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Clarence Fanto: Is the Berkshires restaurant industry thriving? It’s a volatile business, but newcomers are plunging in

people eating lunch at Haven cafe

Diners eat lunch at Haven Cafe and Bakery in Lenox.

LENOX — Restaurants come and go even in “normal” times, but across the county more seem to be going, and as many as a dozen available sites are lingering on the market. At the same time, new dining spots are opening, with more on the way this spring.

Fallout from the pandemic still is causing closings to outnumber openings, according to several current and former proprietors.

The cost of doing business, especially opening a new restaurant, is out of balance because of strict Massachusetts regulations affecting kitchen operations, one former owner suggested. Staff shortages continue, and there are still kinks in the supply chain affecting availability of food products. Egg prices are sky high because of avian flu, and inflation is cutting into potential profits in a narrow-margin industry.

The National Restaurant Association reports that one out of three new ventures fail within the first year. In Berkshire County, longtime owners are aging out of the business, seeking retirement and hoping to sell or lease their restaurants. One former owner thinks asking prices are higher than they should be, unless those selling their properties are willing to be extremely patient.

But there are plenty of success stories. Berkshire residents, especially during the long winter, are usually keen on sampling newcomers. Word of mouth spreads rapidly for startup ventures, and Pittsfield has seen a welcome diversity in cuisines, even though two popular spots, Flat Burger Society and Mission, have closed, much to the dismay of their regulars.

woman ordering food at Loeb's Foodtown deli counter

The deli counter at Loeb’s Foodtown in Lenox has a steady stream of lunch customers year round.

A partial list of properties on the market for sale, or in some cases for lease, includes Lakeside Bar & Grill in Lanesborough; several long-vacant restaurant buildings in Williamstown and New Ashford; Rouge in West Stockbridge; Trattoria Il Vesuvio, Nudel and Prime Italian Steakhouse & Bar, all in Lenox; Athena’s in Lee; Cantina 229 in New Marlborough; and John Andrews in South Egremont.

“Everyone jumped on the wagon,” said Maggie Merelle, owner of Rouge for 20 years, and a licensed real estate salesperson at William Pitt Sotheby’s International Realty in Great Barrington and Lenox. “We’ve had a really good run and we’re all ready to pass the torch to the next generation.”

The strong public appetite for gathering in the aftermath of peak COVID — with its growing family of variants Omicron and its siblings — and the arrival of locally owned and chain-operated newcomers too numerous to list, indicates there’s good reason for optimism.

A key issue: Will increased revenue outweigh the higher cost of doing business?

“That is the question that restaurant owners across Massachusetts are grappling with,” said Stephen Clark, president and CEO of the Massachusetts Restaurant Association in an email interview. “Guests continue to flock to restaurants, as sales numbers are far outpacing prior-year levels.”

Beth Parsons smiles and wraps deli sandwich at counter

Beth Parsons finishes up an order for a customer at the deli counter at Loeb’s Foodtown in Lenox.

“The restaurant industry is always volatile,” he pointed out, “but it doesn’t appear to be any more volatile than usual.”

He acknowledged concerns over the scarcity of available staff, causing many restaurants to reduce the days and hours they’re open, although he cited recent improvements in the labor situation.

While supply-chain tensions have eased overall, Clark stated, “the random lack of product availability requires menus to be flexible.”

“Inflation remains the biggest challenge and menu prices can only go so high,” he emphasized. But patrons eager for outdoor dining in season, and the expansion of takeout choices for food and beverages, are crucial as the restaurant industry continues to recover and expand, he suggested.

He also pointed out that ownership turnover is a constant — “some operators are closing and selling due to lingering impacts from the pandemic; some recognize that this might be the time to focus on retirement; others might have kids who are not interested in taking over the business.”

At the same time, Clark emphasized, demand for getting into the restaurant industry seems to be up as well, with the number of transfers at elevated levels, according to state and local licensing authorities.

Another factor involves the reported reluctance of banks and other financial institutions to invest in a turbulent industry. “Anecdotally, we have heard that restaurant financing is tightening up a bit,” he noted. “This would be expected based on the global market situation and inflation.”

In West Stockbridge, Merelle is on the front lines of restaurant transactions. Her buildings — Rouge and a newly constructed wine shop — went on the market last April, originally at about $1.2 million but now listed at $995,000.

Also the co-broker for the listings, Merelle has received plenty of nibbles, but no deep bites yet, she told The Eagle in a recent conversation.

Asked why she decided to sell what she described as a highly successful location — a favorite of former Gov. Deval Patrick — Merelle explained that “it was a fork in the road for me. I closed Dec. 31, 2021, and started construction with the intention of reopening Rouge and opening the wine shop. But I decided I needed a longer period of personal renewal and I could focus more on a successful career in real estate.”

In her view, “new owners can bring a fresh beginning, a colorful new palette. It takes energy and the right fit.”

Acknowledging challenges in food and beverage costs and availability of products, Merelle emphasized an upbeat view.

“There’s joy in the streets again to come together and be festive, to dine and to unite as a community after being in isolation so long. I’m 100 percent ‘hope-timistic,’’’ she quipped. “People think about the Berkshires in terms of health, wellness and nature. Dining and going out go hand in hand with that.”

A strong local following is essential, especially for the slower six months of the year.

But with tourism remaining vibrant, and second-homers soon to return from their winter season refuges, the bottom line for restaurateurs in the Berkshires, including newcomers, shows a reasonable chance for success.

Last Saturday night, dining spots in Lenox were bustling, with one reporting an hourlong wait for tables in prime time. A good problem for a town to have in late January.

Clarence Fanto can be reached at cfanto@yahoo.com. The opinions expressed by columnists do not necessarily reflect the views of The Berkshire Eagle.

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