On a Saturday night in January, Redbird was buzzing. Plates of chili-rubbed chicken, crispy fried mushrooms, and towering green salads flowed out of the kitchen to packed tables in the dining room, and gaggles of friends lined the bar as they waited to be seated. But a few weeks later, in early February, chef and co-owner Zeb Stevenson announced that the restaurant—which, since opening in 2019, had wowed diners and critics alike—would close its doors.
It’s not the only recent closure to rattle Atlantans. Last year brought the loss of the Virginia-Highland indie darling 8Arm, the beloved Midtown dive bar the Highlander, and Watchman’s Seafood and Spirits—which had just been named one of Esquire’s 27 Best Bars in America. All the while, second or third locations of some local restaurants, or new chain outposts, are opening left and right. A wave of closures at the height of the pandemic made sense. But as diners have returned in droves to sit-down restaurants—a 2022 survey suggests that more people are eating out now than before the pandemic—independent eateries have continued to struggle. What are restaurants up against these days—and how can they survive?
For Stevenson, the math was simple: The cost of both food and labor had gotten too high. “People are our number one expense,” he says. “It’s not the rent, although the rent’s a big contributor.” In an industry notorious for underpaying everyone from cooks to servers, the pandemic presented an opportunity for workers to demand more; restaurants responded by offering employees previously unheard-of benefits like health insurance and paid vacation. “But in order to make up for that, there’s very little that you can do. You can either charge more or you can accept less to the bottom line,” says Stevenson. Charging more is the trickier proposition: “There’s only so much that people are willing to pay for what you do.”
“I can almost hear my father saying this in my ear: You do not raise prices until you’ve done absolutely every damn thing you can possibly do to avoid the need to do it,” says Brian Maloof, who owns Manuel’s Tavern, the famed Democratic Party stomping ground in Poncey-Highland. Maloof took over the family business in 2006, just two years before the Great Recession—so he thought he’d seen the worst. “I thought we were in real trouble then,” he says. Now, though: “I wish that we were back at that 2008 crisis. That’s how much different this is than what we were dealing with then. And that was scary as hell.”
The tavern, known for large portions of cheap food, relies on a high volume of sales. The pandemic hurt but, as the city reopened, the volume didn’t come back. Meanwhile—as Maloof struggled to trim expenses by, for instance, cutting cable subscriptions and reducing the weekly number of sanitation pickups—costs skyrocketed. Not just for food but for vendors and goods as well: Accounting, dishwasher leases, and the price of CO2 all increased. “I was having these 10 to 20 percent increases,” says Maloof, who was previously accustomed to costs going up by 1 or 2 percent a year. “And so our math formula for I bought it for this, I charge this didn’t work anymore.”
Raising prices wasn’t a decision Maloof took lightly: He shared a heartfelt open letter on the restaurant’s Facebook page explaining the change, and received an outpouring of support—including a sales boost. Although it’s too soon to call it a victory, Maloof remains optimistic. “I can see that the decline has slowed now,” he says.
Another tactic restaurateurs are trying is thinking small, in terms of both menus and physical space. Larger menus require more food on hand, and a greater risk of having to toss out food that does not sell. “We saw a huge shift towards smaller menus,” says Kyle Hight, a hospitality professor at Georgia State University. “That way they could free up some capital to do other things that they needed, and also negate these spoilage issues.” A smaller footprint, meanwhile, means cheaper rent and labor. Nick Melvin opened Poco Loco in Kirkwood in spring 2021, building off a burrito pop-up he’d been running out of his house. At only 700 square feet, the space is just big enough to accommodate Melvin, three other cooks, and one person who works the counter.
It’s forced him to be concise when ordering and preparing food. He knows that he can sell about 2,300 burritos per week, and that most of the provisions—Melvin offers prepared salsas, tortillas, queso, and the like—will sell out by the end of the weekend, too. His staff earns a competitive rate, he says, in addition to shared tips. “What happens is we give them a strong base pay rate, and then their tips will be about 40 percent of their base pay rate on top of that,” says Melvin. “And so I’ve got folks that have been with me that were working two, three jobs—now they only have to work one.”
As successful as Melvin’s model is for him, however, it’s hard for other entrepreneurs to simply copy and paste it. “I mean, real estate is so outrageous now,” Melvin says. That partly explains why, as unique restaurants continue to close, many restaurant-opening announcements feel like déjà vu—whether it’s local restaurant groups opening another location of an established business (Delbar, Superica, et al.), an influx of national chains, or yet another food hall with stalls that already exist elsewhere. Take the Westside Provisions District: A decade ago, it was home to Bacchanalia, Yeah Burger, JCT Kitchen, and a handful of other locally owned businesses. Some remain, to be sure. But as others have closed, they’ve given way to franchises like Jeni’s Splendid Ice Creams and Shake Shack. The kinds of mixed-use spaces that make up a large portion of new development in Atlanta right now tend to favor proven bets, as well as restaurants with bigger footprints—not so much a shoebox-sized indie burrito shop.
For pop-ups and others looking to put down solid roots, it’s an uphill climb—involving, for starters, getting financing and finding a landlord willing to take a chance. Reid Trapani and Sophia Marchese Trapani, the married couple behind the vegan pop-up and catering company Happy Seed, launched their business in 2018 and developed it over the course of the pandemic, all the while working on “pitch decks and branding,” Reid Trapani says, in hopes of landing a permanent space. “Every dollar that we made up until we opened, we reinvested in the company.”
When they finally opened La Semilla in Reynoldstown in January, with the help of SRS Real Estate Partners and Weinstock Realty & Development, they went into it with lessons they’d learned from past jobs; Reid had worked for Fifth Group Restaurants, and Sophia was a publicist and private chef. One early business decision: no lunch. “The full-service dining experience for lunch is, number one, a huge beast in itself. I’ve worked in a lot of places that do numbers during lunch, but it’s very hard to staff that,” says Reid. The meal creates bottlenecks for the kitchen, too, because the turnaround time before dinner is tight.
Survival is also a matter of nimbleness. Deborah VanTrece, who owns Twisted Soul Cookhouse & Pours and Oreatha’s at the Point, closed her Cascade Heights Latin restaurant, Serenidad, in February—after less than six months in business. “The only thing that happened was other restaurants were coming in with the same concept within a one-block area in a community that really doesn’t have a variety of restaurants,” says VanTrece. “I just felt a simple thing to do—instead of us all competing with each other—was to just change up our concept.” She reopened the space in May as an Italian concept called La Panarda.
While it can feel like things are doom and gloom in the restaurant industry—closures! Never-ending price hikes!—Melvin is hopeful. More restaurants are offering health insurance to their employees, and pop-ups, at least, are flourishing. When he told his mother he wanted to be a chef, he recalls, she was encouraging: People need to eat. “We’ll always have restaurants. But we just have to be creative,” he says. “And this is a good thing.”
This article appears in our August 2023 issue.