Sarasota-Area Eateries Vanishing In Slow Economy

The good days are over for the Rustic Grill, an upscale Zagat-rated restaurant that garnered accolades from across Southwest Florida.

The Sarasota restaurant has been transformed into a Depression-era attraction -- right down to the circa-1930 bar.

Goodbye Rustic Grill. Hello Red Buddha Lounge -- set to open Saturday.

Owner Al Tomlinson simply could not keep up with rising food and gas prices and the dwindling number of people willing to spend money on a high-priced meal. Tomlinson is far from alone. This summer is shaping up to be a season that redefines the region's restaurant market.

National restaurants that have been closing their sites may be harbingers of what is to come for locals, who tend to hold on longer because they are more passionate about their businesses. If the trend continues, years of steady growth in the local restaurant industry might be about to stall.

Village Inn, Atlanta Bread Co. and Boston's Restaurant and Sports Bar all closed their doors in recent weeks, on the heels of other national chains such as Lone Star Steak House and Steak & Ale that closed their local operations.

The National Restaurant Association's most recent monthly restaurant performance index, released the last week of June, shows restaurant operators' outlook for sales and for the economy are at the lowest level in the survey's six-year history.

Changing To Survive

Even as more restaurants are expected to close this summer, locals are looking for ways to stay in business.

Chef Paul Mattison has decided to make his Longboat Key steakhouse a seasonal restaurant, closing it this summer for the first time. Mattison does not plan to reopen until the end of October.

Lee Zabel, general manager of Sarasota Restaurant Equipment, said such moves harken back more than a decade to when Sarasota was more seasonal.

"You always had restaurants that came in and at the end of season would close," Zabel said. "But this is no longer a seasonal destination."

The problem is that the locals are holding on to their money and cutting back on dining out as they wait for the economy to improve, Zabel said.

To survive, restaurants need to take a hard look at what they are going to do, says H.G. Parsa, editor of the Journal of Foodservice Business Research and chairman of the Foodservice and Lodging Management Department at the University of Central Florida.

"Food prices are up, and the economy is down. High-end restaurants are getting squeezed by two economic forces," Parsa said.

Wholesale food prices jumped 7.6 percent in 2007, and, on a year-to-date basis through March, prices have risen 8.5 percent in 2008, according to the U.S. Bureau of Labor Statistics. The most dramatic price increases have been for flour, up 87 percent; eggs, up 73 percent; and fats and oils, up 49 percent.

The economy has not been this bad since the late 1970s, Parsa said. The high-end restaurants are likely to be the hardest hit, whereas quick-service or fast-food players might be the beneficiaries.

Restaurants that plan their menus, highlight their most profitable items and add more vegetable and pasta dishes will be more likely to survive. Restaurateurs also need to make sure they take care of their staffs and do some serious team-building, he said.

If owners need to skimp on something, it should be on linens for the table and landscaping.

Some restaurateurs, including Bruce Dawson at the Island Time Grill, are switching to summer menus that offer lighter fare and smaller portions. Others are offering more appetizers and drink specials to get people in.

Something Drastic

The Rustic Grill is making perhaps the most drastic change, one that speaks to the owner's feeling about the economy.

Tomlinson is leaving the upscale restaurant behind in favor of "eatertainment" -- small plates and drinks combined with nightly entertainment designed to help people escape their worries about the economy.

Tomlinson, who also is an antiques dealer, is even installing a bar said to have been built for Al Capone during the speakeasy days of The Great Depression. The bar came from St. Petersburg, where Capone is rumored to have owned a home.

Tomlinson's goal is to make every night an event -- the kind of event that will attract diners.

"I've been here seven years, and this is the scariest summer yet," said Amelia Foxwell, the Rustic Grill's manager. "I've talked to a lot of people out there, and they're all scared."

At the same time, it is exciting that the economy is forcing the business to try something new, Foxwell said.

Tomlinson does not seem quite as excited.

He is making the change because the Rustic Grill would not have made it through the summer.

"The seafood bills for this place will choke you," he said. "Everything is up by at least a third. I pay more for olive oil than some places pay for steak."

Last month alone, his olive oil bill hit $1,800.

Food costs aren't the only ones going up. Petroleum-based supplies such as take-home containers, plastic utensils and packaging all cost more, in keeping with the spiraling price of oil. For the same reasons, people delivering goods have added fees to compensate for the skyrocketing cost of gas.

At one time it was easy to survive the costs, but that was back when real estate agents, developers and contractors regularly went out for a high-end meal. Now Tomlinson's restaurant has become a place for rare special occasions.

"We're the easiest thing to cut," Tomlinson said. "You can't eliminate putting gas in the car or taking your kid to the dentist. You can eliminate luxury."

A Taste For Savings

Teachers eating lunch at the Oasis Café last week said eliminating luxury is exactly what they have done.

Rather than going out for celebrations, Laura DeUnger goes to the store, buys steak and does the cooking herself, the teacher said.

On the rare occasion when she goes out to eat, fellow educator Valerie Donahue looks for coupons. Caroline Stephenson said she and her friends now go to lunch rather than dinner. Stephenson also has switched to water with her meals out.

Donahue said that when she goes out to dinner, she looks for restaurants that do not charge extra for splitting a meal.

Local restaurateurs said they have seen all the money-saving tricks at their restaurants and that while they are happy to get the customers, it means they are not making as much even when they get diners.

Max Lazzari, who closed Maximo's Restaurant and Wine Bar in June, said that it was a combination of high costs and customer cutbacks that led him to sell the Siesta Key property that housed his restaurant.

"It's almost a little bit of a bloodbath out there," said Lazzari, who has been in the restaurant business since before graduating from Sarasota High School. "I sold the property, but I'm not sure I would have been able to sell the restaurant."

Along with Maximo's, other local restaurants have closed: El Habanero, the popular Cuban restaurant in Burns Square, shuttered in May; Mel's Diners closed all of its local diners; and R.J. Gators closed its Sarasota and Bradenton restaurants this year.

Like others in the business, Lazzari has heard rumors that dozens of restaurants will close this summer, so he is going to wait out the summer before he decides on his next move.

Lazzari, who once owned Giorgios, wants to open another restaurant -- probably one on the mainland that's not so dependent on the tourist market.

He is not alone. Last year, more than 200 restaurants changed hands in the market from Charlotte County north to Manatee County, state licensing records show.

The three-county region now boasts more than 2,000 establishments.

Among those is the Dream Café, a new Polish and European restaurant that opened in June. A couple who owned restaurants in Warsaw and Krakow emigrated here and decided to open in the defunct Bay Leaf Restaurant.

Bacco's Ristorante Italiano in downtown Sarasota was only closed a few weeks when a French couple signed a lease to open a French-themed restaurant there.

Lazzari said that things look grim for the summer, but he has not lost faith in the region's ability to support good restaurants.

"I'm only 36. I have to work for a living," Lazzari said. "I'm checking it out, waiting to see what happens. I will reopen eventually."

Some of the area's closed restaurants:

Sarasota County

•Atlanta Bread Co.
•Boston's Gourmet Pizza and Sports Bar
•Bacco's Italian Ristorante
•Village Inn
•Maximo's
•Fred's Restaurant
•El Habanero
•Mel's Diner
•R.J. Gator's
•Teddie's
•Jolly
•Metro Café
•Last Great American Burger
•Durango Steakhouse
•Sarasota Scoops
•Lone Star Steakhouse & Saloon
•Don Pablo's
•Steak & Ale
•California Bistro Grill

Manatee County

•Mel's Diner
•R.J. Gator's
•Lone Star
•Johnny Carino's