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OBC Kitchen
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Graze
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Shakespeare and Co.
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OBC Kitchen
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Dudleys on Short
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Wholesome Living Farm Chicken from Honeywood.
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Bill Straus
Corto Lima
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Dan Wu, owner of Atomic Ramen
Lexington’s culinary landscape is in transition.
While destinations like The Summit, the Distillery District and the Hamburg area have seen clusters of exciting new dining options open, at least five local restaurants have closed in the span of a month, leaving some locals worried about the future of the changing restaurant scene and others cautiously optimistic about its growth.
These closings come at the start of one of the more difficult times of the year for food sales, where many establishments, even the more successful ones, can see a substantial dip in profits.
“Between November and the end of February is a very tough time in the restaurant business,” said Barry Riney, a sales representative for US Foods.
In industry terms, there’s only a certain number of “covers” — a single customer — available per week within a population. When you divide that number evenly among restaurants in a given area, there is either enough to sustain every one of them or there isn’t.
“You’re either going to compete or you’re not,” said Stephen Swisher, a restaurant consultant and owner of Paris, Kentucky-based Advanced Restaurant Consultants.
“We’re in that boat where there are a lot of restaurants opening and there are only a finite number of covers available inside of New Circle Road.”
Catering to foodies
Lexington has traditionally been a very chain-heavy market — about six years ago, Swisher said, Lexington had the largest number of chain restaurants per capita of any city its size — while more recently a large number of independently owned, chef-driven restaurants have opened. It’s a sign of both changing tastes and elevated consumer expectations.
Regardless of ownership, new and existing restaurants need to deliver excellent cuisine and service, Swisher said, because Lexington’s restaurant scene is actually getting stronger and a “foodie culture” has become pervasive.
“The average restaurant is far better than it used to be, simply because the average consumer understands more about their culinary tastes,” Swisher said. “They’re starting to deliver a better experience for themselves at home, so they’re certainly expecting more out of professional chefs.”
According to Swisher, there are four things a restaurant needs for success: the product has to be as high quality as possible; that product, as well as the service, has to be consistent; the restaurant’s brand has to be visible; and the money has to be properly managed.
Restaurants that fail tend to be deficient in one, some or all of these areas.
Keeping up with the times
Riney, who has seen the change in the scene firsthand over his 26 years at US Foods, believes that keeping up with the evolution of the industry is essential for sustained success.
“Especially now with social media, it’s a constantly changing market,” Riney said. “Technology and social media are two of the main areas that … if you don’t keep up with it, you’re left behind.”
Swisher cited Atomic Ramen, run by chef Dan Wu and located in The Summit’s food court, The Barn, as a recently opened shop that has done a good job of creating a vibrant new brand via marketing and social media.
“Restaurants are taking on a newer, hipper look,” said Swisher. “It’s just part of our growth.
Covering your bases
Lexington’s ability to support new restaurants also depends on its steady population growth. The city’s population is currently about 320,000 people, an increase of about 25,000 people since 2010. That number is estimated to rise to 400,000 by 2040.
“I think that there’s enough population growth to sustain the restaurants that continue to open,” said Riney.
Stacy Roof, the president and CEO of the Kentucky Restaurant Association, feels that in order to pass the initial stress test of opening a new restaurant, owners need to be consistent and realistic in their business plans.
“I think [new restaurants] have to be realistic about finances, and they need to conservatively be able to operate for probably a year or better without breaking even,” said Roof. “That’s tough for most businesses. Planning is key.”
Swisher believes that recent closings are not a cause for concern. It is merely a reality of a competitive landscape, and moving forward, Lexington’s restaurant culture will only get stronger.
“I think that this is just about Lexington becoming a better restaurant town. I don’t think that it’s about becoming worse, and I hesitate to be negative,” Swisher said. “I think that this is really about our growth from one type of restaurant city to another, and actually I think it’s positive in a lot of ways.”
Seasoned Lexington restaurateurs share their thoughts here.