Consumers ditch food dining chains for local, fast-casual eats

Move over chain restaurants, mom and pop — or independent — eateries are becoming more popular as the economy continues to improve from the Great Recession.

Restaurants like Meadowlark in Washington Twp., Gracie’s in Middletown, or Meadows in Springfield are flourishing as hundreds of chains like Chili’s or Applebee’s have closed this year.

Despite chain restaurant closures, Americans are eating out more than they have in recent years, according to the U.S. Commerce Department’s Bureau of Economic Analysis. Consumer spending at restaurants — including beverage sales — increased to $605 billion (an inflation-adjusted annual rate) in the second quarter, up 4 percent from $584 billion two years earlier — but their money isn’t going to chain eateries.

More than 700 chain restaurant locations have closed this year already in the U.S., according to food industry consulting group Pentallect.

Locally, restaurants in Ohio brought in almost $1 billion in sales last year, and restaurants continue to produce positive same-store sales in Ohio. The rate of increase in sales has been lower than earlier this year and down from 2016, according to the Ohio Restaurant Association.

“Restaurants in Ohio are generating sales growth, but there was a deceleration during the recent quarter, especially in certain segments such as family dining,” said John Barker, president & CEO of the ORA. “Quick-service restaurants are generating stronger growth with a smart combination of value offers and menu pricing.”

Gracie’s in Middletown, which opened in early June, saw steady traffic throughout the summer months and expects good business through the holidays, said co-owner Max Comisar. The restaurant’s “focused” menu allows for change following feedback from customers — something that chains can’t do on a whim, he said.

“We’ve definitely seen people out to support the little guy,” he said.

Meadows Restaurant in Springfield has seen the same customers come in for the past 10 years. Owner Terri Katawick said the personal touch and good service is something customers can’t get at chain restaurants.

“My staff is great. They know all the customers and the customers know them,” she said.

But chain restaurant closures have impacted the local area, leaving hundreds without jobs. McCormick & Schmick’s Seafood abruptly closed its location at The Greene Town Center in Beavercreek in late September. The corporate parent of McCormick & Schmick’s Seafood has closed or shed nearly one-third of the restaurants nationwide since purchasing the chain in 2012.

“Our lease term came to an end, and due to rising real estate costs, we elected not to renew our lease,” Howard Cole, chief operating officer of Landry’s Inc., told this news organization.

Other restaurants like Applebee’s and Outback Steakhouse has struggled to keep its base clientele. Earlier in the year, Bloomin’ Brands Inc. announced it would close approximately 40 “under-performing” Carrabba’s, Outback, Bonefish Grill and Flemings restaurants will be closing by the end of 2017.

“Although 2016 was a challenging year for both Bloomin’ Brands and the industry, we made real progress on our strategy to reallocate spending away from discounting toward investments to strengthen brand health, ” Liz Smith, CEO of Bloomin’ Brands, said in a statement.

Bloomin’ Brands Inc. opened 42 new restaurants in 2016, including 30 in international markets. However, reported restaurant sales were down overall in 2016, and in the fourth fiscal quarter.

Dan Young, former chair of the Ohio Restaurant Association and co-owner of Young’s Jersey Dairy Farm, said people are still going out to eat but they want “value and something interesting.” Young said there was an influx of dining options and some independent restaurants took a hit during the Great Recession. Now, that balance is evening out slightly with chains taking the hit.

“I do think folks are eating local, or they’re at least considering it now,” he said.

Young said The Golden Jersey Inn and the dairy offer more than just food and ice cream — it draws people in with entertainment too. The dairy brings customers in from Yellow Springs, Dayton and Springfield not only to eat, but to enjoy the farm animals and other attractions — they’ve made it a destination experience for consumers.

“People do like to go out to eat,” he said. “And of course, they don’t have to wash the dishes.”

Mark Fisher contributed to this story.

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