Tables are turning over
I tend to ask people to do the impossible — to predict the future, on the record, so I can print it in SeaFood Business or here on SeafoodSource. In seafood, as with any commodity-oriented industry, insight into what may or may not happen down the line is often more valuable than an account of what’s already happened. Since the state of economy is top of everyone’s mind, I’ve wanted to know how the restaurant industry — a true economic bellwether, if there is one — will fare in 2011.
My interest piqued back in December when I interviewed Dave Jacquin, managing director of North Point Advisors in San Francisco, for the January Top Story in SeaFood Business about Landry’s Restaurants CEO and now sole owner Tilman Fertitta. Jacquin, whose firm is involved with about half of all U.S. restaurant industry merger-and-acquisition activities, by his count, was as brash as he was bullish.
“The comeback has started. The recession is over. The worst is behind us, and you can print that,” Jacquin told me. I didn’t, but I did include several other positive-sounding quotes from him about Landry’s and restaurants in general. He got me thinking, so I set off to see if others shared his opinion. A restaurant recovery would be music to the seafood industry’s ears, since historically about two-thirds of all seafood consumed here in the United States is at restaurants.
For the March Top Story in SeaFood Business, which we’re putting the finishing touches on now, I found several others who agree with him. I spoke with operators of three seafood chains — Joe’s Crab Shack, Rockfish Seafood Grill and Cameron Mitchell Restaurants’ new Ocean Prime — and found them all to be quite optimistic, following two-plus years of gloom and doom everywhere you looked. All three companies are coming from different places, but headed in the same direction: forward.
“Over the last year, [expansion] hadn’t even been a topic. But for the first time, we’re thinking about what the next restaurant will look like and where it would be,” said Tommy Lee, who became CEO of Richardson, Texas-based Rockfish Seafood Grill last March, shortly after a new ownership team took over the struggling company. “Capital markets dried up and got tight. They’re opening up a little bit now. The opportunity to grow is opening up, and you’ll see that across the industry this year.”
Rockfish peaked at 25 units in 2004, a number that has since fallen to 14, mostly in Texas. But the mere thought of the chain growing again is a sign that confidence in restaurant sales — and seafood — is back.
Cameron Mitchell Restaurants has steady growth plans for its upscale seafood concept, Ocean Prime, nearly three years after it sold Mitchell’s Fish Market, Columbus Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse concepts to Ruth’s Chris Steak House for $94 million. A ninth unit is planned for Atlanta this fall, with three additional units per year going forward.
Joe’s Crab Shack, the biggest seafood chain I spoke with, has even more aggressive plans, eyeing up to 10 new sites this year alone. And Darden Restaurants, which operates the biggest U.S. casual seafood chain, Red Lobster, is thinking growth despite its forecasts of rising seafood costs and other challenges. The Orlando, Fla.-based restaurant giant is co-branding Red Lobsters with Olive Gardens, and is looking at college campuses and airports as possible sites.
What’s more, the National Restaurant Association’s industry forecast, released last week, predicted a record $6 billion in U.S. restaurant sales this year, up 3.6 percent from 2010.
Maybe you need more convincing that the economy is turning the corner — it’s going to take more than positive restaurant comps to signal a complete change. But the next time you’re told that the next available table will take 45 minutes, sit back and smile. And then order the salmon.