be similar, but their suppliers do different deals with each category. By the way, I just heard of PSMO selling (wholesale) for $5.95.

                                                                                1. re: coll

                                                                                  Geeze, well that makes it worse---the retailers aren't passing those savings on.

                                                                  2. About the same to report here in the Artic Region known as Vermont. My biggest concern is the ripple effect caused as more people lose their jobs. We recently had a Texas Roadhouse open and they seem busy. The holiday gift certificate push will be over soon so I think the real test will be the next few months. Some restaurants have revamped their menus to focus on more affordable dining options which I think is a good idea. My hope is that the attrition takes out the restaurants that are poorly operated leaving a smaller pool of better quality places to compete for the shrinking dining dollar. Our area is void of "expense account" restaurants (Morton's , Ruth's Chris, etc.) and I expect them to be really hard hit. I have attended a few meals at such places and always felt that "free spending" approach "beacuse the company is paying" was a house of cards waiting to topple. Maybe a little moderation would have prevented the situation from becoming what it currently is. Then again, several rounds of single malt scotch , a $60 Kobe steak ,and a few bottles of vintage Bordeaux were just a few of the many acts of greed by Wall Street's finest. Don't ask me and my fellow taxpayers to pick up that tab !

                                                                    1 Reply
                                                                    1. re: TonyO

                                                                      Though VT is far removed from PHX, I see similar here. However, we were recently "overbuilt" in the "expense account" steakhouses. Many fine-dining venues in the resorts have been turned into yet again, another high-end steakhouse. IMO, we had enough, or maybe more, to begin with. I expect to see most close up shop and become something else.

                                                                      I am still a supporter of the chef-driven stand-alones, or even the chef-driven resort restaurants. We've cut back, but this has been because of fewer board meetings, etc., and not a conscious effort on our part. Still, from a business standpoint, travel budgets are down, as are entertainment budgets.

                                                                      My wife cut her post-holiday party for board members, because of such cutbacks. No AIG debacle here, thank goodness!

                                                                      Interesting times. I'll still try to do my part, but think that there are fewer folk in line behind me.


                                                                    2. We are still eating out 3-4X week for dinner and like Tony mentioned I am noticing the places like Flemings and Ruth's Chris being down seemingly because of the downturn or corporate spending, parties, and the like. A new place opened close to us and it is booming (and doing a great job). Someplaces no longer have waits that did a year ago. One of our local places we went to Friday night and it was dead and we had a horrible experience and will not be back. It has declined seriously in recent months in both food and service. I do believe in many ways it will be the survival of the fittest and restaurants are going to have to work harder to retain current customers and attract new ones. I know our choices for watering holes and eats have changed in recent months. We're spending the same amount or more, but more discriminating in where we are spending.

                                                                      1. The first recommendation that is made to people in hard times is to cook their own food rather than eat out. It is where they can realize the highest immediate savings in their expenses. That means that all restaurants are going to suffer.

                                                                        This is bad for the restaurants, but good in general. I've read so many posts from waiters, waitresses, and restaurant owners complaining about customers for one thing or another. This is an indication that business has been good, too good. When you have to appreciate every customer, service improves. Also, people learning to cook, shop effectively, etc. is a good thing on the whole. It not only improves their understanding of food and food preparation (which in turn allows them to appreciate fine dining more), but it also improves their health and understanding of nutrition. Finally, cooking for yourself makes you see how much effort goes into the process so you know how much work it is for others to do it for you. This builds empathy and appreciation for what they do, rather than an ignorant snobbery that looks down on food preparation and service as something you pay others to do for you because you're too busy or important to do it for yourself.

                                                                        1. This is the time for all hounds to support their great locally-owned restaurants. Eschew the chains, and support the struggling chefs in your neighborhood. Tough times ahead, folks.

                                                                          3 Replies
                                                                          1. re: pikawicca

                                                                            That is a good sentiment, though it does not differ from our normal dining choices. Still, it's very good, and deserves posting. I try to do the same, when traveling to distant environs. "Chef-driven" is where I attempt to dine, in most cases.

                                                                            Still, if these folk cannot count on their faithful patrons, they will not be around in the future. When/if the economy improves, where else will any of us dine?

                                                                            I do agree with an earlier poster, espousing cooking at home to maximize their economic return. Still, do we wish to loose our good restaurants? My vote is no.

                                                                            I give your post a hearty "hear - hear!"


                                                                            1. re: Bill Hunt

                                                                              I expect to see many chain locations close their doors as well as the are "profit driven" and if the P&L doesn't pass approval, they may pull out of certain markets. I generally do not eat at most chains more based on food quality but I think it is important to remember that the EMPLOYEES are local people trying to earn a living and many future restaurant professsionals cut their teeth in such places. I am not in the corner that blasts all chains simply because they are chains and supports all local resatuarants just because they are local. For example, we ate at a Texas Roadhouse that recently opened out of curiosity. The service, food quality, and overall value exceeded most "local" restaurants in their price range (which I think is a key comparison factor). I have also held the belief that chains thrive because the average dining guest is looking for what I term "consistent mediocrity". On the other hand are those that seek something unique (especially when travelling) and will take the risk of a bad meal rather than dine at the Olive Garden. I usually consult this and other sites when we are going out of the area to help the cause. A bit of research has led to some great meals that I would have never found otherwise. I don't think anyone has ever pointed me towards a Red Lobster when asking for a great seafood restaurant (although their are some that seem obsessed with those "cheddar bay biscuits") !

                                                                            2. re: pikawicca

                                                                              I agree with this however I won't support struggling chefs/restaurants with mediocre food/service just to say I stupport local businesses.

                                                                            3. Interesting question...I was going to post a similar one but with a slightly different twist.

                                                                              First, to respond to yours: I am in Charlotte NC on one of my frequent business trips here, and there is clearly a downturn at least in this part of the state. Of course, being that Charlotte is the home of Wachovia and B of A this shouldn't be a total surprise. Nonetheless, I ate at a local restaurant last night that is known for its Sunday night specials, and it was empty. I have eaten there maybe a dozen times and that was the first time that it was so slow. We were practically the only people in the place. Admittedly there was a big football game going on, but it WAS on the bar TVs (and no one was in the bar either...).

                                                                              Also, my seatmate on the flight out was the owner/operator of a small cafe in upstate NY. He told me that they are being hit the hardest by the cost of food....which has gone way up and has not dropped with dropping fuel prices. He said that for him business was actually up: that he has an inexpensive place in a small town and that folks are chosing to eat there rather than travel to more costly places in nearby larger cities. He felt badly, however, that he was feeling forced to raise his prices due to the food costs. It was an interesting conversation....

                                                                              And for my twist on it: He did mention that even as business is up he has been tempted to lay off a server or two to offset those higher food costs. In general, I have been hearing/reading a lot of service horror stories lately. I wonder how much of it is simply that places ARE understaffed. And servers seem more stressed. Yesterday I heard a story in the elevator about a nearby Charlotte restaurant where the service was so bad that the teller decided not to leave a tip.....and had the server chase her into the parking lot demanding to know WHY no tip was left......apparently the server was SO overwhelmed with the number of tables she had to take care of that she had no idea that the folks involved had sat for a long, long time both between courses and waiting to get the check.....

                                                                              4 Replies
                                                                              1. re: janetofreno

                                                                                Funny that she somehow found the time to follow the patron into the parking lot. Poor service should result in both a conversation with the owner/manager and an adjusted tip up to and including no tip. I have had a waitress follow me out to the parking lot before questioning a tip and I can tell you the resulting conversation would make Anthony Bourdain blush.

                                                                                1. re: TonyO

                                                                                  she was obviously stressed out. not an excuse, but an explanation.

                                                                                2. re: janetofreno

                                                                                  OT but funny this reminded me of the time years ago, when I used to waitress. I had a patron follow ME to the parking lot to give me a tip, because it was a Chinese restaurant and the servers do not receive the "tip" directly (it had to be pooled and then split among the staff, in whatever way the restaurant decides ).

                                                                                  Good times.

                                                                                  1. re: tarteaucitron

                                                                                    OT, but you reminded me of a time, about 30 years ago, when I worked in a steakhouse in London, Ontario. One of the waiters came running up to the kitchen and demanded a baked potato, immediately. "Sure" said the cook "How do you want it? Butter, sour cream?" "Just give me the potato!" replied the waiter, who took it off the proferred plate and ran out into the parking lot, where he heaved the spud at the windshield of the couple who had just stiffed him.

                                                                                    He was discharged a few minutes later, but said it was worth it.

                                                                                  1. I think it truthfully depends on the region and the restaurant. I work for a pretty popular chain, I use that word loosely, of restaurants in Texas and in some other states that have branched out into several cuisines. They have become known for their smart business strategies including cutting out the middle man and supplying much of their own produce, meats, seafood and even restaurant supplies. Becaue of this they are able to control the quality and their pricing much more than the average restaurant. Some of the out of state restaurants are not doing as well as last year but most of the homegrown restaurants are having record sales that are continuing to increase. In fact, at the store I work at, we are having what we call mothers day sales almost every friday and saturday, and wondering how we are ever going to accomodate more people with mothers day and valentines day does roll around. quite a dilemna to have during this market. my advice to those other restaurants out there is to remain consisten in both quality of food and service, and then people will come to you when they dine out. this is not the time to try newthings but to perfect the old, and if you are in a restuarant that is doing well like mine, count your blessings because it is few and far between in this climate. and to all who are struggling, i wish you the best of luck. oh and just to quantify how much better is, we saw over 1,000 more people walk through our doors the week of new years alone.

                                                                                    1. In Boise, Idaho many of our best restaurants have closed. The chains continue to do well. I of course support the locally owned places...but the majority here prefer chain food. Not sure why.

                                                                                      1. Central Florida Panhandle checking in. It seems like the places that have always done well continue to do well, but that a number of newer restaurants that hadn't really had time to build up financial reserves are the ones that have gone under. No real pattern with closures in terms of chain/non-chain or cheap/moderate/upscale. There have been closures of places like Quizno's Moe's and Johnny Rockets as well as local standalones.

                                                                                        And there are some places that are thriving, even with current econmic conditions. Business at our favorite strip mall Thai place has been so good that the owners are talking about a second location if they feel confident they can keep the quality up and the numbers for a lease work out right. And they're currently operating out of a space that had been one of those black holes with three previous restaurants in five years failing there. The Red Bar's been as busy as I've ever seen it during January this year. The gumbo place seems to be doing slightly better than usual for winter.

                                                                                        1 Reply
                                                                                        1. re: beachmouse

                                                                                          Good to know. Interesting about who is holding their own, or even contemplating expansion.



                                                                                        2. My co-worker reports that she went to a relatively new (one month) indie restaurant this past Saturday and even with reservations they had to wait 40 minutes to be seated. We were also out and about on saturday and stopped at our fave indie Mexican place to get a quick bite but when we were driving in we could see the lobby was packed with people and the line of folks waiting was out the door so we instead headed home and called for takeout from a nearby brewery (also an indie). mr. rockandroller went in to pick up the order and said he could barely get to the bar there were so many people in there. I know it's Saturday dinnertime and that's not a good representative sample, but I was pleased to hear about some indie places doing so well.

                                                                                          1. From our little hole-in-the-wall north of Tampa, COGS is _way_ up and the customers are grousing about the minimally-increased prices, no matter that it's still cheaper than the McDonalds down the street. It's a difficult time.

                                                                                            1. North Shore of Long Island, a reataurant paradise, is getting depressed. In the last few weeks:

                                                                                              Went to a decent local Greek restaurant for a Saturday lunch. It's a good place, better than decent food and pricing. We were 3 meals (real meals, not gyros) at noon, two couples came in around 12:30, and that was it for the mealtime!

                                                                                              A midlevel Italian restaurant that has been serving really good food for more than 20 years closed, another nearby restaurant burned down, taking out a next door restaurant, and neither plan rebuilding..

                                                                                              At an upper level Italian place this week (OK, it was a Monday) is usually full every evening, but had empty seats. We left at 9:30 pm, and in the past would have seen at least 1/3 of the tables still eating then. We were the only ones still there. The food quality remained at its high standard, but this time there was just one fillet of fish on my plate instead of 2. As that left room for the desserts, the reduction in portion was a benefit from previous excess.

                                                                                              Grabbed an emergency burger at BK when there was absolutely no time for lunch. Line was half the usual.

                                                                                              Everything is going down.

                                                                                              1. In St. Lous, Saturdays are great, overall, Fridays are pretty good, and the rest of the week is in deep, deep trouble. This has always been a weekend-preferred area as far as dining out goes, but it's extremely noticeable now. The less expensive places are having less trouble, but everyone seems to be hurting, across the board.

                                                                                                1. I was extremely surprised last night to go to Abe and Louis ( a steak house in Boca Raton South Fl) to find the place absolutely packed to the gills, Monday night at 7pm. I had gone for a pharmaceuticals dinner in a private room but the rest of the restaurant was full to bursting. In fact we all commented on how busy the restaurant was and this is somewhere which is probably $75 plus a head.