Manhattan Restaurants Feel the Pinch

This post first appeared on Minyanville.

It appears the city that never sleeps has finally succumbed to the economic slowdown, and it’s not just the neon “Recession Special” sign outside Gray’s Papaya.

According to the New York Times, Manhattan's restaurants are rejiggering menus with a thrifty bent, slimming down lobsters and even printing wine menus in euros to attract, well, Europeans, looking to take advantage of favorable exchange rates.

Some of the chefs interviewed noted small tweaks, like swapping out jumbo lump crab meat for regular lump crab meat (half the cost) or shiitake instead of morel mushrooms. Others expected more drastic changes, like limiting the amount of complimentary bread a table can order. Freeloaders may soon have to resort to more traditional methods.

Restaurateurs are even taking tips from another beleaguered industry group: the airlines. Similarly pressured by rising commodity prices and flagging consumer spending, carriers are resorting to slick tactics to stay afloat.

In addition to baggage charges, pillow charges, beverage charges and slashing routes, the likes of United (UAUA), Continental (CAL) and Delta (DAL) are notorious for overbooking and banking on no-shows to keep the planes just barely full. Now, you may be able to expect the same thing when showing up for your 7pm reservation. It makes more sense for a restaurant owner to have customers wait at the bar, even appeasing them with free drinks, if it keeps the tables turning all night.

With average meal prices dropping and diners less inclined to opt for that top shelf cocktail or the surf and turf, restaurants are getting creative to maintain their already slim bottom lines. Prix fixe prices are falling, portions are shrinking, bar menus are growing, happy hours are getting longer and combo specials are becoming more ubiquitous. The well-known Blue Water Grill is even serving half-price seafood nibblets after 10pm to try and lure in late night noshers.

Wait a minute, happy hours are getting longer? In that case, bring on the recession!