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Restaurant chain growth contributes to closure of Shreveport eateries

| Written by ILSR Admin | No Comments | Updated on Jan 30, 2014 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/restaurant-chain-growth-contributes-closure-shreveport-eateries/

Shreveport Times, January 30, 2014

After more than 20 years in business, another neighborhood restaurant will close its doors Friday.

Cafe Pierremont, known for its fresh vegetables and daily lunch specials, joins the handful of local restaurants that have closed in the past few months.

“It’s time to turn the page,” said owner Barbara Landman, who purchased the Shreveport business in 1994.

Landman is closing for personal reasons but acknowledged recent chain restaurant growth hurt business as it did other local restaurants that shut their doors before hers. And she anticipates more are to come.

“These chains are killing everybody. It all started right around 2009 and 2010, when they really started coming in.”

Since 2009, nearly 85 chain restaurants have opened in Shreveport, Louisiana Department of Health and Hospitals restaurant inspection records show. (These include fast-food, fast casual and sit-down chain restaurants but not local chains such as Nicky’s Mexican Restaurant.)

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But there are significant economic benefits to spending at locally owned restaurants versus chains, said Stacy Mitchell, a senior researcher at the Institute of Self-Reliance. Consumer spending at independent restaurants can pump more money into the local economy than at a chain, she said.

A recent study conducted by Civic Economics, an economic analysis firm in Chicago and Austin, Texas, found $1 million in consumer spending at a local restaurant generates $650,000 in additional economic activity, more than double the $300,000 generated by a chain restaurant.

“The primary reason is because profits stay local, and a lot of local restaurants buy goods and services from other local businesses,” Mitchell said.

Those businesses often bank at local banks, advertise with the local newspaper and use local accounting and printing services, she said.

Studies such as the one Civic Economics conducted raise awareness of how a community can benefit from spending at local restaurants and shops, Mitchell said. As a result, local businesses in more cities are joining forces to promote “buy local” initiatives, which seems to be changing behavior, she said.

“They’re opting to go to a local restaurant or store a bit more often than they did in the past.”

In addition, some cities are creating incentives supporting local businesses’ growth, such as local procurement policies that give preference to local businesses. That also is encouraging spending at local restaurants, Mitchell said.

Read the full story here.

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