Is the Out-of-Town Chain Invasion Hurting Independent Houston Restaurants?
There’s a saying that “a rising tide lifts all boats.” In the growing, rapidly changing and highly competitive world of Houston restaurants, that’s not always the case.
2018 was yet another year of rampant growth for the Houston dining scene. For food journalists and avid diners trying to keep up with over 100 new, high-profile eateries, it’s been challenging. In Houston, there is never a shortage of new menus to taste, new chefs to profile or new cocktails to sip. As Houston continues to receive accolades on a national level for its dining scene, it has also attracted restaurant chains from all over the world that want a piece of the action. While this culinary Wild West is a diner’s delight, it presents new challenges for small and independent business owners.
Along with all the new restaurant openings came a bunch of high profile closings, many of which shocked loyal customers as decades-old institutions shuttered in the face of greater competition on price points and rising business costs. What began as a gradual introduction of out-of-town chains into luxury developments like Highland Village and City Centre has spread into the heart of urban centers that define Houston. In Rice Village alone, decades-old institutions Mi Luna and the Gorgeous Gael, shuttered this past year as out-of-town chains completely altered the area’s commercial landscape.
Even the best of the best aren’t immune. Kitchen 713 chefs Ross Coleman and James Haywood received an impressive James Beard Award nomination in the Best Chefs Southwest category, yet the restaurant still closed before the year was out. Just down the street, though, the Houston location of Memphis-based Gus’s Fried Chicken appears to be thriving.
The city’s trending culinary scene and attractive business environment mean that out-of-town chains are continually moving in. Just a few of the chains that opened locations in Houston over the last few years include Hopdoddy, Shake Shack, Snooze, The Flying Biscuit, Flying Fish, PDQ, Pluckers, The Halal Guys, Nobu and Kura Revolving Sushi Bar. Being from out-of-town does not mean these places are not good or worthy additions to the Houston food scene but it does mean more places — with deeper pockets — are taking up existing and potential restaurant space. The law of supply and demand dictates that when demand is high, costs go up — and that means mom and pop shops have to seek affordable, modestly priced real estate in the suburbs.
“I don’t know how they can price their burgers the way they do,” says Justin Turner, owner and founder of Bernie’s Burger Bus, in reference to the Austin-based burger chain, Hopdoddy, which, after opening locations in The Heights and Clear Lake in 2019, will have six stores in the Greater Houston area. “When I started as a food truck, the big boys weren’t in town. They weren’t even thinking about us.” From Turner’s perspective, the large-scale buying power of corporate operations like Hopdoddy and Shake Shack allows those competing businesses to sell a product of equal quality to his for less money, while operating at a higher overhead. Chains can afford more expensive real estate, spend more on publicity and still sell a cheaper product thanks to the economy of scale. In order to compete, small business owners like Turner are forced to shrink already-narrow margins while trying to expand operations to stay relevant.
The result of this gradual takeover is not merely economic. The influx of corporate restaurants and out-of-town concepts also threatens the authenticity and uniqueness of the food scenes in individual Houston neighborhoods. Yes, local business owners suffer but the lasting effect is on the culture. Houston’s respected culinary reputation was built by independent restaurant owners and chefs. As neighborhoods lose independent institutions to corporate chains, the authenticity of not only the neighborhood dining scene, but of Houston’s urban identity, is put into question.
However, even for all the downsides, there are independent Houston restaurant owners who can see the silver lining behind the influx of chains. Tony Nguyen, chef and partner of Saigon House, believes that well-known restaurant chain locations can be intense competition — but also actually bring traffic to small, independent restaurants in less-visible areas. “Yes, you will lose opportunities but there is potential for growth. [Large chains] can help a small business by drawing traffic to the area. Saigon House is located in Midtown but on the underdeveloped side of the rails. If I had a couple of large chains in my area, it would be great for business.” Nguyen also believes that the influx of chains is a sign that “everyone is finally taking notice of Houston and all of its greatness.”
Alli Jarrett of Harold’s Restaurant & Tap Room and the newly opened Low Tide in Finn Hall sees the city’s evolving culinary scene as a net positive for diners and business owners alike. “Houston is one of the most authentic cities in America, especially given we have no zoning, which means that each neighborhood has maintained most of its individuality,” said Jarrett. She thinks that although new restaurants coming into areas like the Heights may not have originated in Houston, each adds a different charm and flavor to the neighborhood with their unique fare. “As I look around, the multi-unit concepts being built, and the ones coming, are smaller and very focused on specific menu offerings. It’s not what is typical for chains with freeway or shopping mall access and giant page-turning menus.”
Jarrett makes a valid point. Concepts like Ford Fry’s La Lucha and Superica — twin restaurants launched in 2018 by the Atlanta-based chef-owner — can hardly be accused of being inauthentic or damaging the city’s culinary reputation. In fact, this publication and several others ranked La Lucha among Houston’s best new restaurants of 2018. Yet, for every La Lucha that opens, the city gets another Torchy’s Tacos. For every BCK Kitchen & Cocktail Adventures, we get a Halal Guys. These are not objectively bad restaurants. Both Torchy’s and The Halal Guys are respected eateries with fans across the country. Yet, each represent cuisines and concepts that existed in Houston long before their arrival. Their introduction into the local economies can lead to hardship for small business owners with smaller margins and less branding power.
“I think we’re fortunate to have so many burger places around our city,” says Ricky Craig, founder and owner of Hubcap Grill. The Houston chef, whose creative burgers have appeared on countless Houston best-of lists, sees the city’s changing culinary landscape as ultimately positive for consumers — but challenging to small businesses. “I think it can have a negative impact as far as mom and pops.” (In fact, Craig may soon face an impact of his own when the newest Hopdoddy opens just down the road from the Hubcap Grill on 19th Street.)
While he welcomes all comers to Houston’s restaurant game, Craig recognizes the tremendous pressure that corporate chains put on independent restaurants, admitting that he’s had to implement his own changes to survive in a highly competitive environment. “My Clear Lake location was designed as an actual walk-through. You order at the counter and can sit down at the bar and have a beer. I improved by getting out of the mom-and-pop way of doing things.”
“Every time you see a new guy from out of town, the focus comes off of us,” says Turner. The burger master laments that local chefs are often overlooked in the publicity whirlwinds that surround new openings. “It gets watered down,” he says of the city’s culinary identity when too many corporate chains invade an area.
While Turner urges diners to choose local as often as possible, Jarrett believes the burden to save local businesses does not fall on the consumer, but on the businesses themselves. “Everyone has their own preference in what they like or don’t like, and whether you are an independent business or a part of a multi-unit group, it is up to the staff to provide the best quality in everything to have the guest come back,” she said.
These opposing viewpoints from small Houston business owners reflect the polarizing nature of the issue. Where is the line between a truly diverse restaurant scene and one which protects its regional identity? Certainly, the scales have been tipped in some areas of the city, such as The Galleria. On the other hand, the Heights still maintains most of its charm despite the influx of out-of-town chains.
It’s the responsibility of restaurants to be appealing enough to encourage diners to return. On the flip side, consumers can consciously choose to support local institutions and promising young upstarts. It is their dining dollars — or lack of — that usually decide the fates of these businesses. There’s a balance to be struck between supporting local restaurants and exploring everything the city has to offer — and it’s important to achieve that balance before some choices become little more than memories.