For Alex Paredes, chef and owner of Carnitas Lonja, the slowdown started more than a year ago.
Fewer people were coming in, and he noticed that those who used to buy his melt-in-your-mouth carnitas by the pound were more often buying it by the taco.
Construction in front of his Roosevelt Avenue location also hurt. “First they took out all the sidewalks,” Paredes said. “Then they took out the road. Basically, we were left with no traffic for maybe a year.”
Paredes was one of a handful of popular restaurant owners who announced in early December that they’d be shutting down in the new year, along with Sangria on the Burg and Sari Sari Supper Club. Since then, more restaurants have announced closures, including Tlahco Mexican’s Northside location, Downtowner Bar & Kitchen in New Braunfels and Camelia’s Taqueria. Many more closed earlier this year.
Other restaurants have sent out pleas on social media urging customers to come in lest they suffer the same fate, such as Deco Pizzeria, which has already closed its Medical Center and takeout-only locations.
The restaurant business has always been a difficult one, but 2023, despite managing to avoid a predicted recession, seems to have been especially hard on local restaurateurs.
Unlike inflation, prices that rose during the pandemic have not come down, and the labor market remains tight, despite rising wages. The summer was especially brutal for local restaurants, many of which built patios in an attempt to stay alive during the pandemic, only to watch them sit empty as the extreme heat broke records.
‘What am I doing wrong?’
“We’re all sharing horror stories,” said Ceasar Zepeda, chef and owner of Sangria on the Burg. Other owners “have been calling me asking, ‘What am I doing wrong?’ And I’m like, it’s not you, we’re all in the same boat.”
Since the announcement, customers have been streaming into his Fredericksburg Road restaurant for one last visit. They’ll ask why he’s closing, Zepeda said, but in the same breath, they’ll mention that they haven’t visited in two or three years.
Zepeda thinks many consumers’ restaurant habits remain altered from the pandemic. People are still ordering takeout more than they’re going out, and they’re prioritizing quick and cheap. He said he sees the trend even in his own family.
A survey from the Texas Restaurant Association appears to bear out his observations. Statewide, 64% of restaurant operators surveyed reported a decrease in customer traffic over 2022, said Dawn Ann Larios, executive director for the West region of the association, which covers San Antonio, and 47% reported a decline in sales. Almost a third of those surveyed reported that they were not profitable in 2023, she said.
Much as with the overall economy in which consumers voice concerns yet are still spending, the statistics don’t seem to tell the entire story of the restaurant business.
“Restaurant sales rose steadily in recent months, as resilient consumers maintained their willingness to spend on experiences,” read the opening line from a recent analysis by the National Restaurant Association.
And while Mastercard Spending Pulse reported a 3% increase in holiday spending overall — defined as Nov. 1 through Christmas Eve — compared to last year, it found that consumers spent almost 8% more in restaurants.
Zepeda suspects much of that increase has flowed to chain restaurants, especially fast casual and fast food, which have prime locations and national marketing budgets behind them. He worries that customers aren’t thinking about how the choices they make to eat at a chain affect local restaurants.
Same locations, new concepts
Yet despite all the challenges, Zepeda’s not leaving the restaurant business — at least, not while he has an active lease. Nor is Paredes, who said in the new year he’ll launch a restaurant in the same space as Lonja focused on chilaquiles, a simple Mexican dish of toasted corn tortillas tossed in salsa and sprinkled with queso fresco and crema.
Paredes said he’s focused on making something people in the neighborhoods surrounding his place can afford. He also wants to continue to help nurture other budding entrepreneurs on the property, such as Lovers Pizzeria and Leiah, a Venezuelan restaurant, both of which are already operating at what he plans to rebrand as Lonja Food Hall. In addition to the restaurants, he’s hoping to attract several food trucks.
Zepeda, too, will be debuting a more streamlined and less expensive concept in the new year at the Sangria location, although he wouldn’t divulge specifics. He cited Andrew Weissman’s move from fine dining to Mr. Juicy, his uber-popular burger joint, as inspiration.
Weissman, he said, has been ahead of the curve in recognizing consumers’ shifting tastes — and how difficult it is to make money in fine dining.
Weissman, who first earned national acclaim with Le Rêve, a formal French restaurant, went on to anchor Pearl’s early culinary scene with Sandbar and Il Sogno Osteria. His first foray into fast-casual was Moshe’s Golden Falafel, which opened to rave reviews in 2015.
“I got to the point where I wanted to serve the masses and not just the few,” Weissman told the San Antonio Report.
In 2019 he closed Moshe’s and opened Mr. Juicy in the same location. But the business really took off after he moved the restaurant into a former Jack in the Box at the corner of San Pedro and Hildebrand, Weissman said. The drive-through allowed the restaurant to stay open and busy through the pandemic.
Weissman agreed that many consumers are not dining out like they used to, and said he can trace payday fluctuations by how many single versus double cheeseburgers he sells. He said customers are still seeking great quality food and exceptional service, but they’re less willing — or able — to pay for it. “People’s expectations are so high.”
He believes he’s found a winning formula with Mr. Juicy — burgers are this country’s most popular food — and plans to expand next year with a location that seats far more people than the former Jack in the Box.
He said he fears that early 2024 will bring another wave of closures, as restaurants that were able to hang on thanks to holiday traffic are forced to shutter. “I think it’s going to be a bloodbath, honestly,” he said.
Larios of the Texas Restaurant Association said its members expressed some hope for 2024 in its most recent survey. “Cautiously optimistic,” she said.
The restaurant industry has always been tough, and it’s always been cyclical, Weissman said. Increasingly harsh weather will continue to impact the industry, as will continued economic uncertainty. It’s not for the faint of heart.
But no matter what, he said, “people are not going to want to cook at home every day.”
