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VOL. 10 | NO. 44 | Saturday, October 28, 2017

Chain Reaction: Memphis Builds on National Restaurant Trend

By JODY CALLAHAN

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Morgan Hughes is a 22-year-old college student who regularly spends more than $100 a week going out to eat. Sometimes it’s a trip to Sonic, other times it’s a meal at Next Door in Crosstown Concourse, still other times it’s food from the restaurant where she works, Hog & Hominy.

Potbelly Sandwich Shop franchisee Fabian Nelson in front of his future restaurant in Olive Branch. (Memphis News/Houston Cofield)

But every week, she chooses to eat out and socialize instead of staying at home and cooking.

“I think that the quickness of it is very appealing. The price is very appealing,” Hughes said. “I would say my generation just appreciates food, but we’re (also) willing to try new things. (And) a lot of us are more willing to go out because we don’t have to cook.”

And it’s thanks to behavior like that from Hughes – along with millions of others lumped into the so-called millennial age group – that Memphis has seen a surge of late in chain restaurants coming to town, local real estate experts said.

In recent months, numerous regional or national chains have either opened here or announced plans. Those include Hopdoddy Burger Bar, Cook Out, Potbelly Sandwich Shop, Burgerim, Bruster’s Real Ice Cream and Farm Burger, to name a few.

“Last year was the first year that combined sales of restaurants and bars in the U.S. exceeded the combined sales of grocery stores. That’s reflective of the buying power of millenials. They spend a lot of money, but they spend it differently,” said Steve Levy of Levy Commercial Real Estate. “Generally speaking, millenials spend their money less on possessions, more on experiences, trips, vacations as well as entertainment. Restaurants fall into that. That’s one sector of the retail world that cannot be replaced by the internet.”

So while it might be tempting for Memphians to puff out their chests at the idea of finally getting a Dave & Buster’s near Wolfchase Galleria, or even a Wahlburgers that’s planned for Beale Street, the city is just part of a national trend, experts said.

“Part of it is that these things have already grown and developed in other markets. It’s not that Memphis is unique. It’s that they’ve determined that Memphis is a viable market after they’ve tested it in other markets,” Levy said. “Memphis simply is enjoying that same reality that other cities are also enjoying.”

Added Danny Buring, managing partner of The Shopping Center Group’s Memphis office: “We’re getting the benefit of a national trend.”

Buring only expects that to increase, too, with the continued rise of fast-casual restaurants – think Chipotle, Panera, Zaxby’s.

“Fast-casual has gone from nothing to a huge percentage of the growth, in addition to fast food. … That’s kind of a national trend. That’s a ton of the growth in the restaurant sector,” he said. “I think we’re going to continue to see that stuff explode. It’s easy, it’s fast, it’s not expensive.”

One of those new chains to open here was Burgerim, which first started serving gourmet burgers in February on the Highland Strip.

Akha Patel is one of the owners, and she believes Memphis is the perfect spot for that chain’s fourth location, after California and Texas.

“When my husband and I moved out here, we weren’t planning to be here that long. But Memphis is a city that’s grown on us. It’s turning into more of a fun place,” she said. “And with the population growth what it is now, and the culture, there are varieties of cultures here too.”

Another of those chains opening here is Potbelly Sandwich Shop, a chain that also offers live music. Collierville resident Fabian Nelson is getting ready to open the first location in Olive Branch, but hopes to add three more in the next few years. He hasn’t picked out sites yet, but said he’s considering Downtown and Midtown.

Nelson said he believes Potbelly, despite being a chain concept, will fit in well in the Memphis area.

“It’s a chain, but it has the funky vibe of the Mid-South. You have a very unique vibe in Memphis. It’s a little quirky,” said Nelson, who expects the first store on Goodman Road to open in December. “It’s not your average chain, if you will, in terms of appearance. And (we’re) bringing music, which is prominent in this area. We’ll have music during lunch. I want you to come and stay. I want you to come and hang out. I want it to be your Cheers, if you will.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
FORECLOSURE NOTICES 8 52 151
BUILDING PERMITS 158 699 2,751
BANKRUPTCIES 37 157 618
BUSINESS LICENSES 12 77 276
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0