MUNCH CRUNCH; As the credit crunch continues to bite, DAVID OLD reports on how families are tightening their belts and staying in, instead of feasting out on the town.

Byline: DAVID OLD

BRITAIN'S credit crunch is putting the bite on restaurants as hard-working families tighten their belts.

Already rising food prices and a drop in customers with cash to spend has meant the end for chef Terry Miller's restaurant in Newcastle.

He had launched Rockafella just under three years ago after winning pounds 250,000 on TV show Hell's Kitchen.

But Terry, 50, and his wife, Linda, were forced to put the outlet up for sale after running into financial difficulties.

The closure has sent shock waves through the catering industry in the city, and many restaurateurs are having to think of new ways to bring in customers.

Rob Collins, from the Gourmet Society, said: "I think everybody has taken a bit of a hit, but I think the difference is how the restaurants are run. The businesses that are run badly will take the biggest hits, but those who take it seriously and have a strong customer-base are more likely to survive.

"Eating out is a luxury and is the first thing to suffer once people start tightening their purse strings. But as long as the restaurant produces good food at value for money they will be OK. Customers want to feel they are getting value.

"It also depends on where the restaurant is - those in Jes-mond will be fine once the students come back, but the city centre ones will have to work harder."

Andy Hook, owner of Blackfriars, in Friar Street, Newcastle, has found promotional activities are key to keeping Blackfriars in the spotlight and business flowing.

He said: "With people cutting back on luxuries you have to give people an incentive to want to eat at your restaurant. You need to do something different to entice people to spend their money with you.

"We've really focused our menu on fresh, market produce using ingredients that are local and in season to differentiate ourselves from the general market. It shows diners that their money is well spent and stays in the North East.

"This is something that is really important to people when they only have a limited amount of money to spend, they don't want to see it go elsewhere to support another country's economy."

Tuscany Ristorante, on East Parade, Whitley Bay, specialises in Tuscan cuisine using Tyneside produce.

Owner Dave Townsley noticed business was starting to tail off in the early months of the credit crunch, so set about relaunching the menu and sought advice from chef Terry Leybourne.

Instead of just serving run of the mill Italian food, he started using local produce.

He said: "It was becoming clearer that the credit crunch was going to affect restaurants in a big way.

"I needed a method to get people through the doors and give them a reason to spend their money at Tuscany rather than elsewhere.

"The North East has a large number of Italian restaurants, so by creating a unique selling point it gave people a reason to have a meal out at Tuscany."

The lack of hot summer weather has also had an effect on trade, however, it has boosted indoor venues as customers head for the warm and dry.

Jude Leitch, marketing manager at The Gate, said the complex was still trading well despite the gloomy economic conditions. She said: "I had been steeling myself at the start of the year to justify losses and a drop in footfall but it just hasn't happened.

"Both bars and restaurants seem to be doing very well. Footfall has dropped a little recently due to students going home and no football matches, but is still up 10% on last year, which is superb.

"We have 130,000 a week coming through and they seem to be spending.

"I don't think the credit crunch has hit as hard up here as other places of the country and also, with fuel and food prices rising, people may feel a bit depressed and want to go out and console themselves so they spend a bit more on eating and drinking."

Some people also seem to be hoping a night out will in fact boost their bank balance - The Gate's casino has seen an increase in revenue of more than 30%.

Eating out is a luxury and is the first thing that may suffer once people start tightening their purse strings

CAPTION(S):

FEELING THE PINCH: Hell's Kitchen chef Terry Miller has been forced to put his restaurant Rockafella up for sale after a drop in trade and rising food prices; PROMOTIONS: Andy Hook, owner of Blackfriars in Newcastle city centre