Saturation point: Too many restaurants on the Downtown Mall?
Seventeen years ago, when Bill Hamilton and his wife, Kate, opened Hamilton's at First & Main on the Downtown Mall, it was a big risk.
"At that time, a seasoned local restauranteur advised us that he would not drop a dime on a Downtown Mall lease," says Hamilton.
Today, of course, you're lucky to get a downtown lease.
By a reporter's count, there are now 48 full-service restaurants on the Mall. That's not counting 6 coffee places, 3 ice cream/frozen dessert places, 10 lunch spots, 3 bakeries, 5 grocery stores, and 2 pizza places, bringing the total number of eateries to 77. All this within a little over 2 million square feet, or the approximate size of the exhibit space in the Las Vegas Convention Center.
"Every year since we opened," says Hamilton, "competition has increased and dining dollars have elastically followed to the worthy."
Some restaurant owners, however, worry that the Mall dining scene, if left to the whims of the market, could become the victim of its own success.
Indeed, the sheer number of restaurants, as one owner says, has diluted the market. As a result, many restaurant owners are seeing their profit margins shrink every year. What's more, the high cost of downtown space makes opening a new, untested concept all the more risky, which could eventually diminish the variety of places we see on the Mall.
"Blazing a new trail is even harder than re-branding or taking over an existing establishment and opening anew," says Mall restauranteur Stu Rifkin. "Adding new establishments, and there seem to be more and more coming, dilutes the business for everyone."
"I think the amount of restaurants we have on the mall is reaching its saturation point," says Brookville Restaurant owner Harrison Keevil. "At this point we're in a good place because there are still differences between all the restaurants on the mall. But if many more keep opening up we'll start to see many of the same restaurants and those differences will disappear. "
Still, Keevil contends that competition can be a good thing.
"You can't get away away with selling mediocre food and service," he says. "You need to bring it 100 percent every night to survive. And I personally relish that pressure because it forces me figure out ways to set Brookville apart without resorting to kitsch ideas and couponing."
"My attitude is that all your competition is from within," says Rifkin, who has interests in The Nook and the Blue Light Grill. "While I wouldn't want Denny's to open next door to The Nook, we would still have our core customers, and my job is to keep them coming back."
Hamilton would agree. "Robust competition raises everyone's game and creates more value for customers," he says. "Of course, the downside is increased churn among businesses, but we all have to adapt and work harder to earn our market share."
Rapture owner Mike Rodi has certainly been working hard to capture his share. He agrees that the growing number of restaurants has diluted "already-shriveled margins."
For Rodi, the recent suggestion by vice mayor Kristin Szakos that the meals tax be increased to help cover a school budget shortfall, shows a lack of awareness about the precarious situation in which many restaurants find themselves.
As for the number of restaurants, the City appears content to let the market determine the flavor of that corridor.
"The City's desire is to see a healthy and vibrant downtown," says City director of economic development Chris Engel. "What that looks like in terms of the number and type of uses is a factor of market forces related to supply and demand."
Indeed, Neighborhood development chief Jim Tolbert says he's "never even heard a discussion" concerning the number or variety of restaurants on the Mall, never mind any concerns about it one way or the other.
In the end, what becomes of the downtown dining scene lies in the hands of those with the vision to push it to new heights.
One restaurant owner interviewed for this story, who wished to remain anonymous, claims there are not enough restaurants in Charlottesville, at least not enough good ones. He says he would like to see more restaurants competing on a much higher level such as New York City's West Village.
"That's what I want for our town," says the owner. "We need more restaurateurs and chefs to aspire to greatness. I have now lived here for 20 years, after long periods in New York and Los Angeles. I prefer this town to those. But I would like to see the food community get where those guys already are."Read more on: charlottesville restaurants