CLARENCE FANTO: Is the Berkshires restaurant industry thriving? It’s a volatile business, but newcomers are plunging in | Columnists
LENOX – Restaurants come and go even in “normal” times, but more seem to be going across the county, and there are as many as a dozen available locations on the market. New restaurants will open at the same time, and more will follow this spring.
The fallout from the pandemic is still causing more closures than openings, according to several current and former owners.
The cost of doing business, especially opening a new restaurant, has become unbalanced due to Massachusetts’ strict regulations governing kitchen operations, a former owner said. Staff shortages persist and there are still kinks in the supply chain that affect food availability. Egg prices are sky-high because of bird flu, and inflation is eroding potential gains in a narrow-margin industry.
The National Restaurant Association reports that one in three new businesses fail within the first year. In Berkshire County, longtime owners are going out of business, seeking retirement, and hoping to sell or lease their restaurants. One former owner thinks asking prices are higher than they should be unless their property sellers are willing to be extremely patient.
But there are many success stories. Berkshire residents, especially during the long winter, are usually keen to sample newcomers. Word of mouth for startup companies is spreading fast, and Pittsfield has seen a welcome diversity in the kitchen, though two popular eateries, Flat Burger Society and Mission, have closed, much to the dismay of their regulars.
The deli at Loeb’s Foodtown in Lenox has a steady stream of lunchtime patrons year-round.
A non-exhaustive list of properties for sale or in some cases for rent includes Lakeside Bar & Grill in Lanesborough; several long-vacant restaurant buildings in Williamstown and New Ashford; Rouge at West Stockbridge; Trattoria Il Vesuvio, Pasta and Prime Italian Steakhouse & Bar, all in Lenox; Athenas to leeward; Cantina 229 in New Marlborough; and John Andrews of South Egremont.
“Everyone jumped on the wagon,” said Maggie Merelle, a 20-year Rouge owner and licensed real estate salesman at William Pitt Sotheby’s International Realty in Great Barrington and Lenox. “We’ve had a really good run and we’re all ready to pass the torch on to the next generation.”
The public’s keen appetite to gather after the peak of COVID – with its growing family of variants Omicron and its siblings – and the arrival of newcomers locally owned and operated by chains too numerous to list shows that there is good reason for optimism.
A key question: will the higher revenue outweigh the higher cost of doing business?
“That’s the question restaurant owners across Massachusetts are grappling with,” Stephen Clark, president and CEO of the Massachusetts Restaurant Association, said in an email interview. “Customers continue to flock to the restaurants as sales far exceed last year’s levels.”
Beth Parsons completes an order for a customer at the deli counter at Loeb’s Foodtown in Lenox.
“The restaurant industry is always volatile,” he pointed out, “but it doesn’t seem to be any more volatile than usual.”
He acknowledged concerns about the lack of available staff, which has led many restaurants to reduce the days and hours they are open, although he cited recent improvements in the work situation.
While overall supply chain tensions have eased, Clark explained, “The random lack of product availability calls for flexible menus.”
“Inflation remains the biggest challenge and menu prices can only get so high,” he said. But catering to diners who enjoy al fresco dining in season and expanding the range of food and drink options to go are vital as the restaurant industry continues to recover and expand, he suggested.
He also noted that ownership change is a constant – “some operators are closing and selling due to ongoing impact of the pandemic; Some are realizing that this may be the time to focus on retirement. others may have children who are not interested in taking over the business.”
At the same time, Clark pointed out, demand for entry into the restaurant industry also appears to be increasing, with transfers at elevated levels, according to state and local licensing authorities.
Another factor concerns the reported reluctance of banks and other financial institutions to invest in a turbulent industry. “Anecdotally, we’ve heard that restaurant financing is tightening a bit,” he noted. “This would be expected based on the global market situation and inflation.”
In West Stockbridge, Merelle is at the forefront of restaurant transactions. Their buildings — Rouge and a newly built wine store — came on the market last April, originally listed for about $1.2 million but now listed for $995,000.
Also, co-broker on the deals, Merelle, has received plenty of nibbles but no deep bites yet, she told The Eagle in a recent conversation.
When asked why she decided to sell a location she described as extremely successful – a favorite of former Governor Deval Patrick – Merelle explained, “For me, this was a fork in the road. I closed on December 31, 2021 and started construction to reopen Rouge and open the wine shop. But I decided I needed a longer period of personal renewal and could focus more on a successful career in real estate.”
In her view, “new owners can bring a fresh start, a colorful new palette. It takes energy and the right fit.”
Acknowledging the challenges in food and beverage costs and product availability, Merelle emphasized an optimistic view.
“There is joy again in the streets to come together and celebrate, dine and unite as a community after so long in isolation. I’m 100 percent “hope-timist,” she joked. “People think of the Berkshires in terms of health, wellness and nature. Eating out and going out go hand in hand with it.”
A strong local fan base is essential, especially for the slower six months of the year.
But as tourism remains buoyant and second homes soon return from their winter-season havens, the bottom line is that restaurateurs in the Berkshires, including newcomers, have a reasonable chance of succeeding.
Last Saturday night, restaurants in Lenox were buzzing with one reporting hours of waiting for tables during prime time. A good problem for a city in late January.
