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Restaurants, like almost all businesses, are feeling the pinch of this recession. According to trade group figures, in 2008 the number of restaurants nationally fell for the first time this decade, and 2009 is not expected to be any better. Another group, the National Restaurant Association, projects that restaurant sales nationally will fall 1 percent this year compared to last.
To get a sense of how the down economy is affecting the business in Boston, WBUR sat down with Roger Berkowitz, the president and CEO of one of the city's most famous restaurant chains: Legal Seafoods.
Berkowitz started as a fry cook and remembers the long-ago era when the fish and chips cost 99 cents. With wait-staff and chefs working around us, we met Berkowitz at the Legal Seafoods at Boston's Long Wharf, right next to the New England Aquarium, where the fish and chips now runs $16.
You've been in the family business since you were a young boy. Your father, George Berkowitz, opened the first "Legal" in 1968. How does this economic downturn compare to the ones you've experienced over the decades in the family business?
LEGAL SEAFOODS PRESIDENT ROGER BERKOWITZ: This one's pretty democratic; it's hitting everybody. In the past, it might have hit automobiles, it might have hit travel, it might have hit restaurants, but here it's really impacting everybody.
So how has it impacted you? How has it impacted Legal Seafoods?
BERKOWITZ: There are simply too many restaurants for the number of people that can afford to eat out. So, people are trying to make choices — I think if you ate out four or five nights a week in the past, you might be eating out two or three nights a week now.
This is, you know, almost Darwin's theory of survival of the fittest. People are making choices based on where they see the values. So it's really incumbent on any of us that really want to survive and potentially pick up market share during this period.
For the diners, does that mean that you find more people ordering the below-$20 rainbow trout, as opposed to the $42 Alaskan crab legs?
BERKOWITZ: You know, it's interesting, I think it's cutting both ways, Bob. I think that there is a certain segment that is used to spending more money — so I think we're getting those people that are actually spending more — but on the other end, the people that can't afford as much — they're coming in and ordering less expensive entrees and maybe, instead of a bottle of wine, glasses of wine.
Has it changed your menu?
BERKOWITZ: You know, certainly, I'm looking at this and saying, "Okay, how can I compete with less-expensive venues, and how can I compete with people who might be bringing their lunches home?" So, we're doing things, as an example, the endless cup of chowder and salad for $8.95.
Is traffic down?
BERKOWITZ: Traffic is down a little bit, but relative to the competitive set out there, I like to say we're the tallest of the seven dwarves.
And what does that mean?
BERKOWITZ: I think that the restaurant industry as a whole has been impacted. We have been impacted a little less than a lot of our counterparts.
The Massachusetts Restaurant Association says 2008 was a dismal year. Was it not "dismal" for you, just down?
BERKOWITZ: Through September it was actually a pretty good year. I think when the stock market hit that blip and it was sort of panic, that's when it started to take a bit of a dive. So, we ended up just under what we did last year. But, we're starting to see a slight rebound right now.
You have 32 restaurants from Massachusetts to Florida. Is any geographic area a little worse off than or a little better off than another?
BERKOWITZ: It's cutting both ways. I think the most difficult economic impact is in Florida. Conversely, the Washington, D.C., area is actually faring better than the others. And Boston isn't bad.
As you look at the performance of individual restaurants, have you had to contemplate the possibility of maybe pulling the plug on one or more?
BERKOWITZ: We have three restaurants in Florida, but two of our leases have come up for renewal there, and so we've chose not to renew two of them.
How does what's happening now in the economy change things when your fishbuyers — or when you — go out and consider what fish you're buying for the day?
BERKOWITZ: We try to leverage the best-buying opportunity for the guests. So, in other words, if all of a sudden the pressure is off codfish — well, let's run some features on codfish. Let's get codfish in here and make sure that our guests can take advantage of it. So, if I can buy better, I'm going to reflect that on the entree.
Look ahead. How do you think the rest of 2009 is going to go? Maybe even more importantly, how do you think the tourist season — which begins unofficially in a couple of weeks, starting with Memorial Day weekend — is going to go?
BERKOWITZ: The price of gas is down, so I think that there'll be a lot of people driving to the Northeast. And I think that there are a lot of interesting venues — from museums and sports teams and whatnot. So I think that we will see a lot of Americans and perhaps Canadians for this summer. In terms of how the year might end up, I'm cautiously optimistic. And I think we're going to see a recovery in 2010, maybe not the first quarter but certainly by the second quarter.
Any possibility of returning to the 99-cent fish and chips?
BERKOWITZ: Uhh (Laughs). I think the only time we'll return to the 99-cent fish and chip is if someone comes out with a study saying, "Fish is bad." And there's so much fish out there that no one knows what to do with it. Just the opposite's coming out in terms of studies. So I think seafood as an expensive protein has gone away.
This program aired on May 12, 2009.
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