Is the restaurant business in trouble?
A few observations:
- It's July, usually the start of a slow season for white-tablecloth dining in the city and suburbs. What better time to pull the plug, just as poor-performing restaurants wait till after New Year's to close.
- Even in a good economy, restaurants close -- partnerships blow up (e.g. Ro-Zu, which reopened after a chef change, and Thoreau), accusations of tax fraud (Drafting Room in Spring House), owner vacillates on the merits of a concept (Saute's impending changeover to Catahoula).
- In a shaky economy, as we're in now, quality and value matter. Domenico's in Blue Bell, which lasted seven months and never overcame service issues, was out of its league; its home base is a busy but small storefront in Ventnor. Alison two in Fort Washington was overdesigned, overleveraged, and overpriced. If you're charging $25 or more for entrees -- especially in the burbs where you're relying on locals -- you had better execute. (And pray a lot.)
- NPD Group reported last month that restaurant traffic had slowed for seven consecutive quarters. In what is seen as a positive sign, the most recent quarterly decline, however, was not as steep. (See report.) The NPD predicts two more soft quarters before a recovery. (In a finding that should delight my buddies at Unbreaded, the NPD found that sandwiches and burgers were the only food category to post growth. See it here.)
- On the optimistic side: Most of the closed restaurants have new tenants. Life goes on. Entrepreneurs are still attracted to what they see as a glamorous profession. Rents have come down in many areas. Food costs have stabilized. Some examples of repurposed spaces: Luca Sena bought a piece of the Snow White Diner at Second and Market, and he's renovating it into an Italian-American lounge concept called Revolution House. The white-tablecloth Roy's, which stuck around for nearly nine years at 15th and Sansom until it closed over the holiday weekend, was an underperformer whose landlords were eager to take it over to open a more casual restaurant of their own; it will open early next year. I've heard of strong interest in the Chew Man Chu and Alison two spaces, and I'm certain that Floret, in one of the loveliest settings on the Main Line, will find a new operator.