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In the business of eating, sometimes love isn't enough

December 9, 2017

The surprise closing of several downtown Rehoboth restaurants over the last few months sparked a not-entirely-unexpected flood of traffic into my email boxes. As usual, the majority of these emails reminded me of how little most people actually pay attention to the business of eating here at the beach. The great majority lamented the closings: "Another one bites the dust," they keened. Or the always syrupy (and often insincere), "Oh, we will miss them! I thought they were doing so well!" Why insincere? Because a significant number of these comments come from the same people who proudly announce on Facebook or on RehobothFoodie.com that "We never go downtown, because we don't want to (1) pay a few bucks to park, or (2) - [horror of horrors] - walk." (Select one or both.) That sort of pretense is not the point of this article, but I have a feeling that it will crop up on this page in the future.

The truth of the matter is that restaurants close for all sorts of reasons other than lack of business. Rents are notoriously high - and going higher - in downtown Rehoboth. After all, there's only so much space a block or two from the Atlantic. Unless they start with a sound financial plan, some owners face the option of pricing themselves out of the market just to make it through 12 months on three or four months of actual good business. Compound that with huffy online commentary from the local entitled, shrieking about restaurants of being "pricy," "greedy" and "more expensive than the restaurants at home," and even the bravest downtown restaurateur can be tempted to throw in the towel. 

Those who are financially strong enough can choose to buy the property. If they are actually able to pull that off (many landlords wouldn't dream of selling), the "rent" they pay at least goes to increase their equity. In a recent Facebook post, Richard Krick, the former co-owner of Summer House, stated, "...I can tell you that the [downtown] rent is out of control and had I not been lucky enough to buy my property I too would have had to call it quits." Purple Parrot owner Hugh Fuller, a wise businessman and property owner, responded, "Absolutely. That's the only way [to do it] downtown. I feel like I was one of the lucky ones."

Restaurant Business Magazine quotes Bill Post, restaurant consultant and co-founder of the Chicago-based Roti Mediterranean Grill chain: "As landlords continue to raise rent at an alarmingly fast clip, it's becoming more difficult for operators to abide by the Golden Rule of 10: Never let rent exceed 10 percent of your gross profit. So if negotiation is out of the question, the remaining options are to close, relocate or eat the cost." A golden rule indeed. 

The vagaries of small-town regulation, inspections and the like can cost an entrepreneur thousands of dollars as he or she waits two or more months for a signature on a license/approval for this, that or the other thing. Smug politicians go through the motions of trying to find "solutions" for the very problems that some of them actually created. Without naming names or pointing fingers, those familiar with the trials of doing business locally know exactly what I'm talking about. 

The most difficult environment for finding and keeping good help is the resort market. The simple fact is that a significant percentage of those who apply for jobs are not qualified, while others either move on to the big city, or go back to school. One of the summer casualties was a restaurant that was indeed doing well. The owners wisely came to the conclusion that they had no choice but to close in order to fully staff their other locations. Both of those locations are going gangbusters. 

One of the reasons why we are blessed with so many good restaurants here at the beach is that more and more people are moving here full time. Cause and effect (not to mention the inscrutable Law of Entropy) correctly dictates that more businesses will open to serve this increased population. Theory and conjecture are fine - until reality sets in: There's only so much square footage a block or so from the sand. So restaurants (and businesses in general) have nowhere to go but out onto Coastal Highway. The dark cloud within that silver lining - at least for downtown eateries - is that customers now have more choices. Add that to the ongoing shortage of downtown parking (meters/permits notwithstanding), and all of a sudden the downtown entrepreneur is faced with yet another burden over which he or she has no control. 

So how do restaurants stay in business? One way is to employ the economies of scale. A group that owns three, five or 10 restaurants - especially if they are run cost effectively - enjoys safety in numbers. Small trends up and down are not as dangerous as they can be to a single location. Another way is to build a stellar reputation by providing consistently excellent quality over time. Many of our one-location eateries downtown have earned that reputation. And out of that grows longevity. And out of longevity grows credibility. People will go downtown, pay to park and even ... walk ... to enjoy the predictably good food and service at these places. 

Another option is to carve out a niche with a particular concept, a one-of-a-kind ambiance, or even a particular kind of ethnic food. If done well enough and consistently enough, people will welcome this as a change and come time after time. 

Restauranting is a labor of love - with equal parts of both, applied day in and day out in spite of the forces working against you. It has to be a labor of love - why else would anyone do it?

  • So many restaurants, so little time! Food writer Bob Yesbek gives readers a sneak peek behind the scenes, exposing the inner workings of the local culinary industry, from the farm to the table and everything in between. He can be reached at byesbek@capegazette.com.

    Masthead photo by Grant Gursky. Used with permission from Coastal Style Magazine.

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