Does Charleston have a Restaurant Bubble that’s about to Burst?

With the arrival of the much anticipated January restaurant week in Charleston, we can all loosen our belts once again after sticking to our New Year’s resolutions for approximately 3 days. From January 4-22 (it’s a long ‘week’), locals and tourists alike have the opportunity to sample 3 courses from a prix-fixe menu, ranging from $20 at Bubba Gump Shrimp to $49 for dinner at Zero George. Over 65 restaurants in Downtown Charleston are participating, with about 55 others in the surrounding areas.

Charleston of course has been a food darling for YEARS, snatching the Best New Food Town accolade from Portland, OR in 2011,

…thanks to the arrival of Sean Brock’s Husk, and a slew of other James Beard-nominated, nationally lauded restaurants like Hominy Grill, FIG, and McCrady’s.

…according to Thrillist author, Kevin Alexander, in his article Why the Hot New Food Town Must Die

And we’ve been on every top 10 list every year since then with the pace of restaurants opening in this town nearing a mind boggling state.

According to Hannah Raskin, Food Editor of the Post and Courier, approximately 40 restaurants opened in Downtown Charleston in 2016, while only about 20 closed, giving us a gain of about 20 new places to swoon over.  A best guesstimate is that there are about 150 restaurants/bars that serve food on the Peninsula of Charleston alone – so we are at about 43 restaurants per 10,000 people, or one of the highest concentrations in the nation.

And even with all these restaurants Downtown, I am miffed that I STILL cannot get a reasonable hour reservation at FIG unless I book weeks in advance. Sigh…

492-King-St-Charleston-SC

492 King opened in 2015

So why the ominous headline Kristin?

I’m glad you asked. The topic of today’s post was inspired by a prophetic article I read by the aforementioned Kevin of Thrillist, entitled “There’s a Massive Restaurant Industry Bubble, and It’s About to Burst.”, outlining what he sees as a national trend of the end of America’s Golden Age of Restaurants. Naturally, I like to compare Charleston to the rest of the country, since we often live in a protective bubble of our own beauty and success. So is there a restaurant bubble here that’s about to burst? Let’s take a look.

Who is eating in all these places?

Tourists – According to the Charleston Area Convention and Visitors Bureau 2014 Visitor Intercept Report, the Charleston Metro Area receives approximately 5,000,000 visitors annually, 90% of which visit Downtown Charleston. That’s 4,500,000 people coming to our little 6 square mile peninsula, at a rate of about 12,330 per day, and always increasing.

Locals – Our Peninsular population currently stands at about 35,000, and of course the Metro Area is around 700,000.

If you compare tourists to locals ONLY on the Charleston Peninsula, it looks like the tourists account for 1 of 4 people you see on the streets daily. And I’d be so bold as to postulate that tourists are at least 50% of the people you see in the restaurants on average (though at Bubba Gump Shrimp, it’s probably more like EVERYONE)

Everyone moving here from off – The 2016 United Van Lines’ 40th Annual National Movers Study, which tracks customers’ state-to-state migration patterns over the past year, says that South Carolina is the top southern state that people are moving to and is #5 in the nation. This also explains why our population is becoming more diverse and northeastern, since the 3 of the 5 top outbound states are New Jersey, New York, and Connecticut. There is the oft-cited statistic of “35 people move to the Charleston Metro Area every day!”

darling-oyster-bar-charleston-sc

Darling Oyster Bar opened in 2016

So where’s the bubble then?

 

Though our unemployment rate is at 4.4%, we simply do not have enough people to staff the ever expanding food and beverage industry, and the minimum wage and labor costs are going up. Claire Volkman at the City Paper recently did an excellent in-depth article on the staffing crisis in Charleston.  Even an employee at the newly built Beach Club resort in Mount Pleasant, told me that management was apprehensive about the up-coming high season, because they had no idea where to find enough people to actually staff the resorts pools and tiki bar.

Additionally, lack of suitable restaurant space, rising construction prices, and skyrocketing rents in our prime commercial districts (almost DOUBLED in the past 5 years), make a restaurant venture a scary prospect, since let’s face it, restaurants have rarely made people rich.

I believe this influx of tourists and new residents has artificially inflated the restaurant scene and its perceived viability.  This combined with all our food accolades and national exposure have encouraged restauranteurs from all areas of the country to come to Charleston and open The Next Hot Thing. (Not that I don’t love your restaurants!!) And of course successful local proprietors have added to their own repertoires over the past five years as well.

But our current pace of restaurant openings is unsustainable, and frankly, unattainable.  Will our bubble burst in 2017?? I doubt it. We always lag behind the rest of the country anyway. But will the pace slow down by 2018? You bet. I think we’ll lose many of our good ones to rising rents. Many others who want to open a new place, just won’t, choosing to bide their time until we get some crazy influx of people who want to work the line, or serve tourists in excruciating 12 hour shifts with a Time Tracking Software to make sure they work what they are supposed to.

To me the current state of the restaurant industry reeks a bit like the 1999 dot-com boom, or the 2005 real estate ridiculousness. It’s frenzied and frantic with everyones eyes gleaming with dreams of success.  The good news is, hindsight is 20/20, and generally out of those booms and busts, a stronger foundation arises, with far more sustainable practices.  In the meantime, I think I’ll enjoy the immense variety provided to me, and see about booking that coveted reservation at FIG.

tavern-and-table-mount-pleasant-sc

Tavern and Table opened 2014

 

This entry was posted in Charleston Lifestyle and tagged , , . Bookmark the permalink.

One Response to Does Charleston have a Restaurant Bubble that’s about to Burst?

  1. Tom Grubisich says:

    Great article. But if all the new and planned hotel rooms get filled up, you may have to wait even longer for that reservation at FIG.

Leave a Reply

Your email address will not be published. Required fields are marked *

Are you real?? :) * Time limit is exhausted. Please reload the CAPTCHA.