Food for Thought
'80s redux: Will the drop in the price of oil hurt — or help — Houston restaurants?
Steve Zimmerman, owner of La Colombe d’Or, the fabulous historic boutique hotel and classic restaurant now known as Cinq, made national headlines during the 1980s oil bust by offering an executive lunch for the day’s price of oil.
“We were actually just thinking about bringing it back,” laughs Zimmerman. “If the oil prices drop into the $40 range per barrel maybe we’ll do an Oil Barrel Special, a three-course dinner for the price of oil.”
While the rest of the nation may be rejoicing at low prices at the pump, Houston businesses, including restaurants, are keeping a wary eye on the dropping price of oil, currently selling at about half of its highest price in 2014. Houston is not nearly as dependent on the oil business now as it was in the '80s, but a worldwide oil glut can still send ripples through the local economy.
“If the oil prices drop into the $40 range per barrel maybe we’ll do an Oil Barrel Special, a three-course dinner for the price of oil," says Zimmerman.
And another veteran restaurateur sees problems ahead, although not nearly on the '80s level.
“If the price of oil stays this low,” he says, “it will affect all of us.
“Maybe the couple that normally order a $100 bottle of wine at dinner will start to order a $35 bottle,” he says. “And maybe there won’t be as many businessmen wining and dining clients for dinner.”
A lot of Cinq’s customers are wheelers and dealers in the energy business, and Zimmerman says they tell him the current situation is less crash and more a hiccup. Still everyone seems to be in a wait and see mode.
“I think everyone’s been thinking about it,” says Shepard Ross, who currently has three restaurants and a fourth on the way. “We haven’t seen any difference yet in sales at Glass Wall or Brooklyn Athletic Club and Pax Americana is so new it’s hard to tell. But if oil prices stay low it will affect the local economy, and the first thing we’ll start to see are lower wine sales. But our concepts are very neighborhood focused, I’d be more worried if we were a big steakhouse dependent on expense accounts.”
Ross and his partners are still going ahead with The Del, their latest concept, and Ross actually thinks those looking to start a restaurant may find a down energy economy offers lower land prices and leases.
And chef/owner Lynette Hawkins is hoping it might actually help business as Giacomo’s cibo e vino.
"If they aren’t paying as much for gas they have more disposable income and maybe instead of dining here once a week they’ll come twice a week," says Hawkins.
“We’re a casual Italian concept and wine bar with pretty reasonable prices,” she says. “Most of our customers are regulars from the neighborhood. If they aren’t paying as much for gas they have more disposable income and maybe instead of dining here once a week they’ll come twice a week.”
She’s also hopeful that her suppliers will drop or at least reduce the fuel surcharge, although she hasn’t seen that yet.
“Restaurants in Houston are a very competitive market,” Ross says. “But eating out has become such a part of our lifestyle I think people will keep doing it, but they may spend less. I think the higher end places may feel it more than local concepts with more flexible menu prices.
“There are so many places that offer good food, but the ones that survive will be the ones that also offer good hospitality. If you have less money to spend on dining out you’re more likely to go to the places that know you and treat you well. Places that know your name and what table you like to sit at. Those places will survive.”
Insiders say one indication that restaurants are starting to feel the pinch of a slower economy could be a benefit for diners: you might start seeing a lot more coupons and dining specials pop up in your emails.
UPDATE: Late Monday afternoon, as oil fell to less than $46 a barrel, Zimmerman said he would revive the Oil Barrel Special, starting Wednesday (Jan. 14).