If it feels like more restaurants are closing than opening in Tyler lately, you’re not imagining it. Several local spots have shut their doors in the past year, including Roma Italian Kitchen & Bar, Corner Bakery Cafe, and Razzoo's Cajun Cafe, leaving gaps in the dining scene.
The main culprit behind recent closings is operating expenses. Food costs have increased roughly 38% over the past five years, and labor costs are up about 35% over the same period. Lease costs have risen alongside them, compressing margins that were already razor-thin.
This pressure falls hardest on full-service and casual dining concepts. Casual and fast casual restaurants have adapted better to current consumer behavior, while family dining and fine dining have posted some of the steepest same-store sales declines. That trend is playing out right here in Tyler.
From a leasing standpoint, what’s notable is the format of new activity entering our market. Across Texas, occupancy rates in the quick-service restaurant (QSR) sector have risen significantly, reflecting strong demand for QSR properties in high-traffic locations.
Tyler is seeing that as well, with concepts like Smalls Sliders, Another Broken Egg Cafe, and a new Chick-fil-A West Tyler all choosing to locate here. The Parkside development on South Broadway is also positioning to bring high-profile restaurant and entertainment concepts to Tyler in ways the market hasn’t seen before.
Smaller footprints, drive-thru formats, and well-capitalized operators are where the leasing momentum is. For Tyler, with our growing population and diverse local economy, this signals opportunity as much as it does transition.
Originally published in the Tyler Morning Telegraph.
