Economist argues best restaurants often in “dumpier locales”

Over at the Atlantic, George Mason University economist Tyler Cowen explains why excellent restaurants consistently appear in the “cultural wasteland” of suburbs:

Low-rent restaurants can experiment at relatively low risk. If a food idea does not work out, the proprietor is not left with an expensive lease. As a result, a strip-mall restaurant is more likely to try daring ideas than is a restaurant in, say, a large shopping mall. The people with the best, most creative, most innovative cooking ideas are not always the people with the most money. Many of them end up in dumpier locales, where they gradually improve real-estate values…..

I love exploring the suburbs for first-rate ethnic food. Many people consider suburbs a cultural wasteland, but I am very happy searching for food in Orange County, California; the area near San Jose; Northern Virginia, near D.C.; Somerville, Massachusetts; and so on….It is especially common to see good ethnic restaurants grouped with mid-level or junky retail outlets. When it comes to a restaurant run by immigrants, look around at the street scene. Do you see something ugly? Poor construction? Broken plastic signage? A five-and-dime store? Maybe an abandoned car? If so, crack a quiet smile, walk through the door, and order. Welcome to the glamorous world of good food.

Cowen’s argument about restaurants reminds me of another Atlantic piece celebrating “low road” buildings which Brian previously discussed.  It’s not surprising that great work–and great food–often happens in low rent locales like “junky” suburban strip malls and office parks given their lower (financial) barriers to entry and lower operating expenses that free up more cash to flow each month into improving their tenants’ business.

Still, it strikes me that the financial health of restaurants is more location-dependent than for many of the business populating “low road” office parks.  Whereas many office-based business are not dependent on high volumes of foot traffic for survival, restaurants almost invariably are.  (Unless, of course, that particular restaurant focuses primarily on a delivery and/or catering business model.)  A less prestigious restaurant location is a good value for the owner (and likely to survive long term) only if the drop-off in foot traffic/customers due to the “bad” location is more than outweighed by lower rent.

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