Diners feel the pain

Julieta Tarrés reporting for Diario Crítica

"The owners of most restaurants porteños bumped their prices between 25% and 50% in the first quarter of this year. They justify the increases by the cost of gas, electricity and food products. The adjustment is even more noticable in "table service", better known as el cubierto. This charge was doubled and in the most expensive it can be up to $11 per person. All this goes against the grain of the current crisis. In just four months, 425 restaurants closed and sales fell an average of 40 percent. Further increases are expected after the elections when joint negotiations close with food service unions. Currently, the union run by Luis Barrionuevo is negotiating with the Food and Hotel Business Federation (FEHGRA) for a pay hike of 27 per cent.

The director of the Center for Buenos Aires City Studies (BAC) of the Faculty of Economics, UBA, Graciela Bevacqua, who measured up to 2007 consumer prices in the INDEC, says that "meals outside the home contributed to higher prices in May." According to industry sources, the fall in purchasing power generated "a change in habits of food consumption. "People are not asking for appetisers and desserts. They are also being careful with alcohol purchases", said Luis María Peña, president of the Association of Hotels, Restaurants, Cafes and Confectioneries of Buenos Aires. He went on to say that the slowdown in the economy has further complicated the food business.

Between February and May, the cost of going out to eat a pizza or a platter of sushi is up 30%, but prices for these two categories grew 60% in the last semester. Prices at parrillas, in contrast, have not increased a the same rate: up just 40% during the first three months of 2009. Prices of grilled beef remained stable in recent months due to meatpackers not exporting their product. According to statistics from Guía Óleo, a sort of virtual catalog of restaurants across the country, over the past three months the minimum price for eating sushi in a restaurant went from $ 60 to $ 100 per person. The same happened in "popular" pizzerías and traditional parrillas where prices jumped from $ 30 to $ 50 and $ 35 to $ 45, respectively.

The increase in the price of restaurant meals was not only due to hikes in utilities and food, the cost of table service nearly doubled from January to today, an increase from $ 3.5 to $ 7 on average. The restaurants association sets no established rate for this service and leaves it an unregulated charge. "Charging this kind of fee is a policy decision for each business location. It is a terrible mistake to raise this fee to cover expenses and future cost rises. But I see that they are doing it a lot and they are going hand in hand. In recent months, it increased a lot in high-end restaurants and those of high popularity.", said the director of a chain of Italian eateries.

Evidence of the increase in table service is clear in some Buenos Aires establishments. For example, just to sit at a table at Sette Bacco, an Italian restaurant in the heart of Barrio Norte, costs $6.60 per person. There, a dinner for three people without appetiser, no alcohol or dessert is at least $170, not including tip. At Justo Corrientes, a grill located in Puerto Madero, the price of table service rose from $7 to $9 per head. There, a three course lunch for five costs more than $500. An advantage is that there are discounts of up to 20% with some credit cards.

Esteban Brenman, director of Guía Óleo, said that his website updates prices "all the time." According to his estimates, inflation on the menus was 75% in the past year and a half, and an average of 28% between January and April. "The database recorded increases in all categories, mostly in pizza, but not so much at parrillas," said the founder of the guide that highlights data from more than 3000 restaurants.

425 restaurants have closed

Since Argentina's economy stopped growing, bars and restaurants in Buenos Aires started to feel the drop in sales. In only four months, 425 eating places closed. The rest of the 8,300 establishments in the Capital are complaining about the collapse of an average drop of 40% in profitability. But while some economists foresee a general recovery for the remainder of the year, the outlook for the sector is not good. This was revealed a report by Claves Consulting, that detailed how the local recession "could reach close to 1,800 of the 40,000 restaurants that exist throughout the country. According to analysts from Claves, the restaurant industry, which recorded sales of 38,429 million pesos in 2008 - expects to close 2009 with a contraction in consumption by 30 percent.

"In four years of economic explosion, there was an oversupply of restaurants in Buenos Aires. 40% were opened during this period and only 5 percent closed. 8300 establishments are now in Capital Federal," said Luis María Peña, president of the Association of Hotels and Restaurants."