Dining entrepreneurs say there's room for new restaurants despite broader downturn

The financial crisis rippling through the economy has derailed consumer confidence and, as a result, curbed Americans' appetite for eating out.

NPD Group, a national research group, recently said that 57 percent of consumers surveyed plan to cut back on their restaurant visits. Yet while many big dining chains are curbing their expansion strategies to conserve cash, culinary entrepreneurs in the Charleston area still are cooking up plans to open new places to eat.

With worries about securing financing and looking out on an empty dining room, it prompts the question: Who would open a business that relies almost exclusively on discretionary income under these conditions?

Casey Glowacki would.

A part owner and chef behind the local Five Loaves Cafe chain, Glowacki said customer visits are up and that revenues are on pace to post a 10 percent gain over last year. He's also seeing more new diners, whom he suspects are trading down from high-cost establishments to his moderately priced menu since the global financial crisis deepened this fall.

Glowacki said local residents still can scrape together enough cash for a quiet night out, and it's those customers who many of these new restaurant owners say they're targeting. Offering entrees priced under $20 and more modest atmospheres, they see a chance to pick up customers who no longer can afford the tabs at high-end establishments.

That strategy could work in this economy, said Jim Moring, a Charleston-based real estate broker with The Commonwealth Co. Inc. who specializes in restaurant sales.

"I don't think that now is a bad time to open a restaurant if you open the right type of restaurant," Moring said.

Going casual

As economic conditions shift the dining pendulum toward casual trends, some dining entrepreneurs say they're preparing to swing with it.

"I hate to say this because I've been a part of it for so long, but the opulent dining with the $100 bottles of wine and seven-course tasting menus are over," said local chef Ken Vedrinski.

Vedrinski said he can't recall the last time he sold a bottle of wine at that price at his high-end Italian restaurant, Sienna on Daniel Island, where he recently sold his interest but will remain as a consulting chef. By contrast, he said wine bottles are flying off the racks at his new establishment, Trattoria Lucca, in downtown Charleston.

His new venture, which opened in September, occupies a tiny space on Bogard Street but has exceeded expectations since the first week, Vedrinski said. He speculates that it has to do with its urban location and its prices, which are less expensive than at Sienna.

"I do think that some people are using it as a Ken Vedrinski experience on the cheap," said Vedrinski, who plans to open a restaurant in the Cigar Factory building on East Bay Street.

Matt Bolus, chef and owner of Red Sky, said he's shooting for a "nonpretentious atmosphere" at his recently opened restaurant on Seabrook Island. He renovated an older facility and is offering a simplified menu. He even brought average prices down a few dollars by using less expensive cuts of meat such as hanger steak.

"It's a tough market, but if you do honest food and give great service, they will come back," Bolus said. "There are a lot of people who are never going to cook for themselves, and you've got to make sure it's worth their time and dollar to come out."

Shine, a yet-to-open restaurant with international influences, also is aiming to lure former fine diners up the peninsula to its location at King and Line streets. Owner Dean Johnson, who hopes to open the restaurant early next year, said he is trying to create an atmosphere where diners will feel like they can eat several times a week without getting a dose of buyer's remorse. Johnson also will be relying on alcohol sales, which will include exotic mixes such as saki martinis, to help his bottom line.

"When you look at certain industries you're going to be able to make money at — food and alcohol, funerals and garbage — there's part of our culture that's always going to be consuming something, regardless of the economy," he said.

Upper crust

But the notion that Charleston's fine-dining scene is in a state of peril doesn't shake longtime restaurateur Dick Elliott, whose Maverick South Kitchens Inc. operates High Cotton and Slightly North of Broad, both on East Bay Street, and Old Village Post House in Mount Pleasant. The company also is expanding to the Hammock Shops Village on Pawleys Island.

Though Elliott acknowledged a slight softening in business, especially with a sharp drop in corporate entertainment revenue, he asserts that there's still enough business in the Charleston dining market to go around.

"When the couple who lives at Park West with two children want to go out to dine, they are going to be attracted to places that are very good and close by," he said. "That's what I think these new restaurants offer, and I hope they do well and I hope they're successful, but that doesn't mean they'll take anything away" from the high-end market.

Some of these new restaurants need to open up just to meet growing demand, he said. But when it comes to the ultimate dining experience, especially the type that well-heeled visitors are seeking, the pricier establishments will get their share of the pie, Elliott said.

Moring of the Commonwealth Co. agreed, saying the pull of the region's fine-dining scene is not to be underestimated, even in tough times. He noted that the top-dollar Oak Steakhouse on Broad Street was crowded on a recent Tuesday night.

"I think there's enough people that want to reward themselves," Moring said.

But even places such as Oak are trying to adapt to the new economic reality. Part owner and head chef Brett McKee recently announced plans to incorporate more moderately priced Italian dishes into his pricier menu to help capture a crowd that can't spring for a $40 or $50 steak.

Meals and deals

The upside to the overall downturn for upstart restaurants is that terms are more favorable on everything from kitchen equipment to real estate.

Bill and Tommy Hall, a father-and-son team who have worked in hospitality throughout the Southeast and Texas, said they found a good deal on stoves for their yet-to-open Halls Chophouse on upper King Street. The equipment was previously owned but never used.

Meanwhile, Glowacki of Five Loaves has begun scouting locations in West Ashley knowing that landlords are more willing than ever to cut deals to attract tenants. He said he expects to negotiate hard deals on his lease and, when it comes to renovations, with contractors who, for the moment at least, are scrambling to find work in many cases.

In some ways, according to Moring, it's could be the best opportunity to get into the restaurant business since the late 1980s or early 1990s.

"Then again," he said, "if you and I wanted to buy some houses, we'd probably get the best deal on land."

Reach Katy Stech at 937-5549.