High-end Sushi Takes a Recession Hit

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Is high-end sushi in danger of joining French fine dining on the list of restaurant recession casualties? After a series of splashy New York openings in the first half of the decade — Masa, Morimoto, Megu, etc. — sushi has fallen off the buzzy-openings map. Simultaneously, much as comfort foods like burgers and fried chicken have come to the fore in recent years, ramen has overtaken sushi as the Japanese cuisine of the moment. In fact, the last time sushi was part of the foodie conversation, it was more or less a punchline — when Jeremy Piven blamed it for his mercury poisoning.

The trend has been in the making ever since Momofuku Noodle Bar replaced Jewel Bako as the East Village’s buzzy restaurant sometime around 2004, and it has become more pronounced with the recession. Last week, following the recent opening of May-Chan Ramen & Robatayaki, a similarly skewer-centric establishment, Robataya NY, opened around the corner. Meanwhile, also nearby, sushi restaurant Sharaku has closed, and another sushi joint, Nori, has been forced to discount its prices to lure in customers.

What’s happening in the East Village is happening all over town: In the past two years, as restaurants like Setagaya, Ippudo, and Matsugen have popped up (not to mention the whole bánh mì craze), no fewer than 114 sushi restaurants listed on MenuPages have shuttered. That’s about one per week. While it’s true that neighborhood sushi joints have opened at a similar rate (per MenuPages), the splashy, high-end openings have been next to none. There were no sushi restaurants in New York’s Fall Preview this year, last year, or the year before.

“Three years ago, I would’ve been talking to about twenty people about sushi because everybody loves it,” says James Famularo, a broker at New York Commercial Realty Services. “This year I’ve spoken to two people. It definitely started as we went into the recession.” Last year, Famularo found a space for Chris Eddy of Barmarché, for a sushi restaurant he planned to open with Omido chef Eliji Takase. It’s said that Eddy scrapped the project when he couldn’t come up with the capital, and last week the space instead opened as an Italian restaurant.

Meanwhile, Omido, where Takase is still chef, is abandoning its high-end sushi model. Hurting for customers, its owners realized they could either lower their standards to make their sushi cheaper or refresh the concept entirely. Opting to do the latter, they asked AvroKO to take over operations. The new restaurant, Happy Face, will highlight Eiji Takase’s background in Latin cuisine, and buns and noodles will be served. The vibe will be more in tune with what AvroKO has found diners are currently seeking — not quiet sushi sanctuaries like Yasuda, but rather “slightly darker, sultrier, louder, and more comfortable environments” that take some of the guilt out of blowing money on food.

Adam Farmerie, a partner in the firm, describes the sushi conundrum thusly: “Strangely it’s one of these things where it’s considered a luxury item, and even if there are inexpensive ways of eating it that don’t involve the all-you-can-eat, half-off-yesterday’s-sushi specials, that’s the public consciousness. They say, ‘Voilà, it must be expensive so I’m not going to go there as much.’” (Indeed, even Daniel Boulud, in our chef's roundtable, balked at the prices of his local sushi restaurant and wondered if the model was sustainable.)

Jeffrey Chodorow is well aware of this. When he reopens Ono as Tanuki Tavern next week, the focus will be on Japanese pub grub at what Chodorow calls a “decidedly value-driven price point” (think crispy bok choi, miso corn cakes, maitake tempura, and chicken wings). Chodorow doesn’t plan to ditch Ono's sushi bar, but he did scrap plans to put one into his other new project, Ed’s Chowder House, opting for a cheaper raw bar instead.

“To hire people to man a raw bar is much less expensive than to hire trained sushi chefs,” says Chodorow. “And the variety of things you need to carry is not nearly at the level of at a sushi bar.” Nobu’s Drew Nieporent agrees that the labor pool has shrunk: “A real sushi chef has a high degree of training and most of those sushi chefs are from Japan. Maybe it’s an immigration thing. ”

Because sushi chefs are harder to come by, and their skill is so specialized, they tend to cost more than executive chefs. Anita Lo remembers that when she hired her first sushi chef a decade ago, they made $80,000 to $90,000 a year. Jo-Ann Makovitzky, who runs 15 East with her husband Marco Moreira, says that it took her six months to find one. “There are very few Japanese sushi chefs in New York,” she tells us. “Often you’ll find one and the rest of his team is not Japanese.” She currently employs four chefs for a 40-seat restaurant, plus three or four other cooks. That kitchen is about the size of the one at her other restaurant, Toqueville, which has 30 more seats, and yet it costs her more to staff.

Then there are the food costs. “The intimidation of the cost of ingredients would be a deterrent for anyone who wants to open a sushi restaurant,” Makovitzky says. Sashimi-grade fish costs triple the amount of fish used for cooking: “Even if you’re getting a wild striped bass from Montauk at $6-$7 a pound, you couldn’t even buy sushi-quality tuna or fluke for the same price,” she says. And that doesn't include the cost of shipping from Japan. So why not skimp? “New Yorkers have reached such a level of understanding about sushi that they’re extremely finicky,” says Makovitzky.

Of course, there are those who think the shrinking of the sushi marketplace might be a good thing. Like Anna Wintour applauding the winnowing of undeserving fashion shows, Jeffrey Chodorow thinks that “If the number of sushi restaurants decreased by 20 percent and the demand for sushi stayed the same, the places where sushi is served would do much better because the sushi chefs would be better utilized.” Others plan to wait out the recession: Avi Stieglitz, a partner at new Lower East Side sushi spot Blue Elm, says he carefully weighed the profitability of sushi and ultimately decided the neighborhood needed it. “There’s only so much comfort food people can eat before they need to go see their cardiologist,” he told us.