City records show the number of food establishments in Plano grew by 8 percent in 2017 alone—a year that saw the openings of restaurant-heavy developments including Legacy West, Legacy Hall and the Boardwalk at Granite Park.
Despite new competitors opening their doors across the city, the restaurant market has so far been relatively stable. The rate of food establishment closures, relocations or ownership changes has hovered at or near the same level each year since 2013—but that does not mean businesses owners are not feeling a pinch.
“My beer vendors are raising their prices, commodities are going up, rent is going up, insurance is slowly going up,” said Sean Cahill, owner of Buffalo Bluez in Plano. “We are seeing a price increase on all fronts and we are not necessarily seeing that [foot-traffic] volume increase that we kind of expected.”
Some local restaurant owners say they are seeing their rents increase as restaurant concepts move into the burgeoning northwest Plano mixed-use centers.
As those mixed-use centers continue to add high-end retail stores and restaurants into 2018, some local restaurant owners are left with two options: adapt or fizzle out.
“The Plano area itself … does have its own challenges, and those are definitely going to force a lot of these restaurateurs to reinvent themselves,” said Andy Rittler, the executive director of the Greater Dallas Restaurant Association.
A stable market—so far
Legacy West and portions of the Boardwalk at Granite Park all opened in 2017, adding to the growing Plano restaurant scene high-profile tenants such as North Italia, Hookline and the three-story Legacy Hall.
And that number is on an upward trend; according to city records, the total number of Plano food establishments in 2017 saw a 22 percent increase when compared to 2013, with northwest Plano contributing to that total.
“There’s a tremendous saturation of restaurants within [northwest Plano],” Rittler said. “Normally I don’t see that there’s a restaurant bubble. In this case, it seems that there are a lot of restaurants that are opening up in a short amount of time, and it presents a lot of challenges for those that are already existing.”
Despite the growing number of restaurants opening in Plano, the overall number of food establishments that have closed, been sold off or relocated has hovered between 12 and 13 percent of all food establishments since 2013.
While food establishment closures, relocations and changes in ownership appear to have remained mostly in line with the Plano market’s growth over the last five years, some restaurants, even within the premier dining destinations of the city, are beginning to feel a financial squeeze.
Rent and location
As potential tenants continue to vie for storefronts in the newer mixed-use developments, landlords are seizing the opportunity to up their rent prices, Rittler said.
“Rent is really an issue right now,” Rittler said. “A lot of these developers are squeezing rent out of restaurateurs and increasing those rents, and it’s making it an unattainable situation for them.”
Cahill said that his current location near the intersection of Coit Road and Legacy Drive does not have the
same appeal of the mixed-use developments needed to bring that level of foot traffic through his doorway.
“These centers that are opening up are A-plus, prime locations,” Cahill said.
Meanwhile, Tanner Fleming, an operating partner at Union Bear at the Boardwalk at Granite Park, attributes some of Union Bear’s initial success to the foot traffic from the large corporations housed in the multistory offices of Granite Park.
“With the Granite Park businesses all around, and the Hilton and the things that they book, it’s been a great ride so far and it’s been less than two months,” Fleming said.
And as global corporations like Toyota, JPMorgan Chase & Co. and Liberty Mutual continue shipping in more employees, developers are rethinking what types of businesses should anchor their destinations.
A changing landscape
Although retail-centric developments used to be one of the main attractions for customers, Rittler said developers have shifted their focus to providing more attractive dining options.
“A lot of the developers in the area are looking at having restaurants as the anchor,” Rittler said. “It used to be retail was the anchor and the restaurant was the add-on, but now it’s flipped.”
The Boardwalk, which caters to its visitors with a variety of dining options, has become a destination, Fleming said.
“It’s all about the community and being a destination,” Fleming said. “You’ll see people eat in one place and have after-dinner cocktails in another place right down the boardwalk.”
And the draw of these mixed-use developments may be strong enough to draw traffic away from other restaurants. Cahill said he believes he has been losing some of the customers living within the immediate vicinity of Buffalo Bluez.
“These multiuse centers are starting to capture my bedroom community,” Cahill said. “All my people are starting to go [to the mixed-use centers], and all of the people that are already there are not leaving there.”
‘Fighting for the dollar’
To run a successful restaurant in Plano, it is not a matter of just keeping your doors open, Fleming said.
“There are some old Plano institution-type areas that are seeing a pinch,” Fleming said. “The more restaurants come in, the more just opening the doors doesn’t cut it. We have to progress, we have to get better. You’re fighting now for the dollar.”
In anticipation of that pinch, Cahill says he has upped his efforts in marketing and advertising—something he says has allowed him to keep afloat for the past five years, which he considers a success.
“I’ve spent more money on advertising and done more social media … than I ever have, and I actually maintained the same market share that I had year-over-year,” Cahill said. “So, 2016-17 we didn’t grow at all. We just maintained, and I consider that to be a win … for me because we didn’t slip.”
As developments like the Boardwalk and Legacy West continue adding new restaurants to their growing tenant base, even some of the more high-profile businesses in northwest Plano have closed in recent months. Since the beginning of 2018, restaurants like Gordon Biersch and Cafe Express shuttered their locations at the Shops at Legacy.
“Some folks are going to shake out—some folks aren’t going to make it—that’s just the nature of the business,” Rittler said. “The ones that will do well are those that really understand what it means to be a good operator. Unfortunately, some of those that are good operators will even fall victim to that, too.”
