Steakhouses are booming. New York led the trend by quadrupling its number in the past 10 years. Now, London seems to be following in its footsteps. Fiona Sims reports.
Steak is big business. While fine dining restaurants are struggling to put bums on seats in the recession, the capital’s steakhouses are booming. Operators are reporting increased sales, and no sign of the downturn, as new steak-focused businesses continue to open.
The latest in a long line of recent steak-related openings is the Palm. Opened on the 29 May, on the site of the former Drones restaurant on Pont Street, Belgravia, the Palm belongs to part of a popular American group with 25 restaurants across 16 states and one each in Mexico and Puerto Rico. Owned by Palm Restaurants, it’s the first to open in Europe – and will be one of many more, says co-owner and chairman Wally Ganzi.
The Palm has an impressive following in the USA. Its fans include George Clooney, Gwen Stefani and George Bush Snr – and indeed, every US president since 1972 has visited. Even Fred Astaire was rather partial to the Palm – he used to tap dance on the bar, remembers Ganzi.
Founded in 1926 in Midtown Manhattan by Wally’s grandfather, John Ganzi, and his friend, Pio Bozzi, the first Palm specialised in Italian cooking – they were both immigrants from Parma, in Italy, hence the name, Palm, which got slightly lost in translation while originally registering. But steak was soon introduced to cater for the local newspapermen that frequented the place, then lobster was added in the late 1960s – they lay claim to the phrase “surf and turf”.
Ganzi is immensely proud of the fact that the original Palm is the oldest restaurant in New York City still owned by the same family and in the same location. And that the fourth generation is now involved in the business – Bruce Bozzi Jr is executive vice-president.
Ganzi claims that one of the secrets of its success – apart from the quality of the meat, which he will happily talk about endlessly – is the impressive staff retention rates. It’s 26.43% – and many of the 2,500 employees are third generation.
“We’re not big on titles here. You rarely hear me use the word employee – we work together,” he declares.
The latest opening in the USA was the fourth to open in New York, in the Tribeca area of Manhattan – which comes 37 years after the second Palm opened in Washington DC – at the insistence of his friend, George Bush.
So why London, and why now? If Ganzi had his way he would have opened the Palm in the capital 20 years ago – but the import tax on United States Department of Agriculture certified prime-aged steak was prohibitive. It wasn’t until it was cut to a reasonable level three years ago that he could look seriously into opening here.
So what about that meat? It’s sourced mostly from cattle ranches in Montana, but it’s not the breed or location he’s most excited about, it’s their feed, which is controlled by Palm Restaurants. The cattle fatten up to 1,200 pounds, he tells me, though he won’t divulge the exact mix. The lobsters, meanwhile, come from a family-owned supplier in Canada.
The steak and lobsters account for 70% of the business, with overall annual revenue of $160m (£97.6m) – and a dip in business of 11% since the recession hit. “That’s a lot better than our competitors,” declares Ganzi.
With an average US bill of $79 (£48) a head – including booze, but not service or tax – prices are considerably higher in the UK, where a 400g New York sirloin is £49, with an “on request” price for the 450g – the most popular cut in the USA and not even the biggest. Along with £7.50 for a serving of “family style” fries – for two or more – a line-up of salads starting at £7.50, signature starters, including a broiled crab cake at £11.50, and an array of vegetables also priced to share with creamed spinach at £9, the UK Palm bill certainly stacks up.
There are three Scottish steaks on offer, from £25 for a 200g fillet, plus some seafood dishes, including the house speciality – a 2lb steamed lobster from Nova Scotia at £40.
Ganzi is pinning his hopes on the area’s well-heeled clientele – he reckons that 50% of his business comes from hotels, and the London Palm is well-situated on that score. He predicts revenue of £6m a year in London, revised upwards from his initial projection of £5m. It seats 130, with an additional private room for up to 40 in the basement.
And London marks the first of many for Europe, hopes Ganzi, who has plans for 15 over the next six years, with a site already earmarked for Milan and locations decided for Madrid and Paris. And where America goes, Europe usually follows – albeit around three years behind.
Jason Atherton got in there early. He opened Maze Grill last May after extensive research – scoffing dozens of different steaks and burgers in New York the previous year. His dream was to open London’s best steakhouse, which he has pulled off, if you listen to the critics.
He spent three months working on his burger mix, and even longer researching steak – a mix of British and US – and the best broiler to cook it in. And while Maze Grill isn’t exactly cheap – you pay for all the extras, including the chips – you struggle to get a table there.
Steakhouses are the fastest-growing genre of restaurant in New York. Vintage classics, such as Peter Luger’s, are booming, but there are chic new places to eat steak run by top chefs opening up all over the city.
Ten years ago there were barely 20 steakhouses, now there are more than 90 in New York. Steak is big business there – hang the health issues of eating too much red meat. And it’s the new generation of slick, contemporary steakhouses attracting women that have really spurred the revival, among them Craftstreak, Dylan Prime and STK.
Sophie Bathgate is seeing as many women as men eating steak in her two London restaurants. The owner of Sophie’s Steakhouse and Bar opened a new branch in Covent Garden a few months back, and she reports that business is booming – driven, in part, by women.
She spent a lot of time in New York and Chicago looking at steakhouses – Peter Luger and Gibson’s stood out – but felt that the only thing missing was that they weren’t female-friendly enough.
“I was very surprised at the number of female customers when we opened our first steakhouse in Fulham. We got them in initially by offering more brasserie-style dishes, but women are now eating as much steak as men,” she reports – something which Caterer can confirm was the case on the night we visited.
And, oddly, the recession hasn’t affected the business. “We’ve sold more steak in the past nine months than ever before and our larger-sized steak sales have doubled, which is weird, you would think the opposite would happen,” ponders Bathgate, who thinks that some of the increase in her business is down to customers who have turned away from fine dining.
She also believes that the popularity of her two restaurants is also down to the fact that she offers value for money. “We don’t charge extra for chips or béarnaise sauce – it all comes with your steak, and people appreciate that,” she says.
Huw Gott believes he also offers one of the best-value steaks in town at the Spitalfields restaurant he co-owns with business partner Will Beckett. Hawksmoor made steakhouses cool again, wrote Time Out, when it opened in June 2006. It celebrates quality British beef, which Gott and Beckett buy from top supplier Ginger Pig. And, unlike most of the competition, they cook on a charcoal grill.
“We liked the idea of following an American steakhouse formula – but focusing on British beef,” explains Gott.
And like Sophie’s, business is good. “Last week we had our best ever week, and each month this year our like-for-like sales have been up on last year,” he reveals, barely suppressing his surprise, putting average spend at £55, including drinks.
But Gott has a theory – one shared by other steakhouse operators in London. “I think it’s because people become more conservative in a recession and they are less likely to take a risk with a new faddish food style, and they are less inclined to pay for over-complicated food – they want real value for money. It’s food people want to eat – rather than food restaurateurs and chefs try to persuade people they should be eating.”
Wannabe Michelin-starred chefs should take note.
OTHER PLACES TO EAT STEAK IN LONDON
Black & Blue
Boisdale of Belgravia
Smiths of Smithfield
Published by: The Caterer