With the high incomes of the bankers, lawyers, accountants and lobbyists who work in its office towers, the Downtown core would seem to be well-suited for certain types of high-end dining, specifically, ones where clients are wined and dined, deals are consummated, and expense accounts cover the bill. Furthermore, supplemental demand for such traditional upscale food and drink offerings is generated by the “high culture” performances and shows at the Progress Energy Center for the Performing Arts. This audience can make even more of a contribution now with the new R-Line (Downtown circulator), which has a stop at the Center.
So why are current high-end dining businesses struggling?
1. The impact of the poor economy . . .
Sit-down dining establishments with high price points in the Downtown core, like Fins and The Mint, appear to struggle, while ones offering better value and less flamboyance, such as Caffe Luna, The Raleigh Times and Sitti, thrive. Entrees in the low $20’s seem to be the ceiling. Of course, this might be a function of the poor economy of 2008/2009, or, perhaps, the restaurants themselves.
2. Downtown core not ready yet . . .
Clearly the recent economic downturn has hurt the establishment of more high-end dining establishments. And, developers of the RBC Plaza and The West condominiums would certainly prefer to fill their prime ground-floor space with a high-profile, high-end brand like, for example, Ruth’s Chris Steak House, Capitol Grille, The Palm or McCormick & Schmick’s, but such operators do not seem to feel that the Downtown core is ready yet.
3. There are alternatives outside of Downtown . . .
Raleigh has long been a city where the center of gravity falls not in Downtown, but along the Beltline, and particularly, along its northwesterly stretch, close to its most affluent neighborhoods and largest employment base (Research Triangle Park). High-end operators tend to first look to suburban centers like Crabtree Valley Mall.
4. Competition from other cities . . .
National brand operators might not even be looking at Raleigh at all. In trying to lure such names (or entice them to open a second restaurant), Raleigh is competing with other opportunities across the U.S., and it does not always fare especially well in that competition, with national brands historically enjoying higher sales at their locations in the Northeast and in Florida and therefore focusing more heavily on those markets.
A Recommended Solution is to focus on Regional Chains and Proven Local Restaurateurs.
Of course, the economy will ultimately recover, Raleigh will likely continue to grow (and perhaps become more appealing vis-à-vis one-dimensional markets like Florida that have been pummeled in this recession), and the larger brands will look closer at a first or second location. But in the meantime, landlords might look instead to regional chain-lets or, better yet, proven local restaurateurs, like Jason Smith, the chef/proprietor of 18 Seaboard or Ashley Christensen, the chef/proprietor at Poole’s Diner.
In the end, such local concepts might be better for the city’s overall image. In choosing where to eat, business travelers and other visitors might not be looking for something unique — indeed, they might want a known brand — but if they have no choice but to experience something they have not seen before, they would probably leave with a more positive impression of Raleigh (and relay the same to others).
Source: The information presented here was taken from a Retail Market Analysis & Positioning Strategy conducted on behalf of the Downtown Raleigh Alliance by MJB Consulting, a NY-based national retail planning and real estate concern. Data was gathered over a six-month period from August 2008 through February 2009. The study was fully paid for by corporate contributions.