If you live at the beach, take a peek at the ocean!

The closing of several downtown Rehoboth restaurants over the last few months sparked a not-entirely-unexpected flood of traffic into my email boxes. As usual, the majority of these emails reminded me of how little most people actually pay attention to the business of eating here at the beach. The great majority lamented the closings: “Another one bites the dust,” they keened. Or the syrupy (and often insincere), “Oh, we will miss them! I thought they were doing so well!” Why insincere? Because a significant number of these comments come from the same people who proudly announce online that “We never go downtown, because we don’t want to (1) pay a few bucks to park, or (2) – [horror of horrors] - walk.” That sort of pretense is not the point of this article, but it does seem to have a way of cropping up on this page from time to time. 

The truth of the matter is that restaurants close for all sorts of reasons other than lack of business. Rents are notoriously high - and going higher - in downtown Rehoboth. After all, there’s only so much space a block or two from the Atlantic. Lacking a comprehensive and well-thought-out financial plan, some restaurant owners face the option of pricing themselves out of the market just to make it through the five or so months of actual good business. Compound that with huffy online commentary shrieking about restaurants being “pricy,” “greedy” and “more expensive than the restaurants at home,” and even the bravest downtown proprietor can be tempted to throw in the towel. 

Those who are financially strong enough can choose to buy the property. But many landlords wouldn’t dream of selling. In a Facebook post from a year or two ago, Richard Krick, the former co-owner of Summer House, stated, “…I can tell you that the [downtown] rent is out of control and had I not been lucky enough to buy my property I too would have had to call it quits.”  Purple Parrot owner Hugh Fuller, a wise businessman and property owner, responded, “Absolutely. That’s the only way [to do it] downtown. I feel like I was one of the lucky ones.”  

Restaurant Business Magazine quotes Bill Post, restaurant consultant and co-founder of the Chicago-based Roti Mediterranean Grill chain: “As landlords continue to raise rent at an alarmingly fast clip, it’s becoming more difficult for operators to abide by the Golden Rule of 10: Never let rent exceed 10 percent of your gross profit. So if negotiation is out of the question, the remaining options are to close, relocate or eat the cost.” 

The vagaries of small-town regulation, inspections and the like can cost an entrepreneur thousands of dollars as he or she waits for a signature on an approval for this, that or the other thing. Some politicians go through the motions of trying to find “solutions” for the very problems they actually created. 

Resorts are one of the most difficult environments for finding and keeping good help. The simple fact is that a significant percentage of those who apply for jobs are not qualified, while others either move on to the big city for a more consistent year-round income, or go back to school in the off-season. One of last summer’s casualties was a restaurant that was indeed doing well, but the owners had no choice but to close in order to fully staff their other locations. 

One of the reasons why we are blessed with so many good restaurants here at the beach is that more and more people are moving here full time. Cause and effect (not to mention the inviolable Law of Entropy) correctly dictate that more businesses will open to serve this increased population. Theory and conjecture are fine - until reality sets in: There’s only so much square footage a block or so from the sand. So restaurants have nowhere to go but out onto Coastal Highway. The dark cloud within that silver lining - at least for downtown eateries - is that customers now have more choices. Add that to the ongoing shortage of downtown parking (meters/permits notwithstanding), and all of a sudden the downtown entrepreneur faces yet another burden over which he or she has no control. 

So how do restaurants stay in business? One way is to employ the economies of scale. A group that owns three, five or 10 restaurants - especially if they are run cost effectively - enjoys safety in numbers. Small trends up and down are not as dangerous as they can be to a single location. Another way is to build a stellar reputation by providing consistently good food and service. Many of our one-location eateries downtown have earned that reputation. And out of that grows longevity. And out of longevity grows credibility. People will go downtown, pay to park and even … walk … to enjoy predictably good food and service. 

Another option is to carve out a niche with a unique concept, a one-of-a-kind ambiance, or even a particular kind of ethnic food. If done well enough and consistently enough, people will welcome this and visit time after time. 

Restauranting is a labor of love - with equal parts of both, applied day in and day out in constant opposition to the forces working against you. It has to be a labor of love - why else would anyone do it?