Area Restaurant Closings Are Called Signs Of The Times
By KENNETH R. GOSSELIN, Courant Staff Writer
March 18, 2008
In late 2005, Texas Roadhouse opened at the Charter Oak Marketplace in Hartford, bringing its frontier fort look and fall-off-the-bone ribs to a new shopping center that created some excitement when it replaced a troubled public housing complex.
But three weeks ago the casual-style restaurant, part of a national chain, closed, and the building was boarded up.
The closing comes amid a shakeout in the restaurant industry as the country — and Connecticut — face the strong possibility of a recession and lost jobs.
Consumers are feeling increasingly pinched by higher food, gas and home heating oil costs. Many were the target customers of casual dining restaurants, and are now are seeking cheaper, fast-food alternatives.
At the same time, the chain operators are seeing their own costs for food, energy and labor rise, according to the National Restaurant Association.
"It's a double whammy," said Hudson Riehle, senior vice president of research of the restaurant association.
In January, 49 percent of the restaurants surveyed by the association reported lower sales at facilities open at least a year. On top of that, 54 percent said customer traffic fell in January for the fifth month in a row.
Executives at restaurant chains such as Texas Roadhouse, Chili's and Romano's Macaroni Grill say the market is one of the toughest they have encountered in years. And now the growing number of chain restaurant closings in the Hartford area threatens to litter the commercial real estate landscape with abandoned buildings.
In the past three months, the Buckland mall area in Manchester has been especially hard hit: Hops and Vinny T's have already closed, and Romano's Macaroni Grill will stop serving patrons Wednesday. Old Country Buffet remains open, though its parent company filed for bankruptcy protection in January and closed about 50 restaurants nationwide. A spokesman said the company is still reviewing locations.
"The country has never had as many restaurants as it has now," said Tim McNamara, a retail properties broker at SullivanHayes Cos. in Farmington. "Naturally, if there is a downturn in the economy, someone is going to get hurt."
Restaurants often fail for a combination of reasons, and even in good times, there can be mismanagement or changing dining tastes.
Travis Doster, a spokesman for Texas Roadhouse, said the Hartford restaurant closed because the location — even though it was next to a busy shopping center with a Wal-Mart and the heavily traveled Flatbush Avenue nearby — ended up not being a good one.
But even poor locations can hang on when the economy is humming and consumer confidence is high.
CORRECTION: Yvonne Kenney was not employed at the Texas Roadhouse in Hartford when the restaurant closed in February. This story, which was published Tuesday, incorrectly implied that she was. Kenney no longer worked at the restaurant as of November, but she had kept in contact with former co-workers. The story reported that Kenney said employees were caught off-guard by the closing. A company spokesman said Texas Roadhouse took many steps for employees at the closing, including job counseling and assistance, severance pay and transfers to other restaurants for some.
Yvonne Kenney, who started work at Texas Roadhouse when it first opened in 2005, said employees were caught off-guard by the sudden closing.
"We were dumbfounded," said Kenney, who worked as a training coordinator for new wait staff. "We didn't see it coming. Business was pretty good; some nights we did extremely well."
She said most of the 100 or so workers at the restaurant remain out of work.
The Macaroni Grill in Manchester is the second in the Hartford area to close in two months. The first was the one at Bishops Corner in West Hartford. Some of the employees who lost their jobs in West Hartford went to work in Manchester.
Brinker International Inc., the owner of the Macaroni Grill, Chili's and On the Border chains, wouldn't comment on the specific reasons for closing the Manchester restaurant, the last remaining Macaroni Grill in Connecticut. The company, which is trying to sell the Macaroni Grill chain, has made similar closures in other states.
Douglas H. Brooks, chairman and chief executive of Brinker International, told analysts in a conference call in January that "we are operating in one of the toughest environments in company's history." Brooks cited the economy, a decline in consumer confidence and increased costs for food, energy and labor.
In Manchester, McNamara said competition among restaurants had grown fierce, especially since several had overlapping Italian themes. And although the restaurants did a good dinner business, lunch traffic — a key to any restaurant's success — was more spotty.
McNamara said restaurants that are closing are still responsible for paying rent if they are in the middle of a lease and finding another tenant to take over the property.
Mark Pellegrini, Manchester's economic development director, said he is concerned about the recent spate of closings around Buckland. But he's waiting to see if new operators start to show interest.
"If they are still vacant in six months," Pellegrini said, "then you have to scratch your head about the viability of these locations."
Reprinted with permission of the Hartford Courant.
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