Amid the belt-tightening, Austin restaurants let theirs out a notch
As the overall economy tries to decide whether it's recovering from the recession, restaurants are giving Austinites more places to figure it out over dinner.
High-profile recent openings include Congress Austin at the Austonian, the gastropub Haddingtons , the trailer-to-restaurant transition Barley Swine and a string of other mid- to high-end restaurants.
As bright spots begin to emerge in a restaurant environment hit hard by two years of economic drought, the question arises: Can Austin fill that many seats?
The National Restaurant Association predicts that U.S. restaurant sales in 2011 will be 3.6 percent higher than in 2010. The group's prediction of 3.9 percent growth for Texas places the state's numbers among the nation's six highest. The association rates Texas at the top, along with Florida, for restaurant job growth at 17 percent over the next 10 years.
In a 2010 survey conducted by the restaurant guide publisher Zagat, Texas diners were among the least affected by the weak economy, with 32 percent saying they were eating out less often, the lowest percentage among eight national markets. In New York City, for example, 46 percent said they eat out less. The national average was 39 percent.
"We know that the Texas economy and particularly the local economy performed better during the recession than the national economy," said Jeff Trigger, president of La Corsha Restaurant Partners, which manages Congress, Bar Congress and Second Bar + Kitchen. "It's always a good time to open if you know the community you're serving and you've got the right product offering."
The Austonian restaurants go after two markets: higher-end casual dining and expensive fine dining. Second Bar + Kitchen is the more casual venue, with pizzas and burgers for around $12 and entrees from $16 to $28. At the high end, Congress offers a seven-course tasting menu for $95.
Trigger said the model is working. "We've been rocking; there's no question about it," he said. "We have standing reservations already at Congress for every day of the week."
Michael Polombo, who owns Austin's Mulberry restaurant and New York City's Bin 71 and Barcibo, said he went more by instinct rather than numbers when he opened Haddingtons last month with Mulberry chef Zack Northcutt.
"There was no empirical data to say that this would be a good thing to put here," he said. "It's been a great turnout thus far. Austin's buoyed by the public sector. You have teachers, UT, the state Capitol and all that. I think that's one of the reasons why we don't see the issues that a lot of other cities do."
Polombo is also a partner in a new bistro called Barrique in New York , where he said the economic downswing has an upside: "It's easy to get a commercial space now in New York."
One chef seeking a new home for his Austin restaurant said the spaces he's looked at are renting for what similar properties commanded before the recession. Austin's trailer scene isn't immune to real estate issues generated by the nascent recovery. John Galindo of Izzoz Tacos closed his trailer in December rather than pay a rent increase on a South First Street lot that was adding another food trailer. Izzoz reopened a few blocks down South First this month.
Outside the spotlight of the newest places in town, some established restaurants are showing signs of life. Figures from state records of mixed-beverage tax receipts show a mix of Austin casual and expensive restaurants — both local and franchised — posted gains the last quarter of 2010 compared with 2009. The figures don't include food sales, but they're an indicator of customer traffic.
• Black Sheep Lodge, a South Austin burgers-and-beer joint, was up 20.5 percent.
• The Barton Springs Road location of the Austin-based inexpensive Tex-Mex chain Chuy's was up 5.6 percent.
• The Chili's franchise at 6619 N. Interstate 35 was up 7.7 percent.
• The upscale North Austin steakhouse Cool River Cafe, which also has locations in Dallas and Denver, was up 6.7 percent.
• The long-standing fine-dining restaurant Jeffrey's was up 15.8 percent.
Alcohol sales at Threadgill's World Headquarters, the Riverside Drive home of chicken-fried steak and live music, were down 3.4 percent, despite what company Comptroller Gracie Taylor said was a stronger overall holiday season in 2010 than the previous year. She attributed the decline to a smaller number of concerts in November 2010 compared with November 2009.
Concerts are the primary driver of alcohol sales, she said.
The restaurant surge is cold comfort for places that have recently knuckled under.
Those include the Backstage Steakhouse, where owner Kent Hayner said he had 28 employees and $1 million worth of business before the recession but saw both of those numbers drop more than 40 percent by the time he closed in September.
Other recent casualties include Kyoto, Kenobi, Jaime's Spanish Village, Richard Jones Pit Bar-B-Q , Joe DiMaggio's and Katz's Deli .
The closings have come even as new restaurants have arrived, among them Soleil at Lake Travis, Vince Young Steakhouse, Zed's, Hopdoddy, the Backspace and Trace at the W Hotel.
Recovery or not, the industry must contend with perceptions as well as numbers, said Richie Jackson, CEO of the Texas Restaurant Association , a trade group with 5,000 members accounting for about 12,000 restaurants.
"I think there have been lots of messages focused on consumers about eating out," he said. "Whether it's Suze Orman, who says you shouldn't go eat out, or Wal-Mart, who's trying to promote their grocery business and saying how much you can save by eating breakfast at home. After a while, I think those messages, combined with the down economy, begin to take their toll on the consumer's psyche."
Jackson said consumer focus groups have shown a pent-up demand for dining out. "They just need a little nudge so they don't feel guilty about it," he said.