Business is down
"There's no question business is down," said Gene Zuriff, director of strategic planning for Smith & Wollensky. At the company's flagship steakhouse in mid-town Manhattan, which had about US$27 million in revenue last year, sales are down about one-third since the attacks, compared with the same period last year.
"Your suburban people aren't coming in for dinner, the tourist is not here, the business traveler isn't around as much," Zuriff said. "There's no question business doesn't look very bright." Shares of Smith & Wollensky are down one-third since the attacks. The stock closed at US$3.87 today.
Demand sliding
Even before the attacks, beef demand was sliding as the economy sputtered. Consumer confidence fell to a five-and-a-half-year low in September, and the nation lost 199,000 jobs last month, the biggest decline in more than 10 years.
US beef producers may also face declining demand from their biggest foreign customer, Japan.
The US Meat Export Federation said shipments to the country may fall as much as 20 percent in October after the country found its first case of mad-cow disease last month. Japan last year bought 368,000 metric tons of US beef worth US$1.47 billion, or nearly half of total exports.
Slumping demand comes after a surge in wholesale beef prices this past summer as the economy grew. While retail prices remain high, wholesale beef is 10 percent lower since the end of May.
Supermarkets may soon pass along lower prices to consumers.
"There will be some dampening of prices," National Cattlemen's Beef Association economist Chuck Lambert said.
To be sure, low prices not last beyond this year.
"People want to get out and escape and have some recreational activity," said Hudson Riehle, a senior vice preside at the National Restaurant Association. "Even as the economy has softened, there's still the essentiality of dining out." Demand probably will recover just as beef supplies fall, because ranchers are sending fewer cattle to feedlots to be fattened for slaughter, the cattlemen's group said.
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