Jodi’s Journal: Restaurant industry reality demands support from local diners

Jodi’s Journal: Restaurant industry reality demands support from local diners

Jan. 5, 2025

It’s hard to make a hamburger out of cotton candy.

But I wouldn’t put it past the owners of Candy Cloud Factory to try.

After all, sister business Intoxibakes — located in the same Phillips Avenue space on The Cascade boardwalk — already created this treat made with a vanilla cupcake bun, vanilla buttercream condiments and chocolate brownie patty for the annual Downtown Burger Battle.

Just as I was about to begin this message, I noticed a social media post they made reminding people not to forget them on the north end of their building. Traffic has been down, they noted, since their neighbor Papa Woody’s Wood Fired Pizza closed late last year.

 

The end of one year and the beginning of the next often bring transitions in retail. This year, it seems to be concentrated on restaurants, which I think are facing multiple headwinds.

“People see it at the grocery store, and we’re getting hit with it too,” one owner told me. “Wages are double what they were 10 years ago, and all the costs — it’s not even just food, it’s insurance — all that has gone up significantly.”

The bar and restaurant industry generally is not a high-margin business. It succeeds on volume. It might look busy if you walk in during happy hour specials, “but that’s not enough to cover the overhead,” this person told me.

In the final days of 2024, I attempted to report about two high-profile closures: the downtown Papa Woody’s deal and the longtime south Sioux Falls restaurant McNally’s Irish Pub.

Neither story is what I’d consider finished yet. I held off as long as I felt I could on running both because it was unclear what the future might hold. As far as I know, it’s still unclear.

But what is clear is this: Much like your shopping decisions, as you make your dining decisions, don’t take it for granted that your favorite local establishments always will be there.

I had a memorable exchange with one of my favorite servers at one of my favorite restaurants late last year. She and her co-workers had been worried by a drop in business that corresponded with the opening of multiple new full-service restaurants.

It reminded me that I need to visit more often. But, for many reasons, I told her I felt business would normalize at her restaurant sooner rather than later, and the relief was apparent.

I don’t think that’s necessarily the case everywhere. I am beginning to wonder if this market is adding restaurants faster than it’s growing the resident and visitor population. Add that to rising overhead, consumers’ understandable reluctance to increase their dining budgets and even the impact of so many people using weight-loss drugs, and there’s considerable pressure on this industry.

Try to  keep that in mind as you support this month’s Downtown Burger Battle. This is a wonderful way to increase business for restaurants during the slower months, but try to be mindful in how you participate. If your plan is to order a burger or two for your table and leave without purchasing much else, try to go during slower times. Tip generously if you’re able. And remember how many local restaurants do not benefit from this promotion and actually might take a hit in business, including those outside downtown.

Credit to the team at R Wine Bar & Kitchen and Maribella Ristorante for creating a “pasta battle,” to Look’s Marketplace for a special offer on its signature burger and a corresponding contest, and to the number of other restaurants I suspect are getting creative to attract business during a slower time of year.

Restaurants with strong fundamental business ability, excellent — not average — product, solid locations and at least a decent ability to market themselves can still find success in this city. But even with all those factors in your favor, the landscape is more competitive and more difficult to navigate in everything from personnel to pricing than it was a year ago.

This also reflects why it’s key to continue investing in our visitor industry — the organizations that bring people to town, whether it’s for a weeklong conference, a sports tournament or even a social event. They help fill restaurants and balance out local residents who might be dining more at home for a variety of reasons.

Sioux Falls does an admirable job stepping up to buy local, but it’s easy given the steady stream of restaurants opening to think that the industry naturally is thriving on its own and doesn’t need additional support. Let’s not miss the warning signs that, behind the scenes, many of them could be assessing whether they have the right recipe to continue serving our community.


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