Saw this article last week… some interesting quotes in here. I will bold them and leave to people to discuss. Here is the link that will only work today. (Great news resource but the dynamic links kills it for me)
Three restaurants in the Four Points area have closed in the past couple months and the owners said the area is a challenging to do business.
“We tried to change the concept with changes and improvements, but basically it never did enough business to keep running. It’s a tough neighborhood to do business in,” said restaurateur Stan Adams.
Adams closed Quinlan Park Grill in Steiner Ranch’s Vista Ridge Shopping Center earlier this month. Around the first of the year he changed the format from Tutu Gusto with Italian fare to the grill.
Now Adams will concentrate on his other Austin restaurant - three Brick Oven locations and the upscale Sienna. Business at his other restaurants has been slower this summer, but they are holding their own, he said.
“The expectations and demands of the neighborhood [are] beyond what they are willing to pay for. Most merchants are struggling in that neighborhood,” Adams said.
He is not the only one who said running a restaurant was hard to do in the Four Points area. Hoon Kim closed Seoul Food at the end of July after three years in business.
“Lunches were pretty good but dinners were hit or miss; some days nobody came in,” Kim said.
Although there are a couple of offices in the area, Kim said there was not enough office traffic.
Kim, who learned to run a restaurant from his uncle in Los Angeles, thought there were not enough restaurants in the Four Points area. He was surprised that more traffic did not come through.
“I think it had first a bad location for a restaurant. The entrance is not very good. Second, it’s a matter of people in that neighborhood not spending that much money,” Kim said.
He found that lots of people who live in the area cook at home. He learned that from the school kids he hired who said their stay-at-home moms cooked every night.
Kim also said he had to overpay to get good help.
Kim hopes the new Chinese restaurant Hunan River Place that plans to go into his former space does well, but he is happy to be out of the business.
“It’s too time-consuming and not rewarding enough,” he said. Now he is investing in real estate.
Daniel and Olga Gillcrist closed Mood & Food in River Place the first week of June - two-and-a-half years after opening it. High costs and poor location were also some of their main reasons to get out of the business.
They thought their location was misrepresented to them before it was built.
“We signed the lease before they built it. It was presented to be real visible to the corner,” Gillcrist said. But it ended up with hills and tall grass that made the complex hard to see from the intersection.
It is a tricky center to get into unless patrons know the back way, because in the front the entrance is away from the shops and was not illuminated at night, he said.
In addition to a poor location, costs to run a restaurant have gone up since the couple opened Mood & Food, Gillcrist said. Profit margins are “real thin” in the restaurant business anyway but that coupled with dramatically higher food costs, higher labor costs, new vendor delivery charges and fuel surcharges, he said.
Local restaurateurs are not alone, across the nation, the restaurant industry has faced several economic challenges which started last year according to the National Restaurant Association. In 2007 the industry saw the largest spike in wholesale food prices in 27 years as well as increasing energy and gas prices.
Currently, the cost of food and beverages account for approximately 33 cents of every dollar of restaurant sales, the trade group said.
The costs that pushed Mood & Food out of business was the fact that the landlord started charging $1,840 more a month for the space, Gillcrist said. “For me the biggest thing was the landlord thing,” he said.
Before opening Mood & Food, the Gillcrists owned La Traviata at E. 3rd Street and Congress Avenue for a number of years before selling their part to open their own Italian and Mediterranean place in River Place.
“One thing I think we didn’t expect is that people out in this area when they want to go out and have decent food or something moderately priced or more upscale, they drive into the Arboretum or downtown,” Gillcrist said.
“We had a lot of loyal customers but were not generally embraced by the community,” he said. Now Olga caters with Mood & Food Catering and Daniel works in IT.
Gillcrist thinks the less-expensive places and family-friendly places are still doing all right in the Four Points area.
One example is Rudy’s Country Store and BBQ, located at 7709 RM 620. The store opened in May 2005 and from January to August, sales are up in the Four Points area store, said Marlis Oliver, area director of the four Austin Rudy’s locations, which are owned by K&N Management Inc.
“We’re doing fine out there. We continue to at least stay flat or grow over previous year’s numbers,” he said.
He attributes the sales to Rudy’s name in Austin and having a good product mix with something for everyone’s budget from prime rib to sausage.
“We have a mid-ranged price point. It hasn’t been affected greatly,” Oliver said. He thinks more higher end places have been affected by the slower economy.
Although Oliver is optimistic about the future potential in the Four Points area with everything that is coming in now or in the future, he said the restaurant business is tough.
“We feel what has kept us in the mix over the years is our attention to detail, cleanliness and delighting every guest. In the long haul, that pays off,” Oliver said.
Gillcrist said the Four Points area does not currently have the population density of other established areas in Austin. But that being said there are plenty enough people to support the businesses in the area, he said.
“If [area residents] feel strongly about having business out here they need to patronize them,” he said.