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A recession could be a bloodbath for the emerging restaurant scene in Tampa Bay

Larry, from left, Kristen, and Juliette Saylor of Tampa look over the menu at Ava restaurant in Tampa, another new restaurant that helped turn Tampa Bay into a foodie destination.
Larry, from left, Kristen, and Juliette Saylor of Tampa look over the menu at Ava restaurant in Tampa, another new restaurant that helped turn Tampa Bay into a foodie destination.
Published Sep. 16, 2016

After the last recession, it took a while before people in Tampa Bay started splurging again on dining out.

Eventually they did. And as the economy recovered, new restaurants began to sprout all over the area, turning Tampa Bay into an exciting new foodie destination.

But a number of those restaurants might not be here for the long haul.

Some analysts say the next restaurant recession is on the horizon. There are too many restaurants to choose from and communities can't support every new corner cafe and bistro popping up in hot neighborhoods around downtown St. Pete or South Tampa.

That will only get worse if another economic slump or recession arrives. People likely will dine out less and, when they do, they may seek out places where meals are substantially less expensive.

That could mean trouble for local restaurants that may feature locally grown or fresh meals — but also charge more for them.

"It really does look like we're headed toward a recession, but in reality we're headed toward a shake out," said Darren Tristano, president of Technomic, a food research firm in Chicago. "Those that aren't operating efficiently and effectively are going to close."

Longtime restaurateurs know it isn't easy to make it in the hospitality business. Restaurants close every day and others pop up to replace them. But Tampa Bay has experienced something of a local restaurant renaissance over the past few years, said Brian Connors, with Connors Davis Hospitality in Fort Lauderdale.

Millennials favor independent restaurants over chains and tend to focus on more locally grown and sustainable aesthetics, which is contributing to the decline in chain restaurant sales. It has also inspired a flood of new concepts to open in the region, like Tampa Bay's first foray into ramen; hipster restaurants boasting farm-to-table dishes in cool neighborhoods like Seminole Heights in Tampa; or craft beer pairing barbecue joints in historic Kenwood in St. Petersburg.

"People are pouring a lot of money into this segment of food service," Connors said. "It's the jeans and apron-wearing guys with tattoos who can get loans now and don't have to shake down Aunt Sally any longer. Investors are willing to invest in their favorite chefs, which we haven't seen so much of before."

But other parts of the food industry are heating up as well, upping the competition. That includes grocery-delivery services that make cooking at home easier.

Shipt, a smartphone app company, launched a Publix grocery delivery service in Tampa Bay last summer. InstaCart is joining with Publix to test a similar program in Miami. Amazon Prime Now delivers some perishable goods within an hour. And then there's companies like Blue Apron, a weekly or monthly online service that mails fresh ingredients and recipes so you can cook new meals at home.

In addition, a recent report from the Bureau of Labor Statistics shows that grocery store prices have declined 1.6 percent in the past year while spending in "food away from home" category rose by 2.8 percent over the previous year.

"It's always been cheaper to eat at home, but Blue Apron has taken it to another level," Tristano said.

That means if a recession arrives, more people may retreat to these services and ditch dining out, experts say.

But there are some segments of the restaurant industry that are chugging along faster than others — and that seem more likely to survive a recession because they are more affordable.

Fast causal restaurants, which isn't fast food like McDonald's but is quicker than a casual sit-down restaurant like Chili's, are growing at a rate of 7 percent each year, or basically faster than anyone else, Tristano said.

Bradenton-based First Watch, which offers breakfast, lunch and brunch, opened or converted 50 locations this year, and plans to open up to 20 more before the year ends, said Chris Tomasso, the company president. The chain has just under 300 restaurants across the country.

However, First Watch has seen a slowdown in sales over the past two months and Tomasso said he has heard a lot of chatter in the industry about a potential recession.

"We're not sure how much of that is based on consumer confidence because of the economy or the upcoming election," he said. "But for the most part, we've done well during down times because we're at a reasonable price point and not an extravagance. People can go out for breakfast and not break the bank."

PDQ, a fried chicken tender restaurant chain owned by one of the Outback Steakhouse founders, Bob Basham and partner Nick Reader, will open 15 to 20 restaurants by next year, expanding their reach from eight states to 11 with more than 55 locations.

"There are only so many dollars out there and that puts a lot of pressure on us," said Reader, the CEO of PDQ. The company is celebrating its fifth anniversary this year. "We're a little more recession-proof in this category because people may trade down to fast casual because of the price point when times are bad, but if times are good, people are still in a hurry and want something affordable."

Not everyone will be so lucky.

"The reality is there are more places to eat and that's watering down the traffic for everyone," Tristano said.

Contact Justine Griffin at or (727) 893-8467. Follow @SunBizGriffin.