Apr 20, 2008 10:50 pm US/Central
Weak Economy Forcing Restaurants To Close Doors
(WCCO)
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A segment of Elm Creek Boulevard has been hit especially hard, losing a Joe's Crab Shack and a Krispy Kreme.
CBS
On Sunday, another Minneapolis restaurant closed its doors. Temple Restaurant and Bar, located in downtown Minneapolis, closed after a year and a half of business. Its owner says business decreased as food prices went up.
"We were doing okay but then the past couple months it just got harder and harder," said Temple owner Thom Pham.
When he looks back over the past year and a half, Pham believes that timing was everything. He thought other businesses would open up around the restaurant and help attract interest, but that never happened. Then food costs went up by more than 20 percent and a sluggish economy took its toll.
"It's just not the right time for it. Especially like a high-end concept like Temple," said Pham. In February, his restaurant tried a "naked sushi" concept where customers could eat sushi off a naked person, but it never panned out.
Pham is far from alone. Restaurants are struggling across the metro.
Al Madsen has worked for the City of Maple Grove for 25 years and has seen restaurants come and go, but this year has been an exception. A segment of Elm Creek Boulevard has been hit especially hard, losing a Joe's Crab Shack and a Krispy Kreme. Bakers Square and Green Mill have also shut their doors.
Like Pham, he blames rising food costs and the economy.
"When it comes time to taking a look at their expenses because times may be difficult, its usually the restaurants, the entertainment part, that the person will focus in on and scratch that from their budget," said Madsen.
Madsen and Pham agree that when it comes to this business there is not a sure recipe for success right now. Restaurants simply have to wait it out and hope that the customer's appetite is restored.
"People maybe used to eat out two or three time a week. Now they're maybe eating out once a week, or once every two weeks," said Madsen.
Popular restaurant chains are also having to adjust right now. Since the beginning of March, The Cheesecake Factory and Applebee's have increased their food prices to off-set a sluggish economy.
There are some positive signs. Pham owns two other businesses in the Twin Cities. His Azia Restaurant in Minneapolis is doing well, as is another restaurant in St. Louis Park.
In Maple Grove, a Benihana, T.G.I. Friday's, and a Pittsburgh Blue Steakhouse have all opened within the past year. Madsen said all three are doing well.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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