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Restaurant Activity as a Leading Economic Indicator


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On 3/14/2018 at 10:56 AM, DonRocks said:

I'm having the DC Dining Guide completely revamped, from top to bottom, for the first time ever. We've made it down to Shaw, and I was struck by how many restaurants have closed in recent times: Mockingbird Hill, Shaw Bijou, Drift on 7th, Eat the Rich, 1905, Southern Efficiency, Thally, not to mention older closings such as Dickson Wine Bar, Mr. P's Ribs and Fish, Axum, and Table. Yes, there's Convivial, and also three of those closures were essentially one Ruppert/Brown restaurant - still, things don't seem quite as heady as they were just a few years ago. It's largely intuitive, but I'm on this stuff about ten hours a day, and I'm just "sensing" less activity, and that sense was bolstered last night by the reality of the Dining Guide. This is why I voiced my post in the form of a question, rather than a statement. Still, other than Convivial, I don't see any restaurant in Shaw that I would run to; I think Mount Vernon Square (or, West Convention Center - whatever you want to call it) is the most intriguing area in DC right now - granted, that could be considered "Shaw South," but it's also pulling downward from U Street, and eastward from Logan Circle, and arguably includes Convivial. I think the Marriott Marquis might be tugging things a bit to the West: I think Tom Power is something of a Warren Buffett when it comes to DC real estate - I thought he was insane for sinking so much money into that townhouse, but right now he's batting 3-for-3 in real estate ventures.

I try to keep my personal feelings out of things like this, but I'd be lying if I said that in this non-inflationary economy, I didn't think a real estate correction was coming - if it comes, things will retreat towards blue-chip areas, and West Convention Center, supported by the Marriott Marquis, is about as blue chip as it gets right now - investors and restaurateurs know this.

But to answer your question succinctly, I wouldn't have even written this post if the spate of recent Shaw closures wasn't pointed out to me last night, during the Dining Guide update. I haven't been sitting around pondering this.

Plus, it's impossible not to notice the long-term, downward trend in Restaurant Openings (thanks to cheezpowder). The 2013 list didn't even begin until March 1st, and even with that, there has been a five-, going-on six-year downward trend. No, the list isn't "official," but it's as close as you're going to get without scouring city records, and it includes both suburban VA and MD. What she has done has been nothing short of remarkable. One thing I've noticed over thirteen years doing this is that restaurant activity has been a very reliable leading indicator of things to come. For those into technicals (I don't pretend to understand them), we may have hit a double top in 2015 and 2018 - only time will tell.

"Drop in Bar and Restaurant Spending Dampened U.S. Retail Sales in September" by Taylor Telford on washingtonpost.com

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