Food For Thought

By:style='mso-tab-count:2'> David Stevens

Until about a decade ago, visitors

to Collier County were given a limited number of dining choices. One could

choose a locally owned establishment or a quick meal at a local fast food

restaurant. Very few national chains gave Southwest Florida, particularly

Bonita Springs and Naples, a second glance because the market simply didn’t

have the year-round demand to allow a restaurant to sustain itself. The

seasonality of the area discouraged restauranteurs from this section of the

state.

In the last few

years, local residential growth has brought the population to a level that attracts

the national chains. Olive Garden, Red Lobster and Ruby Tuesdays pioneered the

area, followed by other well-known concepts like TGI Friday’s, Outback

Steakhouse and Carraba’s Italian Grill.

Restaurant growth

in our area today can be categorized as follows:

normal'>Influx of New National Chains

National chains not yet in Southwest

Florida continue to hear about the area’s favorable growth, either from

demographic reports or by tracking competitors’ sales. If their analyses meet

the chain’s criteria, these chains begin the process of seeking a site. Recent

market entrants include Charley’s Crab, IHOP and Friendly’s. Other national

notables considering the area at this time include Ruth’s Chris, Houston’s and

Morton’s.

normal'>Growth of Existing National Chains

Another category is chain

restaurants that already have a local presence and want to expand. These chains

have the advantage of already understanding the market, its labor base and

seasonality. Examples of this category are: Longhorn and Hops, who recently added

units in Naples; Outback, which is in the process of adding two or three units

in the area; and others like Perkin’s, Denny’s, First Watch, Applebee’s,

Macaroni Grill, McDonald’s, Taco Bell, Wendy’s and Burger King.

First Watch, a

popular chain of breakfast/lunch restaurants that started in California,

presents an interesting growth scenario in southwest Florida. With only 36

units located in six states, it doesn’t have the mass-market presence of a

multiple location chain such as McDonald’s or TGI Friday’s. Careful

consideration of location is crucial for survival. Their Naples location, which

has been open for 12 years, is the busiest in the entire chain. Four years ago the

chain opened its first Fort Myers unit and now has plans to open an additional

Fort Myers unit by September and another location in Naples in the near future.

normal'>Local Growth Within the Market

Local restaurant operators who want

to expand their businesses within the market make up the third category in

restaurant growth. These businesses have established a strong local following

and have created a favorable reputation. They have assessed the preferences of

local diners and have catered to them. For instance, although some restaurants

have developed a more cosmopolitan appeal, many have capitalized on the Florida

casual approach to fine dining. They strive to make the dining experience

comfortable, yet offer imaginative menus and quality presentations to attract

and maintain their upscale clientele.

Local restaurateur

Michael Hernandez, founder of Michael’s, Zoe’s, Bistro 821 and Bistro 41, plans

to soon open Aqua Grille, a new seafood concept in north Naples. Skip Quinlan,

known for Pazzo and Chops, recently opened Yabba’s on 5^th Avenue

South in Naples. Another successful local growth story is the Sanibel Steak

House, owned by the Sanibel Restaurant Group. A location was recently opened in

Fort Myers, with two others planned in Bonita Springs and Naples by the end of

2000.

normal'>Challenges of Growth

When experiencing such rapid

growth, some growing pains are inevitable. With a national unemployment rate of

4.2 percent and an even lower 2.6 percent in Lee County and 3.8 percent in

Collier County, the restaurant industry is certain to feel the effects. For

every three people who move into the area, only one will enter the workforce.

If this continues, growth may be held in check. Some national chains may be

wary to open a unit if they are not able to staff it appropriately.

In fact, one

national restaurant that recently opened in Bonita Springs was forced to rope

off a dining section because it simply did not have adequate staff to service

the area. It is becoming increasingly difficult to recruit and hire from the

existing labor pool.

Additionally,

there is competition within the service sector. Restaurants, hotels and retail

centers are competing for the same pool of human resources. Restaurant owners

who use creative hiring practices or offer attractive pay and benefit packages

will be the most successful in maintaining and growing their operations. An

example of innovative recruiting practices may include hiring seniors as wait staff.

This type of thinking will allow restaurants to operate at their full capacity

and keep their profits at an acceptable level.

normal'>The Upward Trend Continues

With the area’s population growth,

particularly in the “dines-out-frequently” segment, continued restaurant growth

is inevitable. Residents in Naples and Bonita Springs will have more choices as

well as more locations of existing concepts.

Bon appétit.

normal'>David Stevens, CCIM is a principal with Grubb & Ellis|IPC, a

full-service commercial real estate company serving Southwest Florida.