At The Crossing at Sahuarita, customers are lining up for lunch at the Chipotle Mexican Grill. The restaurant opened in December with an interior styled with exposed wood beams, chrome chairs and stainless steel. Even at 3 p.m. on a recent Monday, business is brisk.
The meal is quick and no-nonsense, with grilled meats, rice, beans, veggies, salsa and guacamole arranged on bowls or tortillas and pushed down an assembly line. Meals run around $10.
“We’re just running errands so we stopped for a nice lunch,” said T.J. Gresham of Green Valley, while she poked a fork at a burrito bowl. Her friend Dorothy McMillan likes "the fast-casual thing" and said she can usually make two meals from a Chipotle order.
“We’re beyond thrilled that they opened,” Gresham said.
Grabbing a quick meal doesn’t mean just fast food these days. “Fast-casual” options borrow ideas from fast-food and chain sit-down restaurants, catering to customers who want food fast that’s inexpensive yet customized.
For developers, fast-casual — Mod Pizza and Panera are examples — is the kind of concept that draws tenants to shopping centers like The Crossing and Rancho Sahuarita Marketplace, with more inviting atmospheres and quality ingredients than found at most fast-food chains. Kababeque Indian Grill, which will open this month at Rancho Sahuarita Marketplace in a space formerly occupied by Mama’s Hawaiian Bar-B-Cue, is another example.
Their success – having grown more quickly than fast-food chains or full-service sit-down restaurants in recent years – is part demographic and part economics.
Despite the excitement over Chipotle, Green Valley and Sahuarita are still looking for sit-down options like Red Robin or Olive Garden. Landing one would put restaurants within reach on all three levels: fast food, fast-casual and sit-down. But here are two reasons not to hold your breath: Over-expansion and heavy competition for hungry customers. The upshot is a commercial real estate landscape where chain restaurant closures have been frequent.
No matter how much some local diners want one, an investor will probably not bankroll a sit-down restaurant if the numbers don’t pencil out. And it’s not for lack of trying on the part of the landlords and their sales teams.
“We’ve heard from numerous citizens that a sit-down, family-style restaurant is dearly needed and greatly wanted,” said Kip Wadsworth, the developer/landlord behind The Crossing at Sahuarita.
“We at WDG very much want the same thing and, in fact, have spent numerous hours marketing this project to sit-down restaurants. We feel this type of user would greatly enhance our center, bring additional customers and create more value for our investors. Unfortunately, as real estate owners, we do not operate any restaurants, we simply develop them.
“We must market and entice restaurateurs to want to invest significant dollars to open at our location. To date, we have not been successful in attracting a full-service, sit-down restaurant.”
Wadsworth said the firm has received numerous requests from residents to open an Olive Garden at this shopping center. Darden Restaurants, the parent company of The Olive Garden, opened only 10 locations of that brand in the last year across the United States and Canada, according to its most recent annual report.
Applebee’s and Chili’s opened even fewer sites than Olive Garden during the same time period, Wadsworth said. In 2018, the number of Applebee's dropped by 90, according to Business Insider. The plan for 2019 was to cut at least another 20 locations.
For fiscal year 2019, Brinker International, Chili's parent company, said in its most recent annual report that it opened four new company-owned Chili’s restaurants and closed 25 Chili’s franchised restaurants.
Not big enough
The second reason Sahuarita is not first on the list for full-service, sit-down restaurants is that, for those few restaurants that are expanding, Sahuarita is viewed as a “non-primary market” and doesn’t meet the demographics they are looking for, since it is a smaller trade market – with about 60,000 people, Wadsworth said.
He said restaurant operators use demographic information to study a location to assist in forecasting their probability of success. They want to know if a new store will generate enough volume to justify the investment.
“As housetops are added to the immediate vicinity and as additional office space and jobs (which create daytime populations for restaurants) get added to the area, this opinion will eventually change, but as of yet, we have not had any takers from expanding restaurateurs,” Wadsworth said.
Calls to site selectors inquiring about what the criteria is in terms of housetops for locating a new restaurant in the area were not returned. The corporate offices of Darden and Brinker International, the parent companies of Olive Garden and Chili's, respectively, also didn't respond to requests for comment.
The financial outlay to build a fast-casual or fast-food outlet in Sahuarita also is less than the larger footprints required of national chain restaurants, said Victor Gonzalez, economic development director for the Town of Sahuarita. The fast-casual operators and fast-food folks also optimize their investments with drive-thru lanes, he said.
An example of a fast food operator coming on line in the new year along Sahuarita Road is an Arby's. Gonzalez envisions more franchise operators following suit as a new hospital also opens in town. Northwest Healthcare's new hospital will employ 200 people. "I think we'll start getting some more interest" as new employers set up shop in town, Gonzalez said.
So what is that critical mass? “The (restaurant) industry knows the consumer better than we do,” Gonzalez said.
What we have
For those preferring a sit-down meal at lunch and dinner, Gonzalez did an asset inventory of local sit-down eateries, the majority of which are owned by independent operators. He mentioned Manuel’s, Arizona Family Restaurant, Pub 1922, Twist and Shout 50s Diner, Dominick’s Green Valley, The Grill at Quail Creek and several restaurants at Desert Diamond Casino, just north of Sahuarita. The recently opened Maria’s at the Continental Shopping Plaza is also a new entrant on the sit-down side.
When customers do sit down to a meal, many prefer local spots. That’s the case with Vicki Bell and Kat Stranlie, both of Green Valley, who were recently enjoying a leisurely lunch at Pub 1922 at Rancho Sahuarita Marketplace. They like to frequent local establishments, including The Firefly in Amado, another sit-down option.
But Bell questions the viability of a chain restaurant opening in Sahuarita or Green Valley given the seasonality of many of its residents.
“It probably wouldn’t be sustainable,” Bell said.