Why do restaurants close?

We’ve all been there. You put on your best outfit and head to your favorite restaurant - only to find it shuttered. As dining columnist for Pioneer Press since 2007, for me this scenario has been especially poignant as a sizeable portion of the 300 restaurants I have written about and photographed on the North Shore has closed. The latest loss is Bistro Bordeaux in Evanston.

Back in 2009 when I first wrote about it, owner Pascal Berthoumieux was passionate about showcasing authentic French cuisine. He even had ‘L’authentique’ stenciled right on the front window because foodies, a burgeoning concept at the time, would “know the difference.”

What’s causing all these mainstays close? Is it patrons' insatiable thirst to find what’s new, what’s hot, what's next? Is it increased competition? Or could a dwindling disposable income be driving people to alternative leisure and dining choices?

The Bureau of Labor Statistics cites 2015 to 2016 as the first time in history that Americans spent more money at bars and restaurants ($54.857 billion) than they did on groceries ($52.503 billion). So much for the question of dwindling disposable income.

So then, is it a cultural shift? According to Pascal, the “Cheers” era of the corner bistro where everyone knows your name, dining habits and the owner gets your cocktail before you even ask for it is over: “(Patrons) just go to the hottest new place and they know that six months down the road there will be another, and another.”

Consequently, there has been an uptick in the volume of eateries, with a trend towards investor group or corporate-owned “concept” or “themed” restaurants.

“They open a new concept. It’s hot and trendy. Two years later they scrap everything and start over,” said Berthoumieux. And, because of their size, they also don’t have to play fair.

“If they see someone doing well, they won’t have a problem opening the same concept right next door to try to take your business,” said Berthoumieux.

John Des Rosiers, chef/owner of Inovasi and Otherdoor in Lake Bluff recently closed his gourmet prepared-food store, Wisma which, over its 6-year lifespan, had grown to three stores and extended its grocery offerings to 80 retail outlets.

“When you do really well…your competitors start to do things to you to knock you out of the way,” agreed des Rosiers. “It’s like a bunch of five-year-old kids playing grown up,” he said, citing everything from competitors buying all available shelf space to slashing prices noncompetitively, to encouraging vendors to move items around in stores and confuse shoppers.  

Ironically, des Rosiers points to the frequent restaurant closings as the significant cause of so many new establishments opening, wherein they create veritable turn-key opportunities for new owners. “It’s cheap (to open a new restaurant) now because so many places have opened and closed,” he explained.

He knows whereof he speaks as his own Inovasi was built out in 2004 to the tune of 1MM by a previous occupant. “We never would have made it if we had to spend that much money to build out a space,” said des Rosiers. In addition to Wisma, des Rosiers has also closed Moderno (formerly Royce, formerly Rosebud). He estimates there are at least 30 percent more new restaurants operating and competing for the same dollar.

“You haven’t had 30 percent increase in population so you don’t have more people eating out, and you haven’t had a 30 percent increase in spending on eating out but you have 30 or 40 percent more restaurants,” estimates des Rosiers.

Inevitably, as revenue is spread over more restaurants, more are going to close.

“The fact of the matter is that the dining public is fickle,” said Michael Lachowicz, chef/owner Restaurant Michael and George III in Wilmette, “And they have the right to be because the expenses keep going up for restaurants and (consequently) so do the costs to the guests.”

So is it only large-scale, corporate-owned operations who are able to play in this space now by out-pricing the competition and weathering the down times? Can sole proprietors still compete? 

To do so, “You have to keep your ego out of it and think financially,” said Lisa Norcia who sold her Vibe at 1935 in Highland Park in 2014. When the one-time Wall Street hedge fund manager-turned-restaurateur opened it in 2009, Norcia hadn’t expected it to morph into a live music venue.

“I think restaurants start out with a plan and, if the audience doesn’t respond the way they expected, they might need to (do) what does work,” suggested Norcia.

“If you truly love to cook – then stay at home and cook. It’s not a restaurant game; it’s business,” echoes Lachowicz whose addictions nearly cost him his restaurant. From experience, he cautions that only those passionate about the actual business of running a restaurant should get into it.

And if you don’t want to see your favorite places shut their doors permanently, “You better support those small, independent restaurants,” said Berthoumieux. “Those are the ones that are bringing diversity; those are the ones that are employing people who are living in your community, paying taxes in your community - as opposed to those big corporations that are coming and bullying their way in the dining scene.”

“The small people around are never going to make it if (patrons) choose to go to a big corporate places,” said des Rosiers, “They can’t.”