{"id":565,"date":"2009-11-12T16:09:42","date_gmt":"2009-11-12T21:09:42","guid":{"rendered":"http:\/\/blogs.butler.edu\/convergegroup\/?p=565"},"modified":"2011-08-10T13:58:05","modified_gmt":"2011-08-10T18:58:05","slug":"struggling-economy-struggling-restaurants","status":"publish","type":"post","link":"http:\/\/blogs.butler.edu\/convergegroup\/2009\/11\/12\/struggling-economy-struggling-restaurants\/","title":{"rendered":"Struggling Economy, Struggling Restaurants"},"content":{"rendered":"
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photo credit: Ed Yourdon<\/p><\/div>\n

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.<\/p>\n

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.<\/p>\n

Forced to Close<\/h2>\n

Jim Nethercott was owner of Caf\u00e9 Nora and Ruth’s Keystone Caf\u00e9, two restaurants located in the northern part of Indianapolis, two restaurants that closed over the summer.<\/p>\n

\"Jim<\/h6>\n

\u201cThe restaurant business is what I know best,\u201d Nethercott said.<\/p>\n

Despite his knowledge of the industry, both of his restaurants suffered from declining revenue.<\/p>\n

\u201cBy 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.\u201d<\/p>\n

Nethercott attempted to sell his restaurants. He attempted to find a financial partner. After he had exhausted all possibilities, Neth<\/p>\n

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.<\/p>\n

For restaurants that are struggling at the moment, Nethercott offers advice: \u201cInnovate, work smarter not harder, and always be prepared for a downturn.\u201d<\/p>\n

Sales at a Record Low<\/h2>\n

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Although the Indiana Restaurant Association<\/a> 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 caf\u00e9s, along with L’Explorateur and Elements.<\/p>\n

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<\/em><\/a>, 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.<\/p>\n

A Shining Light<\/h2>\n
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Although some restaurants are closing during these troubling times, most are pushing through the struggles, fighting to stay alive.<\/p>\n

Sandy Schimmel is the co-owner of Creation Caf\u00e9<\/a> and Euphoria<\/a>, two restaurants located in Buggs Temple downtown. She has experienced many struggles over the past year with her two restaurants.<\/p>\n

She noticed people eating out less often, choosing cheaper items on the menu, or no longer eating out at all.<\/p>\n

\u201cInstead 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,\u201d Schimmel said.<\/p>\n

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While Creation Caf\u00e9 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.<\/p>\n

\u201cNight time business,\u201d she added, \u201ceasily forty percent of the people came in with coupons.\u201d<\/p>\n

And this method seems to work. According to the National Restaurant Association, 75 percent of customers said they would visit restaurants more often<\/p>\n

if they featured dining discounts on less busy days of the week.<\/p>\n

For her other restaurant, Euphoria, a fine-dining restaurant, Schimmel experienced a greater struggle, as the recession forced people to cut back on \u201cbig ticket items.\u201d<\/p>\n

\u201cWhere 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,\u201d Schimmel said.<\/p>\n

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.<\/p>\n

\u201cThe biggest thing with restaurants is it is not a job, it is a lifestyle,\u201d Schimmel said.<\/p>\n

***<\/p>\n

Participate on a single question survey about restaurants below!<\/strong><\/em><\/h5>\n

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Broadcast Video Version of Print Story<\/h3>\n