With the closing of yet another restaurant/bar in the River Market the talk of Little Rock this week seems to be the failing entertainment area. Is the area really collapsing or is there more going on?
As many of you know, over the past couple of years I’ve shifted a significant portion of my energy to commercial real estate, especially in the restaurant industry, so this is a topic close to my heart. We have slowed down writing here at Rock City Eats (with a plan to bring it back soon), but this topic needs to be discussed.
So the big question, is the entire River Market district collapsing? In short, no, but like everything that is a complicated answer. I think there are three factors driving closures in the market and a clear path forward for anyone wanting to stake claim.
The biggest factor I see in the River Market is a change in who is actually visiting the market and the lack of alignment from the businesses that have closed. Two of the businesses that have closed this year (Library and Cannibal and Craft) are concepts developed out of college towns. The Library tried to replicate the vibe of a similar business in Oxford. It was cute and catchy for kids at Ole Miss to joke about going to study at the Library, when really they were going to drink at a bar and listen to music. Cannibal and Craft was a direct expansion of the Dickson Street Fayetteville location.
The big problem is that the River Market is simply not packed with 21 year olds who are looking to go out and party. Sure, there are a few, but not enough to keep the businesses going. Neither shifted to match the people who were actually there, which swings more mature in the 25-40 demo. Add to that Cannibal and Craft’s strange desire to charge cover charges even when the bar was completely empty, the bizarre dress code incident, and a number of allegations about questionable activity going on, and it couldn’t keep up with a population group that desired something better.
Lack of Quality
Along with the failure to meet the demographics that exists, they also failed to provide a quality experience that matched the price points needed to support the lease prices in the Market. Both of those places in particular struggled to provide consistent quality with their food and drinks. Sure both had a bright spot or two, but they kept with their college town menus: Alcohol was more about consuming a lot of it than any sort of sophisticated tastes, food was about meeting the requirements to run a bar and little more. Both started off with promise, but that quickly fell apart.
Lack of Local Support
Finally, I’d dare say that none of the nighttime establishments on Clinton Ave put out a ton of effort to attract locals down to the market lately. Talking with dozens of locals about when the last time they went into the River Market at night, I had a hard time finding anyone that went down for a non-business related reason. Even folks living in the River Market (Block 2 or some of the condo towers) say they rarely venture over.
That model is not too dissimilar to any other tourist tourism district in other cities, the effort is always spent trying to capture people coming out of town into the area. The problem is travel to LR has dropped dramatically since COVID. It is just hard truth that Little Rock is not the large regional tourism draw. We lose out to Dallas, Memphis, and even Northwest that have all carefully curated their tourism offerings to provide unique experiences where LR has focused their energy on bringing in second tier, mass chain entertainment offerings (see Top Golf) that you can get anywhere else across the country. Business travel makes up a big portion of our tourism, the rest is made up from 100 mile radius and southern Arkansas. Without a backbone of local support it becomes really difficult when a big portion of that travel goes away as is the case with business travel.
Can the River Market Recover?
Absolutely. I’ve walked three different businesses through the former Library spot and spent time helping all of those build out business models for what utilizing that spot would look like. The revenue potential is there, and if done right I’d dare say it is still better than nearly any place in town. Here are the keys I see to having a successful business in the River Market in 2023.
Build Local Support
Local support is critical for success in 2023. There are prime examples of it working in the River Market, notice I said nighttime business before. It is easy to look at both Nexus and At the Corner and see that marketing to locals can lead to success. Both businesses are doing well and are made up mostly of locals during the day. Locals will never make up an entire customer base in the market, but it can be a revenue base that covers all the bills and you let the tourism and nighttime business be the profit center.
Build Unique Offerings
When I am looking at an area for clients, I am looking at gaps in an area, and there are a number in the River Market. There is a big wide price point to hit between the fried food of Gus’ and Flying fish, and the high end prices of Cache and Sonny Williams. A mature, $25-30 entree price point with (for the love of God) good cocktails would do well. If you can find some way to get away from the Americana food that dominates, even better. It absolutely does not need to be a large chain, it needs to be something as close to being unique to Little Rock as humanly possible to give people a reason to want to go.
Build Diverse Revenue
The #1 thing I try to teach every restaurant I work with is to find ways to diversify the revenue stream. You have to make money beyond a sit down customer. Catering and event space rental is almost non-existent from the non-hotel restaurants in the market. There is an opportunity here.
There are some factors outside of the restaurant’s control like the 30 crossing changes and the perception of crime in the area, but those should all resolve itself before long. The River Market in the current form is going on 25+ years and it is likely time for a change in what the businesses in the River Market look like and who they try to pull in as customers. I believe it is a golden opportunity for the right restaurant concept to come in now and become a flagship location.
(If you want to talk about that restaurant concept, please shoot me a message. I can help you develop a model and get you into any of these locations.)