Business

Despite downturn, new restaurants open in the suburbs

Posted July 17, 2010 11:00 pm

By Anna Marie Kukec

While some eateries around the suburbs have closed their doors, others have opened, giving new hope to the battered restaurant industry here.

Mint Julep Bistro in Palatine, The Road House in Elgin, and others in prominent and high-rent downtown locations have or will close. A variety of reasons led to their demise, but the recession played a crucial role. High unemployment, credit problems and bankruptcies narrowed the customer base and caused many restaurants to throw in the napkin.

Still, others took advantage of the times and opened or plan new eateries, giving suburban diners and neighboring businesses new hope in tough times.

Newcomers include the Tilted Kilt, a Celtic-themed sports bar chain opening in Roselle, Oak Brook, Gurnee and St. Charles. It's part of the Tempe, Ariz.,-based chain's plan to open seven new locations in the next two years. Chaudury's Fresh D'Lite, a healthy fast food place, is expected in Geneva.

Yet the road ahead is still a bumpy one, experts said.

"While the restaurant industry is on the road to economic recovery, it still has some ways to go," said Annika Stensson, spokeswoman for the Washington, D.C.-based National Restaurant Association. "This year is expected to be the best for the industry since 2007, but it's still not without challenges."

The association is projecting restaurant industry sales to reach $580 billion in 2010, a 2.5 percent increase over 2009 sales. Adjusted for inflation, growth is expected to be essentially flat, an improvement over the last two years of real sales decline, Stensson said.

While the future appears brighter, recovery in the industry is expected to be "gradual and continue into next year and beyond," she said.

In Illinois, restaurants statewide are expected to post sales of $18.8 billion, up 1.9 percent over last year, the association said.

Before this optimism, however, the numbers showed just how tough things have become for restaurant owners. For the year ending April 2009, visits to restaurants nationwide declined by 3 percent. The quick-service restaurant hamburger category did slightly better with visits down about 2 percent. The quick-service restaurant segment represents 78 percent of the total restaurant industry, according to The NPD Group, a research firm in Rosemont.

NPD data also shows that the Chicago and suburban region had 17,960 restaurants this spring, compared to 18,181 restaurants in spring 2009, a decrease of 221. That includes both independent and chain restaurants.

Restaurant traffic has been down since January 2009 and the declines have been the steepest since the firm began tracking them in 1976, NPD industry analyst Bonnie Riggs said in a report.

The industry is improving but won't be out of the woods "until the economy stabilizes, the unemployment picture improves, and consumer confidence maintains positive momentum," she said. The company forecasts that the industry won't begin to recover its loss in customers until the second half of this year.

Restaurants that closed in the last 18 months couldn't withstand being battered by the recession. Those that did a good job worked hard to cater to the customer, said Isidore "Izzy" Kharasch, a Deerfield-based restaurant expert who consulted for Michael Jordan's, Mike Ditka's, Harrah Casinos and others.

"Those who were interested in getting their best customers to come out more often found ways to do that and survived," said Kharasch. "They were doing it through loyalty."

Surviving restaurants have learned to adjust to the times. Many have provided specials, lowered prices, changed menus, offered coupons or provided other incentives to keep or encourage loyalty, he said.

Internally, many eateries cut staff, lowered costs and ran a tighter ship. Those that hired did it sparingly, Kharasch said.

"Some restaurants are getting good chefs at a lower price," Kharasch said. "Maybe they'll give them less money now, but when they do well later, they could be taken care of along the way."

Also, many who eat out are staying in their own neighborhood, instead of going to downtown Chicago. They're hoping to save travel time, parking fees and often higher menu prices, said Lisa Bradner, president of Downers Grove-based Geomentum, a hyper-local marketing firm that analyzes geographic areas for restaurant placement.

In some suburbs, where people have some dollars to spend, diners still are discerning on when and where they eat.

"There was some recession fatigue," Bradner said. "Everyone had snapped their wallets shut."

But as those wallets loosen up, diners often stay local and take advantage of specials to save money to enjoy themselves, she said.

"If all politics is local, then restaurants are hyper-local," Bradner said.

512350An employee moves liquor out of the Roadhouse Bar & Grill and the Main Event in downtown Elgin as they prepare to close their doors.Rick West | Staff Photographer Here's a sampling of suburban restaurants that have closed during the last two years, and some that have opened, including the Road House, above, and the Tilted Kilt, left, in Elgin. Arlington Heights Pamela's Parkside Grill closed Carlos & Carlos closed Aurora Coco Berry Cafe closed Moe's Southwest Grill closed The Smokey Bones razed and replaced by Chick-Fil-A Jimmy's Charhouse closed, replaced by Andrew's, then replaced by Total Sports Ballydoyle opened Comfort Zone BBQ opened Billy Goat Tavern to open Batavia Golden Corral opening soon Bennigan's closed Elgin The Road House closed Tilted Kilt opened Geneva Isabella's closed LeBerry Bistro closed, reopened as Fresh and Delicious Rib House closed Quizno's closed Citizen Kane closed Dunkin' Donuts closed, replaced by Jersey Mike's Subs Genoa Pizza to open under new owner Chaudury's Fresh d'Lite to open late July Fiora's opened "N" to open Preservation Bread and Wine opened Naperville Nagoya Japanese Sushi opened Tasso's Modern Greek Cuisine opened Laurel Mediterranean Grill opened Jin 28 opened Kumo's Asian Bistro opened Basil's Greek Dining opened Famous Dave's closed Power To the People closed Crème De La Crumb closed Palatine Mint Julep Bistro to close late August Sonic opened St. Charles Bakers Square closed Rex's Cork n Fork closed Sugo's closed Pop's Place moved to Carol Stream; replaced by Main Street Tastee Freeze Sage Bistro closed Bennigan's closed Springview closed, now Gabby's Kitchen Source: Daily Herald staff

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