Nashville’s Restaurant Bubble Bursting: Expert

NASHVILLE, TN — Whether it’s a culinary correction or a bursting bubble, there’s data indicating that the restaurant scene in Nashville is at a saturation point.

There are 5,582 restaurants in Davidson County, a 2 percent decrease since 2011, according to figures from The NPD Group. That’s a relatively paltry figure at first blush but it marks the first downturn in five years and a sign the overheated market doesn’t have the bodies – or stomachs – to sustain it.

"There are more restaurants than we got bodies to fill them and until demand equals supply, we’re not going to see much growth in the restaurant industry," said Bonnie Riggs, a restaurant industry analyst NPD told NewsChannel 5.

But restaurants keep opening with 51 open or planning to open in 2018 in downtown alone. On the other side of the coin, Nashville mainstays like Gerst Haus and Provence have closed along with newer entries like Cochon Butcher, Lulu and Holland House.

Margot McCormack, the pioneering chef who opened Cafe Margot and Marche in East Nashville when it was just The Other Side Of The River and not a trendy hotspot profiled in coastal newspapers, told The Tennessean that, unfortunately, the recent closures of old favorites mark a start of a worrying trend.

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"There are many reasons for all the closures, but it in the end it comes down to money," McCormack told the paper. "The underlying issue here is that with all the growth, all the newness outshines or overshadows the old standbys, the places we have come to love and hold dear. So if we don’t frequent these old friends, they too, will go by the way side. Some people call it competition, some call it growth and change, but I just call it sad."

Nashville isn’t alone, though. NPD said that of 210 major markets, only 18 saw restaurant expansion. With labor shortages from low unemployment to rising health care and rent costs, cash flow is a serious concern in the infamously fickle restaurant business.

Bob Bernstein, the man largely responsible for bringing high-end coffee to the city, told The Tennessean that cash-conscious landlords are increasingly unwilling to take chances on independent start-ups over chains, which have bigger marketing budgets and no cash-flow concerns. There was a 5 percent decrease year-over-year in independent restaurants in Nashville at the start of 2017 compared to 2016.

"I had barely any money behind me when I opened my first store, but at the time, there were spaces available and landlords were willing to take a chance on somebody. Now landlords have their choice," Bernstein told the paper. "Anybody who has a lease that expires in the next five years, I would consider them somebody who is in danger of not being here for the long haul."

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