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Slowing economy takes toll on service industry

Restaurants getting hit hard

POSTED: July 9, 2008 5:01 a.m.
SARA GUEVARA/The Times

People are less inclined to go out to eat as a result of the failing economy.

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As people scrimp and save because of the increasing price of food and gas, dining out is often cut from budgets. That’s not only leaving some local restaurants feeling a loss, but their employees as well.

Restaurant workers said they have noticed that people are eating out less often, and some people are tipping less, too.

Shelley Thompson, a bartender and server at Loco’s Deli and Pub, said she has definitely noticed a lighter load of customers than usual.

She said because fewer people are coming in and food is getting more expensive for the restaurants, all of the employees have had their hours cut. Employees whose wages come from tips are working an average of eight hours less a week and hourly employees are working an average of two to three hours less a week.

But because times are tough, she said servers are very grateful for the tips they get.

"We appreciate the business, and we appreciate the tips," she said.

Thompson said that some people will apologize and blame gas prices for smaller tips, saying, "Sorry I can’t leave you more."

"We need to buy gas, too," she said.

Thompson said the price of gasoline has been especially hard for delivery drivers at Loco’s because they have to buy their own gas and delivery charges have not been increased.

Jeremy Wilkson, a co-owner of Atlas Pizza, said he has seen a drop in the number of orders he gets, but customers are still tipping his delivery drivers as usual.

They try to set delivery charges to cover the cost of drivers’ gas, he said.

"We have a minimum delivery charge of $2," Wilkson said. "And we increase our delivery charge depending on distance."

Rudolph’s Restaurant owner and chef Michael Hunt said his profits have recently dropped 12 percent. He hasn’t raised menu prices because he doesn’t want to risk losing customers.

"Profits are down because less people are going out to eat," he said. "I don’t want to give people a reason to go somewhere else."

Hunt said he has even started offering more economical options to encourage families to eat at his restaurant.

On Wednesdays, he offers a less expensive, family- style buffet meal.

Hard times are hitting businesses, too, Hunt said. He has noticed that fewer companies are holding lunches at his restaurant.

Rudolph’s also holds wedding dinners, and Hunt has seen more families cutting costs.

"They’re more price conscious than they were before, because it’s more of a necessity now," he said.

Kris Collins, a server at Rudolph’s, has seen her tips stay at a steady 18 to 20 percent, but the number of tables she serves has gone down, which she attributes not only to the economy but the time of year.

"July is very scary in this business," she said.

Many families will try to pack in a summer vacation before school starts back, so people are spending their money at restaurants out of town instead of at home.

Staff at Two Dog Cafe also noticed that business has been light this summer, but said without explanation, some weeks are busy while others are slow.

When gas prices first skyrocketed in May, manager Dean Adams said patrons would split everything from meals to glasses of wine to save money. Though that has leveled off, he still sees people eating lighter than they did earlier this year.

"We just take it as it comes," Adams said.



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