Offering catering and mobile units are among the approaches some local businesses are taking, while others focus on the diner’s experience.
Chris Florczak, the owner of Rise Souffle in Creekside Park, said the costs of ingredients, energy and restaurant supplies have all risen since he opened The Woodlands location in 2023.
“There is no question with each passing year ... it’s getting harder and harder to operate, particularly in these last three years,” he said, noting his focus is on quality and service. “We’re playing the long game.”
The overview
HeBrews Coffeehouse owner Marsha Wood said business was brisk at its Oak Ridge Drive location, but she closed the location this summer after a dispute regarding the lease. Before closing, she said the business saw the pressure of rising prices.
“Even though we were growing outwardly, ... we saw the cost of everything go up,” she said.
She said she has some mobile events booked into the fall, and the coffee shop’s former location in Magnolia was taken over by a former manager as Sycamore Coffee in July.
Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, said he believes the restaurant industry may continue to struggle with many of the same issues because prices for goods are unlikely to come down.
The rate of year-over-year inflation was at 2.9% as of the most recent information available in July—well below its peak of 9% in 2022—but menu prices had grown year over year 4.1% compared to the grocery rate of 1.1%, Jankowski said.
“When people’s budgets are tight, they look for ways to scale back,” he said. “Meaning they are likely to spend less or visit less."
The conditions
Ashley Reina, who owns the home-based bookkeeping business Blue Skies Bookkeeping in The Woodlands area, said many of her clients have struggled with inflation in the past year, and two of her former restaurant clients in the Rayford Road and Sawdust Road corridor have closed amid economic pressures.
“It’s just insane how much [food costs] have gone up,” Reina said. “You are trying to tread water [with prices], saying, ‘How much can I raise it without losing [customers]?”
Price increases on items such as eggs and meat have consistently trended upward since 2020, according to data from the U.S. Bureau of Labor Statistics. However, inflation also affects less well-known ingredients that are essential for many restaurants.
Orasinee Ratanaarporn, who owns ZapVor by Thai Spice on Sawdust Road, said Thai cuisine requires specialty ingredients that cannot take substitutes, and inflation means there is no flexibility on some items such as galangal, a flavorful root in Thai cooking.
“My hands are tied; I have to buy it,” she said.
“When people’s budgets are tight, they look for ways to scale back, and they may cut back on one less meal eating out," said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership.
“When you go out to eat, you have to be thinking ... how much is it going to cost me?” said Orasinee Ratanaarporn, owner of ZapVor by Thai Spice.
Some context
Retaining staff has also been an increasing challenge, several business owners said.
Beth Ferester operated Lovebeans Coffeehouse until December and decided to sell the business in part due to difficulties keeping staff. The coffee shop then closed under its new ownership this summer and was sold to The Brooklyn Café.
“Just about everybody I speak to who has owned a restaurant, ... their No. 1 thing is staffing, because it’s very hard to keep people,” she said.
In a report from the Texas Restaurant Association in July, the majority of owners reported food and labor costs continued to climb from month to month while revenue decreased.
Rhonda Ellisor, director of the Small Business Development Center at Sam Houston State University, said severe weather has also affected small businesses.
As of Aug. 12, the U.S. Small Business Administration reported that over 400 businesses in Montgomery County had applied for Business Disaster Assistance this year.
“There were few restaurants that weren’t impacted,” said Hannah Tosch, senior vice president of retail services for Colliers Commercial Real Estate. “When we checked on our clients, local and corporate groups, we didn’t run into anyone who hadn’t lost power from two to six days.”
Looking ahead
Despite the closures this year, at least 36 businesses that serve food or drinks have opened in The Woodlands area since January, Community Impact reported.
The new openings include locations for regional restaurants such as Niko Niko’s, Gloria’s Latin Cuisine and Phat Eatery.
Florczak said many diners are more discerning about where they choose to eat, so his approach is to try to make his location more appealing to customers.
“If you go from [dining out] from 10 times a month to five or two, [you’re] going to be more critical, and go to your favorites,” he said.
Ratanaarporn said she is taking several approaches such as offering catering in the future.
Wade Greene, director of retail services with Colliers, said repeat business is key for restaurants.
“Brands that can provide an experience and a positive dining experience ... that will get someone to come back again, ... those groups are going to continue to grow and survive,” he said.
Asia Armour and Rachel Leland contributed to this report.
