Check (this) please: supply v. demand

Fine dining restaurants backed by big bucks have proliferated on the local dining scene. Is it only a matter of time before there’s a lower price-per-entrée correction?

There’s been a spate of new heavy-hitter restaurants, like Jean Georges Vongerichten’s restaurant at the Chambers Hotel, that have opened in the past year in the Twin Cities. Plus, the horizon hosts a whole new slew of restaurants that are scheduled to open over the next year or so, including several yet-to-be-determined restaurants that will open in other boutique and upscale hotels currently being constructed, like the new W in downtown Minneapolis or the new Graves hotel in Uptown. These establishments share some common traits, including backers who’ll help construct a concept for each of the hotels as well as what would seem obvious—the need to be supported by a thriving dining community who want a particular type of experience.

Let’s take the first one, first. One glance through restaurant trade publications—or simply lifting your head and looking around at the scenes unfolding in cities across the nation—reveals that the Twin Cities isn’t alone. In fact, these local arrivals of high-profile, well-financed restaurants are likely mirroring a national trend. Why, just this week Rick Tramonto and Gale Gand, the owners of Chicago’s highly acclaimed Tru, announced that their venture, Cenitare Restaurants, would be joining forces with a small group of real estate partners to form a new group called The Crescendo Cos., which has “coast-to-coast development capabilities,” the aim of which is to open “upscale restaurant concepts” according to Nations Restaurant News. Theirs is a far cry from the only chef-backed restaurant group that’s taking the food world by storm. Starwood Capital (which is backing a hotel and condo project that’s also under construction in downtown Minneapolis) bought B.R. Guest and plans to begin stamping cookie-cutters—oops, I mean developing restaurant concepts—across the United States as well.

There are other big-name restaurant groups that have been notably bought, sold and consolidated in the past year. Now, to be fair, many of these restaurants have top-rated chefs at the helm, real ones who are there night after night and not the absentee namesakes whose names get billed most often. And, furthermore, many of those top-ranked chefs produce star-quality meals. That’s not really what’s the issue is here, at least for me. The issue is that I don’t want my local dining scene to resemble the Strip in Las Vegas. I want there to be a local fabric, a strong community that turns out chefs as rapidly as rabbits turn out more rabbits. Barring that, I’d want the restaurants that are being built locally to be strong independents or at the very least franchisee-owned restaurants that create and keep money in the local economy.

And while we’re on the topic of local economies, let’s get to the second topic: thriving local dining communities. Basic economics would tell us that part of what’s driving the local supply of restaurants is a strong local demand. We’ve lost some notable restaurants over the past few years and, unfortunately, we likely haven’t seen the last of that either, so that logic seems to have a hole or two in it. It’s not just fine dining locales that are impacted. Casual-dining has dipped with the Applebees, T.G.I. Friday’s and Outback Steakhouses of the world left retooling menus, marketing and management in order to get back to the glory days of just a few years ago.

Why don’t we revisit what we see on the horizon? Lots of new restaurants, several notable closings and a fine selection of not-so fancy local restaurants with great food to boot. According to research—and common sense—one of the things that’s a strong correlation to a vibrant dining community is consumers’ willingness, and ability, to part with disposable income. What else are we seeing on the horizon? Could it be as has been intimated—or overtly stated depending on what you listen to and read—a recession? There is after all, a near perfect storm of housing slumps, stock market upheavals and the predictions of Alan Greenspan, a sort of Magic 8 Ball of economics in his own right, that the nation is headed toward a recession. Big, small, short, long—it barely matters. These gathering factors alone could combine to make consumers jittery, and if that happens, does this flurry of fine dining construction become a glut?