The other week, a woman I know — let’s call her Anna — managed to get a reservation at Libertine, the popular Manhattan bistro that opened last spring. She and her fiancé were planning a date night, and they were ready to spend. “I was really excited,” she told me. The feeling didn’t last. “We looked at the menu, and it was just so ridiculously expensive that we called it off.” The restaurant, where “poulet à la crème” goes for $48 and a single sausage runs $33, doesn’t post its prices online; Anna had done some sleuthing and found user-submitted photos of its chalkboard menu on Yelp. “It was kind of a jump scare,” she said.
Something happened to the casually uncasual restaurant, slowly and then all at once. It has always been possible to eat out expensively in New York, and it has always been possible, with some ingenuity, to eat out cheaply. But anyone going out occasionally, as Anna does, or constantly, as I do, has likely noticed a change in the wide belt of the middle at the new establishments that fashion themselves easygoing wine bars or nouveau diners or drop-in-whenever neighborhood spots. It’s now difficult, if not impossible, to make it out for less than $100 per person.
Menus simply look more expensive, too, as $30 starters and $72 “large format” dishes become the norm and operators abandon the old app-entrée-side-dish model for running lists of shareable plates. “The old rule of thumb was mains could be marked up two times or 2.5 times, while sides got a six-times markup,” one longtime industry vet told me, “and your service staff was trained to sell sides — if they couldn’t sell the sides, they weren’t working in a restaurant.” But that old-school restaurant math is “not how it works in the post-Estela downtown-dining textbook.”
The old days are starting to look like an era of prelapsarian innocence. Inflation is the obvious culprit, and operators must pass along their own higher costs: insurance, rent, buildouts, garbage collection, you name it. There are only so many levers to be tweaked — smaller spaces, faster turnovers, constricted menus with dishes that require less prep, tighter quarters for customers — but the view from inside the industry is not that prices are now too high. It’s that they were previously too low.
“The industry was really fiscally unhealthy, pre-COVID,” the vet explained. “Things were at a breaking point.” If the pandemic halted the normal functioning of restaurants and inspired existential terror as to their future, it also allowed a recalibration that some call wholly necessary. The seismic disruption of COVID fostered greater transparency, community, and, most important, cash reserves. With two rounds of PPP funding, many restaurateurs came out of the pandemic with enough money on hand to save businesses that had been, before the shutdowns, perilously close to the edge.
Menu prices initially rose while demand remained soft. As the pandemic was downgraded from a national emergency to a manageable irritant, restaurants kept filling up and those prices were able to remain high. At the top end of the market, a new normal found its footing.
At least some of this additional money is going to the people who work in the restaurants: Manager salaries at all levels are up dramatically, as are hourly wages. According to Alice Cheng, the founder and CEO of Culinary Agents, a job-search platform for the hospitality industries, the median offered rate for a line cook in the metro area was around $17 in 2019. After restaurants reopened in 2021, that went up to $20, rising to $21.50, and so on. I asked Cheng if she was feeling the effects as a restaurant customer. “I’m fortunate that I understand why it is that way, so I’m not upset,” she said. “But go out for a casual lunch and $100 later people who are not in tune with what’s happening are going to feel some sticker shock.”
Some expenses came back down (unsexy necessities like a box of gloves basically doubled during COVID and have since cooled) but menu prices aren’t dropping. According to Department of Labor data, “food away from home” — the Consumer Price Index bucket that effectively covers restaurant spending — was up 25.9 percent in March 2024 compared to 2020. Earlier this year, The Wall Street Journal reported, “The last time Americans spent this much of their money on food, George H.W. Bush was in office, Terminator 2: Judgment Day was in theaters, and C+C Music Factory was rocking the Billboard charts.” That was 1991.
For those of us who focus on the micro, rather than the macro, the squeeze is felt on a more anecdotal level, and it’s fair to ask where it’s all headed when those who would have celebrated promotions, anniversaries, or just a random Friday night with a big dinner are reconsidering their options. “I took my sister out to King for her birthday recently, and the check drop was painful,” Anna said. “The food was good, but it feels weird that dinner for two costs as much as, I don’t know, a plane ride to Florida?”
