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Local Restaurants Face New Kind of Competition

Build and Strengthen Personal RelationshipsRestaurant business is a tough business. Profit margins are low – often 10-15%, and costs are always increasing. They say that 1 in 4 restaurants that open will close within a year. In Kingston, the density of restaurants downtown is very high, and although the natural lifecycle of openings and closing occur every year, there is an impressive balance of long-established businesses as well as popular new spots. Kingston is undeniably a good place to be a restaurant – despite stiff competition, Kingstonians are willing to pay for a good meal out and are open to trying new things. If a restaurant is able to carve out their place in this town, they are sure to find a dedicated following.

Luckily for restaurateurs, our downtown eating preferences seem to favour ‘the little guy’. The abundance of independently and locally owned restaurants in the core is yet another example of Kingstonians being excellent supporters of local businesses. Longtime staples like Brew Pub, Windmills and Chez Piggy have been around for decades. Recently, though, the opening of two major chain restaurants – Milestones and Jack Astor’s – has arguably changed the face of downtown Kingston.

Thus far, downtown Kingston has existed with a relatively small number of full-service chain restaurants. Except for in the hub, the Keg and Lonestar were essentially the only major restaurant franchises operating in the downtown area. Tir Nan Og is another example of a franchise that many locals do not even realize is a chain. Even so, over the years they have established themselves as fixtures in the culinary landscape. The Keg is always busy, tucked into its discreet hideaway on King St, while Lonestar is a bit more conspicuous blasting music from its patio in the summertime. Despite this, many downtown dwellers have displayed a range of emotions regarding the opening of both Milestones and Jack Astor’s.

The opening of Milestones and Jack Astor’s has certainly brought new business into the downtown core. In fact, many downtown restaurant owners feel that these new spots are attracting crowds from the West End who wouldn’t normally make the trek, and that their own clientele are as faithful as ever.

Moreover, the buildings that Milestones and Jack Astors now occupy (the old S&R and TD Bank offices) are historical buildings that have been empty for years. These locations are beautiful but come with a hefty price tag – one that can arguably only be footed by major chain operators. Luckily, the City of Kingston had a significant say in the renovation of the façade of these buildings, including the signage (as a result we have dodged a neon, donkey-adorned sign.) Unlike the eyesore Lonestar, these ones blend in with the lovely brick and limestone aesthetic of the area.

But one problematic observation we are hearing is that these openings have coincided with closures of some independent locations. Aroma, one of my favourites has recently shut its doors, alongside Zappa’s, and The Pasta Shelf. Tango, once an institution, closed up merely one week ago. So what’s the story?

To be fair, January and February are slow months for all restaurants, and ones that have struggled to make ends meet through the holiday season will often throw in the towel around now. If we’re talking recession, chain restaurants have a lot more wiggle room when it comes to liquidity in hard times. If certain locations are losing money, there are always others to bolster sales and diversify their risk. Since the restaurant world is a game of saving dimes, chains benefit from lower costs thanks to economies of scale.

For single independent locations, it is a lot riskier. Even just having two or three restaurants (like Le Chien Noir with Harper’s and Atomica) can help ease the burden of declining business. Restaurants located in hotels also have a better chance of staying afloat, especially if the hotel has a stake in the restaurant, as hotels tend to have a higher profit margin than restaurants do.

Whether we like it or not, these places are probably here to stay. And yet, the market isn’t quite saturated. Despite sad closures, there have recently been wildly successful openings. Good luck finding a seat at Red House any Thursday, Friday or Saturday evening. Geneva Crepe Café is another example of a place that quietly opened 2 years ago, and has since established itself as a must-try for locals and visitors alike. There is a lot of buzz around MLT DWN, and Maru has put the spotlight on the ramen trend sweeping North America. We can only hope that as discerning eaters we will continue to vote with our dollars and keep the most deserving places afloat for years to come.

Time will tell the effect these chains will have on our food culture in Kingston. Some people say that Kingston is a testing ground for chains (remember when Tim Horton’s tested their new sizing scheme and confused us all?). Could it be the beginning of a trend moving into the previously independent downtown core? Should we gear up for a waterfront Montana’s or Swiss Chalet? On the other hand, we all know the saga of poor Mexicali Rosa’s – it’s former building now dubbed the “black hole of businesses.”

How will this change the business of established joints and influence the success of new openings? As the city with the most restaurants per capita in the country, everyone is vying for share of stomach of our small population, and we can only eat so much.

Photo credit to: Thomas Hawk.

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18 thoughts on “Local Restaurants Face New Kind of Competition

  • February 13, 2013 at 12:18 pm
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    We loved Tango, it was one of a kind. Sad that it is now gone.
    We have tried both new chain restaurants only to find out poor service, ordinary food and pricy beverages.
    We will continue to support regularly our favorites: Ly's Place, Red House, the Pilot House and the Iron Duke on Wellington.

  • February 14, 2013 at 9:50 am
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    I was really sad to see Tango close, especially so suddenly. Downtown Kingston is missing a good cocktail lounge – the kind of place you can go for a nice martini or unique cocktail. Let's hope that the recent closure of several independent restaurants will pave the way for some new and innovative culinary attractions!

  • February 14, 2013 at 11:26 am
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    Well balanced article. It would seem that the construction and pre-Jack Astors competition would have more to do with the closing of Tango. A shame to lose a great place but that is the circle of life for restaurants.

    I would argue that the introduction of the well-oiled machines of the chains will cause the smaller local restaurants either step up their game or suffer. The increased traffic downtown means more opportunity.

  • February 14, 2013 at 1:21 pm
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    I thought I heard that Tango was just sold, so it isn't actually closing. Does anyone know?

    • February 14, 2013 at 3:30 pm
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      I also thought it was for sale, but I've been hearing more recently that it is closed. I couldn't find a definitive reason, but I'd be interested in knowing. Maybe it's only temporary… I was very surprised, it has always been such an establishment in my opinion.

      • February 18, 2013 at 8:40 am
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        Tango was a really unique venue that appealed to the older crowd who don't really have a place to call their own. I'm cautiously optimistic that whatever is happening there is only temporary, and that when it re-opens, it will still have much the same atmosphere.

  • February 18, 2013 at 4:59 pm
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    Maru seems to be in trouble. I never see a soul in there, and the front of the restaurant is now plastered in signs that show they're trying every trick in the book to stay afloat – now open 7 days a week, now serving sushi (they said they didn't want to be yet another sushi place!) I kind of doubt it will make it to tourist season, which is too bad.

    I'm also surprised at Tango being shuttered, it always seemed to be busy, and it must have been sudden, as I saw a hand-written meeting relocation sign for some French-language club on the door. Hope it's just being sold, but peering through the window it looks very much like a closure.

    • February 19, 2013 at 11:41 am
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      That's interesting/ unfortunate about Maru – it definitely had potential. Ramen is a big food trend right now, and if only Maru could bring the kind of experience that made famous ramen spots like Momofuku and Ippudo so successful to Kingston, I think they could do very well.

    • February 20, 2013 at 8:56 am
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      I agree, Maru is definitely in trouble. I can't say that I was thrilled with my initial experience there, and suffice to say I haven't returned. It's a huge space (3 stories) with a rent that can't be cheap. I've often thought about going to the upstairs karaoke bar, but have yet to make to make it out.

      • February 23, 2013 at 11:04 pm
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        The upstairs karaoke bar is an absolute blast! I went there with my roller derby team and it was so much fun to have a private room, our own bartender, total control over the song order — and it was completely affordable for a group of ten or so. I will definitely be back.

  • February 22, 2013 at 9:09 am
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    I was so disappointed with Jack Astor's the food was not great , and it was freezing cold, right down to the hand dryer in the bathroom. Do not wash your hands girls as if and when you do you will be frozen for the rest of the night . We had asked the server if she found the hand blower in the girls bathroom had just had freezing cold air blowing and she said she had not noticed. It was freezing and everyone at our table could not talk about anything else except how cold we were , will take a while to get me back there , next time I will be going to the dukes or the raging bull or somewhere that has heat…….

  • February 25, 2013 at 8:04 pm
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    The reality of so many of the cities in gentrification mode is often the economic casualty of the independent businesses/eateries. It's just a function of the higher rents that are brought upon by a "hip" (no pun here) area…and downtown Kingston falls into that. In addition to higher rents, the landlord also (ideally) wants a tenant thats going to be around and while and can sustain rent increases…which usually means banks, drugstores, and the chain eateries. Manhattan is setting the template for sterilization through gentrification, but Kingston is heading down the same path, if on a much smaller scale. The vast majority of consumers want predictability that their Jack Astors tastes the same in Kingston as it does in Toronto, and mediocrity is often part of that….its a shame but that's the world we are living in….

    • February 28, 2013 at 3:50 pm
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      All good points – and to add because of the increase in Kingston's transient population ie Military, contract work etc. the instantly recognizable chains win out unfortunately.. that being said I think it's increasedly important that independants cater to a kingston public that wants unique cuisine that is consistently excellent..the independants who remain will be the ones who never serve less than a great meal…

  • March 25, 2013 at 11:23 pm
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    Jack Astor's despite being a chain and having a predictability advantage will not last here. The food is atrocious.

  • March 27, 2013 at 5:50 pm
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    Saw the youbidlocal people clearing out the Pasta Shelf today, so it is definitely not just "closed for renovation." http://auctionnearyou.maxsold.com/view-auctions/c

    The Limestone Cupcakery is also gone, I guess the people who bought Aroma were threatening to sue the landlord over a misrepresentative architect's drawing, and the landlord decided to terminate the Cupcakery's lease to make up the extra square footage.

  • March 31, 2013 at 8:11 pm
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    this may be off topic , but with the Pasta Shelf auction item 30 went for $75 for 2 and you can buy the same product at Costco for 19.95. Crazy overbidders

  • April 1, 2013 at 4:38 pm
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    I couldn't find (didn't look) for the Princess Sidestreet posts, so I'll just mention my observations here: Thousand Villages on Princess is closing on April 25, and there is the world's most ridiculous business opening at 62 Brock St, an Olive Oil Tasting Bar. Maybe they also sell Olive Oil and like, Olive Oil T-Shirts "My parents tasted Olive Oil and all I got was this lousy t-shirt!" "Oil?! I'll have Olive it!"

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