Dennis Chui has a long history in the Connecticut restaurant business, owning and operating five Chinese restaurants over the past 20-plus years.
So why would Chui, currently owner of The Green Tea Restaurant in Farmington, expand into the burger business? And why now, in one of the toughest economic downturns the country has seen in decades?
Chui, 46, admits the decision to open Burger N’ Beyond is a risk, although one he estimates to be small. With low overhead, no wait-staff and his wife as the chef, Chui believes there’s little chance that he won’t make money, even as families and individuals cut back on eating out and spend less when they do.
“I tried to do a recession-proof business,” said Chui, noting the new restaurant is only 600 square feet and designed for take-out. “People are still going to go out to eat, but they will spend less, so I decided to make this home-made fast food, lower priced with quality.”
There was also recently some positive news for restaurant owners. After suffering from cost inflation nearly all of last year, relief from sky-high commodity prices are expected in 2009, according to the Nation’s Restaurant News, an online magazine for restaurant owners.
In an article published on the website, the NRN said the prices of seafood, produce and wheat are expected to be lower this year than last, and milk and cheese prices down as much as 40 percent. Lower energy inflation should also help restaurants with reduced energy, packaging and distribution costs, the web site said.
And yet, there’s no denying that many consumers are eating out less, and spending less when they do go out. U.S. Restaurants are enduring their toughest time in 17 years, according to an economist from the National Restaurant Association.
“This is the most challenging environment for restaurant operators since 1991,” Hudson Riehle, the chief economist for the association, told Reuters. He said depending on how consumer spending proceeds, “It could be the most challenging environment since the early 1980s.”
Nationwide, restaurant industry sales are expected to reach $566 billion in 2009, according to the association’s 2009 Restaurant Industry Forecast. The Forecast projects that while overall restaurant industry sales will increase in current dollars by 2.5 percent over 2008, the numbers translate to an inflation-adjusted decline of 1.0 percent.
Richard Rosenthal, chairman of board of the Connecticut Restaurant Association, said local owners are looking for new ways to bring in business, including offering price-fixed menus, frequent diner cards and special events like wine tasting or gluten-free meals.
“Restaurants in general are coming up with creative ways to bring people in,” said Rosenthal, who is also president of the Max Restaurant Group. “Instead of waiting for people to come in, we are spending a lot of time thinking, planning and enticing people to come in.”
Rosenthal is opening his own burger restaurant in West Hartford Center, a venture he planned before the recession hit. He said overall at his existing restaurants, business is down about 10 percent compared to one year ago.
“It used to be, whenever things were a little soft, restaurants would act like it wasn’t soft and say things are fine,” Rosenthal said. “This recession is so much different. You’d be insulting people to say things are not slower..”
Chui said he first noticed the economic slowdown in early 2007, when his once steady business at The Green Tea restaurant began to falter.
“Small businesses feel it first, not matter if it is good or bad we feel it first,” he said.
He is leasing the space at 979 Farmington Ave. in Farmington for Burger N’ Beyond, but invested about $100,000 for a total gut rehab of the space, using savings and existing lines of credit from his Chinese restaurant. Chui says he is not worried about the timing of his opening.
“I expect that this is the bottom or near the bottom, that’s for sure,” he said. “Even if it is not the worse, it’s close to the worse and things will only get better. If I can survive this climate, I can flourish.”
