PrintPrintBy Ashley Fletcher Frampton
aframpton@scbiznews.com
Published July 6, 2009
Six months ago, fear dominated the conversations of many people dining out in Charleston.
“Everybody was fearful,” said Mickey Bakst, general manager of Charleston Grill at Charleston Place Hotel. “They were fearful of spending, they were fearful of their future, of their accounts being lost, of their 401(k) being depleted. They were fearful of their job.”
But more recently, dinner dialogue has gone back to other topics, Bakst said. He takes it as a sign that what has been a rough period for the restaurant industry could be easing as people move beyond the paralyzing fear.
Others in the local restaurant industry see positive signs as well.
Chef Fred Neuville said that as of this spring, the number of guests at the Fat Hen, one of his Johns Island restaurants, has returned to the levels seen this time last year. Last fall, both sales and traffic were down.
People still aren’t spending at the same levels as last year, Neuville said. But the revived traffic indicates that business can only get better.
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A cook at the Fat Hen restaurant adds fries to a plate. Owner Fred Neuville said traffic at the restaurant has returned to last year’s levels, but spending is still down. (Photo/Leslie Halpern) |
Even as it improves, chefs said business probably won’t return to what it was in the recent past, at least not any time soon.
“This was a reality check for a lot of people,” Neuville said.
Revenue from the city of Charleston’s hospitality tax, a levy on prepared food and beverages, was down 7% on average for the first four months of 2009 compared to the same period last year. The revenue indicates the level of restaurant food and drink sales.
From February to April, the year-to-year revenue gaps did not narrow each month; instead they widened slightly.
Tied to tourism
As the local tourism industry has suffered — the number of hotel rooms sold this year is down 6% — so have the restaurants, Bakst said.
“We took a hit in this community, which is so tied to tourism,” Bakst said. “People stopped coming.”
Chefs say one notable change has been with business travelers.
Neuville said the Fat Hen has seen fewer patrons staying at Kiawah and Seabrook islands for business trips or corporate meetings — patrons who bring expense accounts.
Chef Brett McKee has seen the drop-off in business travelers, especially those with Wall Street ties, at Oak Steakhouse, his downtown restaurant.
“They would be golfing all day, and they would come in and just drop ridiculous money,” McKee said. “Big time on the wine, big time on the steaks.”
McKee said big events that brought in tourists this spring didn’t necessarily pay off for restaurants. For example, the Food + Wine Festival, held in early March, reported record ticket sales. McKee said the event does more to make people aware of Charleston as a dining destination than to pack his restaurant that weekend.
On the other hand, the more recent Spoleto Festival USA, one of the area’s most high-profile events, reduced its budget and number of performances this year, expecting smaller crowds. Not unexpectedly, the restaurant business generated by festival-goers was down, McKee said.
Creative changes
Overall business at Oak Steakhouse is down about 5% to 10% on a weekly basis from last year, McKee said. He said the restaurant is still making a profit, but he’s has to cut costs across the board to do so.
McKee has also changed his game a bit. Known for its pricey steaks and sides, the restaurant started offering three-course Italian meals on Sunday nights for $30. Another change was brought about by a leaner advertising budget.
“I have to get more creative on how I get people in,” McKee said. “So where my marketing scheme used to be more print media, now it’s more what I call my urban warfare media.”
That strategy involves sending staff to talk to locals in the hospitality industry – concierges, valets, drivers, retail employees and others. Oak employees tell these workers that if they send people to the restaurant, they’ll earn free food.
“I was always taught as a kid, if you need a leaf, shake a tree,” McKee said.
A growth segment
Bakst said the recession has probably hit higher-end restaurants harder.
“People who have less money are fearful of less,” he said.
On the other end of the spectrum — the fast food sector — the economy has provided growth opportunities for some. Charlotte-based Bojangles’ restaurant chain is adding eight stores to the Charleston area over the next two years. The first opened July 3 on James Island.
“We had our best year ever in 2008 and best quarter ever first quarter this year,” said Eric Newman, Bojangles executive vice president.
Recession-time dining budgets have played a role in Bojangles’ recent success. That, combined with lower real estate prices and construction costs, has driven the company’s expansion plans in several markets, he said.
“It’s actually a time I think we can increase our market share,” Newman said.
Reach Ashley Fletcher Frampton at 843-849-3129.
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