Struggling Economy, Struggling Restaurants
photo credit: Ed Yourdon
Over the past year, Americans have witnessed a recession that has led to an increase in unemployment and a decrease in consumer spending. As a result, many Indianapolis retailers, including restaurants, have gone out of business.
Restaurants, which represent 10 percent of Indiana’s total employment, have been hit hard. Some restaurants have continued to march forward, despite constant struggles; others have been defeated, forced to close.
Forced to Close
Jim Nethercott was owner of Café Nora and Ruth’s Keystone Café, two restaurants located in the northern part of Indianapolis, two restaurants that closed over the summer.
“The restaurant business is what I know best,” Nethercott said.
Despite his knowledge of the industry, both of his restaurants suffered from declining revenue.
“By the middle of 2009, both restaurants were down 25 to 30 percent from 2007. The decline in sales began in March 2008 and continued on through the summer of 2009.”
Nethercott attempted to sell his restaurants. He attempted to find a financial partner. After he had exhausted all possibilities, Neth
ercott was forced to close both of his establishments in July. While he is currently working for a food management company out of St. Louis, Mo., Nethercott hopes to get back into the restaurant business in the future. His former restaurant, Ruth’s Keystone Cafe, re-opened under new management in October.
For restaurants that are struggling at the moment, Nethercott offers advice: “Innovate, work smarter not harder, and always be prepared for a downturn.”
Sales at a Record Low
Although the Indiana Restaurant Association does not track the number of local restaurants that have closed, it does track the restaurant performance index. The index, which is released monthly on the Indiana Restaurant Association’s website, states that in December of 2008, restaurant sales were at a record low. As a result of the apparent struggling times, at least four independently-owned eateries were forced to shut down: the two previously mentioned cafés, along with L’Explorateur and Elements.
L’Explorateur, which was located in Broad Ripple, was owned and operated by acclaimed chef Neal Brown and shut down in January; Elements, which was located downtown, was owned by another acclaimed chef, Greg Hardesty, and it closed in April. Both restaurants were classified as fine dining and, as a result of the economy hurting eateries, especially upscale places, the two dining locations were forced to close. Fortunately, according to an article in the Indianapolis Star, Brown is working on opening up a gourmet pizza restaurant located in the Carmel, titled Pizzology; Hardesty, on the other hand, is preparing to open a more casual restaurant, tentatively titled Recess, located in Broad Ripple.
A Shining Light
Although some restaurants are closing during these troubling times, most are pushing through the struggles, fighting to stay alive.
Sandy Schimmel is the co-owner of Creation Café and Euphoria, two restaurants located in Buggs Temple downtown. She has experienced many struggles over the past year with her two restaurants.
She noticed people eating out less often, choosing cheaper items on the menu, or no longer eating out at all.
“Instead of four times a week, they come two times a week. Instead of the steak sandwich, they’re having soup and half a sandwich. It was very, very scary,” Schimmel said.
While Creation Café struggled, it was able to stay in business because of the reasonable prices on the menu, the regular lunchtime customers, and the dinner coupons, Schimmel said.
“Night time business,” she added, “easily forty percent of the people came in with coupons.”
And this method seems to work. According to the National Restaurant Association, 75 percent of customers said they would visit restaurants more often
if they featured dining discounts on less busy days of the week.
For her other restaurant, Euphoria, a fine-dining restaurant, Schimmel experienced a greater struggle, as the recession forced people to cut back on “big ticket items.”
“Where people might go out for a special meal, just to have a good meal, [now] they’re only going out for birthdays, anniversaries, work-related things,” Schimmel said.
In order to maintain success with both of her restaurants, Schimmel began working harder. Her restaurants continued with coupons and featured items, as well as appearing at benefits, sponsoring charity events, and providing catering services.
“The biggest thing with restaurants is it is not a job, it is a lifestyle,” Schimmel said.
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Broadcast Video Version of Print Story
My Convergence Journalism Video
Helpful Charts
Here is an Excel spreadsheet of 2008’s monthly revenue, separated by Indiana’s counties. As mentioned in both the print story and the broadcast video, restaurant sales were at a record low entering in December.
| January | February | March | April | May | June | July | August | September | October | November | December | Year to date | ||
| Allen | $549,488.00 | $414,339.00 | $463,029.00 | $334,529.00 | $486,544.00 | $520,746.00 | $421,487.00 | $468,347.00 | $450,499.00 | $551,894.00 | $388,911.00 | $411,843.00 | $5,461,656.00 | |
| Brown | $7,743.00 | $6,358.00 | $6,855.00 | $5,701.00 | $8,781.00 | $13,199.00 | $14,638.00 | $10,055.00 | $14,198.00 | $13,772.00 | $15,668.00 | $15,276.00 | $132,244.00 | |
| Brownsburg | $40,375.00 | $28,033.00 | $32,478.00 | $27,867.00 | $30,901.00 | $38,847.00 | $38,418.00 | $31,808.00 | $36,968.00 | $46,396.00 | $31,163.00 | $34,750.00 | $418,004.00 | |
| Delaware | $183,824.00 | $126,637.00 | $153,120.00 | $160,055.00 | $134,125.00 | $161,579.00 | $160,517.00 | $129,604.00 | $105,156.00 | $176,705.00 | $92,783.00 | $145,596.00 | $1,729,701.00 | |
| Henry | $44,832.00 | $34,309.00 | $34,936.00 | $25,789.00 | $44,840.00 | $40,865.00 | $41,002.00 | $39,084.00 | $35,233.00 | $51,082.00 | $24,405.00 | $40,582.00 | $456,959.00 | |
| Lagrange | $9,493.00 | $3,216.00 | $5,159.00 | $4,972.00 | $4,585.00 | $8,310.00 | $11,457.00 | $13,380.00 | $15,050.00 | $8,134.00 | $9,986.00 | $10,149.00 | $103,891.00 | |
| Madison | $159,709.00 | $117,640.00 | $117,824.00 | $129,401.00 | $127,029.00 | $138,820.00 | $185,088.00 | $128,863.00 | $124,522.00 | $186,196.00 | $94,251.00 | $134,962.00 | $1,644,305.00 | |
| Marion | $3,456,925.00 | $2,741,791.00 | $2,990,752.00 | $2,672,198.00 | $2,967,567.00 | $3,170,562.00 | $3,532,758.00 | $2,751,157.00 | $2,936,622.00 | $3,863,763.00 | $1,992,322.00 | $3,253,658.00 | $36,330,075.00 | |
| Morgan | $63,880.00 | $17,266.00 | $31,275.00 | $23,521.00 | $31,544.00 | $29,631.00 | $33,129.00 | $26,073.00 | $26,357.00 | $30,068.00 | $20,228.00 | $21,608.00 | $354,580.00 | |
| Plainfield | $73,618.00 | $55,873.00 | $62,573.00 | $69,251.00 | $70,350.00 | $72,594.00 | $94,003.00 | $71,323.00 | $51,935.00 | $89,882.00 | $38,904.00 | $76,010.00 | $826,316.00 | |
| Vanderburgh | $403,586.00 | $317,835.00 | $295,517.00 | $256,898.00 | $333,539.00 | $330,794.00 | $330,549.00 | $264,833.00 | $277,388.00 | $372,852.00 | $198,024.00 | $326,764.00 | $3,708,579.00 | |
| Hamilton | $397,050.00 | $288,407.00 | $304,245.00 | $274,082.00 | $310,248.00 | $392,348.00 | $398,533.00 | $307,374.00 | $320,876.00 | $423,903.00 | $183,616.00 | $341,825.00 | $2,952,805.00 | |
| Hendricks | $219,453.00 | $167,000.00 | $178,943.00 | $180,454.00 | $185,874.00 | $207,154.00 | $214,328.00 | $188,596.00 | $184,215.00 | $234,403.00 | $147,997.00 | $202,073.00 | $1,745,094.00 | |
| Avon | $86,134.00 | $57,383.00 | $62,434.00 | $46,392.00 | $52,133.00 | $73,284.00 | $67,873.00 | $58,506.00 | $65,472.00 | $66,643.00 | $45,450.00 | $64,640.00 | $540,393.00 | |
| Martinsville | $28,929.00 | $22,441.00 | $24,316.00 | $21,554.00 | $23,519.00 | $23,758.00 | $27,994.00 | $23,887.00 | $21,956.00 | $32,552.00 | $15,038.00 | $29,349.00 | $219,607.00 | |
| Carmel | $148,811.00 | $86,108.00 | $118,580.00 | $87,636.00 | $117,537.00 | $120,234.00 | $132,994.00 | $96,198.00 | $111,668.00 | $144,453.00 | $77,244.00 | $104,189.00 | $1,345,652.00 | |
| Noblesville | $79,909.00 | $54,558.00 | $51,182.00 | $56,466.00 | $66,622.00 | $116,620.00 | $91,788.00 | $70,890.00 | $69,844.00 | $101,956.00 | $59,480.00 | $88,225.00 | $907,540.00 | |
| Shelby | $41,818.00 | $29,538.00 | $34,297.00 | $33,000.00 | $32,515.00 | $55,373.00 | $38,168.00 | $48,004.00 | $43,826.00 | $52,700.00 | $21,372.00 | $55,355.00 | $485,966.00 | |
| Hancock | $58,557.00 | $48,336.00 | $54,612.00 | $54,085.00 | $43,867.00 | $67,887.00 | $62,387.00 | $59,901.00 | $55,164.00 | $79,748.00 | $37,520.00 | $61,591.00 | $683,655.00 | |
| Boone | $104,057.00 | $40,963.00 | $72,251.00 | $33,738.00 | $42,102.00 | $53,193.00 | $31,905.00 | $39,826.00 | $39,332.00 | $64,019.00 | $59,465.00 | $40,221.00 | $621,072.00 | |
| Westfield | -$79,794.00 | $30,854.00 | $36,310.00 | $26,167.00 | $32,703.00 | $46,061.00 | $28,362.00 | $31,641.00 | $32,392.00 | $40,318.00 | $25,577.00 | $44,031.00 | $294,622.00 | |
| Lebanon | $32,641.00 | $19,738.00 | $22,955.00 | $17,374.00 | $21,494.00 | $33,291.00 | $32,303.00 | $20,154.00 | $28,410.00 | $37,144.00 | $25,851.00 | $26,116.00 | $317,471.00 | |
| Zionsville | $15,102.00 | $15,809.00 | $18,580.00 | $10,578.00 | $11,554.00 | $14,339.00 | $18,739.00 | $13,350.00 | $16,731.00 | $12,356.00 | $10,490.00 | $14,319.00 | $171,947.00 | |
| $61,452,134.00 | ||||||||||||||
| $6,126,140.00 | $4,724,432.00 | $5,172,223.00 | $4,551,708.00 | $5,179,973.00 | $5,729,489.00 | $6,008,420.00 | $4,892,854.00 | $5,063,814.00 | $6,680,939.00 | $3,615,745.00 | $5,543,132.00 | |||
Useful Links
“Here is the link to the monthly restaurant performance index, as described in the story.”
“Here is the link to 2009’s Monthly Net Collections Report, as mentioned in the article.”
2009 Monthly Net Collections Report
www.indycanal.com (website for Creation Cafe and Euphoria, two Indianapolis restaurants owned by Sandy Schimmel)
www.pizzologyindy.com (website for Neal Brown’s new restaurant, Pizzology)
“Read these additional articles about chef Greg Hardesty, and the progress of Recess, his new restaurant.”
Chef Greg Hardesty Information
Almost Time For Recess (An article about the progress of Hardesty’s new restaurant, Recess)
“Read Nuvo’s 2009 Dining Guide, a guide to all of the favorite restaurants in Indianapolis, a guide that I helped create and organize.”
“Visit this website for additional information on dining events and happenings throughout Indy.”
Further Articles to Discover:
Indianapolis Restaurants and the Economy: Fighting Like the Pioneers
Local Chefs Whip Up Renovations, New Restaurants (Indianapolis Star article)
http://www.indystar.com/foodanddrink (Indianapolis Star food and drink section)
Interactive Links
“Interact with Brown through his Twitter, discover updates and information about his new restaurant Pizzology!”
“Read updates and interact with Creation Café and Euphoria by following them on Twitter!”
Directions
Map/Directions for Creation Cafe/Euphoria
Map/Directions for Ruth’s Keystone Cafe
Photo Credits
Image of Jim Nethercott: (http://api.ning.com/files/a7M1QEy39os*V5vGBORVT*yETYsbLgsyeRpVqeotfc31I64JOmT9m6GszS5cXx3476mCQQMk44S8RCloHt5v3MFYk85Nbwpn/JimPhoto.jpg)
Image of Creation Cafe/Eurphoria: (http://i155.photobucket.com/albums/s289/corrnd/Buggs%20Temple/04-06-09/640px/2009-04BuggsTempleSign001-1.jpg)
