Spending cuts, competition, changes in taste affect fine-dining restaurants
URBANA — Fine-dining restaurants are finding it more difficult to succeed as competition increases, tastes change and clients cut back on spending, observers of the local restaurant scene say.
Kennedy's at Stone Creek closed last month after 21 years in business, 10 of them in Urbana's Stone Creek subdivision. Jim Gould closed just before Christmas after six years at Neil and Main streets in downtown Champaign.
Peter Tomaras, a consultant to hotels and restaurants, said high-end retail held up fairly well nationally during the recession, but it was a tougher slog locally.
"This community has a limited market for the highest-end retail, whether it's food or something else," he said. "It's always been a challenge."
Kennedy's owner Luke Kennedy — a restaurant chef and manager for 35 years — said his business got hit hard in 2008 when major clients such as the University of Illinois and Carle cut back on entertaining.
Tomaras said Kennedy had a tough balancing act, operating a fine-dining establishment as well as hosting corporate events.
"Certainly with Kennedy's, they had a lot of corporate parties over the years, and when several businesses no longer did their 'no-limits' Christmas parties, that was tough," Tomaras said.
Fine dining requires that personal attention be given to every plate that goes out, Tomaras said, and when a restaurant becomes diversified and has to cater to a clubhouse, as Kennedy's did, "that can be very distracting to the primary mission of fine dining."
"It's a lot to handle," Tomaras said.
Allen Strong, who operates Silvercreek and the Courier Cafe in Urbana, said fine-dining establishments have been tested by the recession, but so have mid-market restaurants.
He noted that both Cheddars and Chevy's Fresh-Mex bowed out of the local market last year.
Strong said "the curse of Silvercreek is that people thought we were fancier and finer-dining than we wanted it to be."
"We never considered ourselves fine dining," he said, adding that he simply intended Silvercreek as "a nice place where people are comfortable."
But the restaurant came to be a place where people commemorated special moments in their life, he said.
"That's a great compliment, but you've got to put (people) in seats Monday, Tuesday and Wednesday," he said.
Strong said when Silvercreek opened, there was "a triangle of three" special-occasion restaurants — Timpone's, Kennedy's and Silvercreek.
But many others have entered the arena since then, including Cafe Luna, Bacaro and Radio Maria, he said.
"There are a lot more entrants into that genre," he said. "The last 15 years, culinary schools have been churning out grads at an amazing rate."
Plus, TV channels such as Food Network "have raised the culinary IQ of Champaign-Urbana remarkably, not only for higher-quality foods, but also for foods that are healthier, interesting and trendy," he said.
Tomaras said restaurateurs are "facing steadily upward-creeping food prices, and labor doesn't get cheaper."
"There's a lot of competition for the best labor — both back-of-the-house and front-of-the-house — and new minimum-wage laws," he said. "Labor and food are the big costs for people."
Strong said labor is his largest cost and one that's hard to control.
"It's such a difficult business. It's a game of inches," he said.
Utility bills — especially water bills — have shot up, and food costs are constantly creeping up, he said.
"You have to re-evaluate every aspect of the business and find ways to streamline and eliminate waste," he said.
Strong said he had a record December, and this may be his best January yet. "I'm sort of shocked. I don't want to jinx it," he said.
But Strong said his business was affected by the 2008 recession right away.
"One of the things we felt immediately was corporate. There were not nearly as many corporate dinners or functions, but they're starting to come back," he said.
The slashes in spending were particularly noticeable in the pharmaceutical industry, Strong said. Pharmaceutical representatives often hosted dinners and banquets to do product introductions, "but those functions got cut back hugely," he said.
Plus, restaurant owners are having to adjust to changes in taste.
"Our entire culture has gone to a much more casual take on that," Strong said.
"There's much less of the country-club mentality than there used to be. The newer generations are not as interested in that. ... They're not as interested in the experience of feeling like they need to be dressed up."
Tomaras said he thinks fine-dining restaurants were hurt not only by middle-class patrons who had to cut back on special occasions, but also by wealthier customers who simply ate out less often.
Many high-end customers belong to country clubs and have to eat so many meals at the clubs, he said.
"If they cut back (eating out) to two times a week instead of three, the (meal they cut) is not going to be at the country club, it's going to be at a restaurant," he said.