'Volatile' restaurant industry worse in economy
Posted January 11, 2010
Wake County, N.C. — Bob Jewett opened Bocci Trattoria and Pizzeria about a month ago in Cary in a location where two other restaurants have already closed.
So far, he says, business has been good, given the state of the economy.
"The other restaurants that didn't make it here for whatever reason – I feel like it was just the wrong concept," Jewett said.
But even on nights where there's a been a wait for a table, he's quick to correct a customer's observation.
"(A customer) looked around, and he goes, 'What recession?'" Jewett said. "I just kind of laughed and smiled and said, 'Well come see us on a Monday night or a Tuesday night.'"
Because no one agency fully tracks why restaurants are closing, it's difficult to say what role the economy might play in that.
Paul Stone, president of the North Carolina Restaurant and Lodging Association, says that generally more than half of restaurants close in about three years.
Added to what he calls a "very volatile industry," he says people are dining out less because of the economy, and when they do go out, they spend about 10 percent less."
Stone says the restaurants that have been hit the hardest are the higher-end establishments that relied on corporate business.
Those that appear to do better are ones that offer a unique dining experience and can more easily change their brand or menu.
The North Carolina Employment Security Commission keeps a database of news report that shows that 45 restaurants in Durham, Orange and Wake counties closed in 2008. Twenty-seven closed in 2009.
"Our area, frankly, was oversaturated a couple of years ago, and so there started to be a washout then," Stone said.
Stone says he wouldn't be surprised to hear of more restaurants closing in the next few months but that he also expects business to start picking up slowly.
"We are kind of bullish. We think (the restaurant industry has) bottomed out," he said, adding that it will continue to grow as people become more comfortable with the economy and begin spending again.
"If you are giving them what they want, then they are going to come see you, and I feel really positive about the future and the opportunities," he said.