Northwest Arkansas restaurant sector draws more national chains

A growing economy and population continues to draw Smashburger and other new restaurants to Northwest Arkansas.

Real estate veteran David Erstine with CBRE in Fayetteville has said the region surpassing the 500,000 population threshold would be a green light for more national chains. That theory is proving true. Several new restaurants have filed for permits with the Arkansas Health Department since Dec. 1. The new eateries range from national chains to local expansions.

There are five new venues on tap in Benton County including Denver-based Smashburger, that has scoped out 500 S.E. Walton Blvd. in the Fountain Plaza shopping center as its first location in the Natural State outside of Texarkana. The closest Smashburger to Northwest Arkansas are the three locations in Tulsa. 

The health department approved the Smashburger site in Bentonville on Jan. 15, according to the state’s website. The new Smashburger is set to open in April and will bring between 30 and 40 new jobs (full-time and part-time) to Bentonville.

Corporate spokeswoman Christine Ferris told The City Wire the restaurant franchisee has former experience with Popeye's Chicken. She could not say for certain if Bentonville would be only location in Northwest Arkansas, noting that the normal number of venues for new franchisees is three. 

"We're at excited to bring Smashburger to Bentonville and the restaurant will feature a Razorback burger specifically for this location," Ferris said.

Crepes Paulette has filed for a restaurant permit at 401 S.W. A. St., in downtown Bentonville in addition to its popular food truck stand. Owner Paula Jo Chitty Henry will occupy one of the commercial spaces at ERC’s Thrive Bentonville multifamily complexes with the Crepes Paulette sit down eatery.

“Bentonville is rapidly becoming a very special thing: a cosmopolitan small town. That unique mix creates an environment where new ideas are appreciated and word travels quickly,” Henry noted on the Thrive website. “Thanks to that and a lot of hard work, we’ve been able to run with our concept and grow a vocal clientele that consequently also helps us attract the visitors that come to the area for all of its attractions.”

Kalene Griffith, executive director of the Bentonville Visitors and Convention Bureau, recently told The City Wire that there are several more eateries eyeing Bentonville for locations.

Barry Furuseth is set to open Fresh Seafood Market in mid-February, which will be a lunch and early dinner venue featuring seafood and fish flown in from Seattle and Northeastern ports daily. The venue will also be a wholesale and retail market. A full-service restaurant is planned for later this year. The location of the market is 607 S. E. Fifth St. near downtown Bentonville.

NEW FOOD IN ROGERS AND FAYETTEVILLE
In Rogers, Pei Wei Fresh Kitchen is under construction at 4895 W. Pauline Whitaker Parkway near the Walmart AMP. It’s expected to open this summer. Scotsdale, Ariz.,-based Pei Wei has one other location in Arkansas at 205 N. University Ave. in Little Rock. The Asian-inspired eatery operates more than 250 locations across the country.

In western Rogers, Papa Murphy’s Pizza has opened shop at 2600 W. Pleasant Crossing Drive in the new Pleasant Crossing Shoppes. This new 22,000 square-foot shopping center sits adjacent to the Walmart Supercenter on Pleasant Grove Road. 

Moe’s Southwest Grill has also reportedly leased space in the shopping center.  This Tex-Mex eatery filed its paperwork with state health department in October and provisional approval was given Oct. 9. The restaurant is set to open later this spring. 

Operators of Tacos F Life Grill filed paperwork on Jan. 16 for food service permits for a restaurant at 1572 North College Ave., in Fayetteville. The Conway-based restaurant sells ala carte Tex-Mex and the proposed Fayetteville location is near the Veterans Administration Hospital on College Avenue.

Raising Cane’s Chicken Fingers has staked out a location at 3561 N. College Ave. in Fayetteville in the shopping complex that will also house Whole Foods. The Baton Rouge-based chicken chain is a no-frills eatery that serves meals in a box with traditional sides of fries and coleslaw. The permit filed with health department on Dec. 5 is an indication the restaurant opening is likely slated for late spring or early summer. 

RESTAURANT ECONOMICS
Northwest Arkansas restaurant growth is showing up in metro job reports. Employment in the region’s tourism industry was 22,400 during November, down from 22,600 in October but ahead of the 21,400 in November 2013, according to December data from the U.S. Bureau of Labor Statistics. Sector employment reached a record of 22,800 in September. Employment in the regional sector is up 49.3% compared to the 15,000 employed in November 2004.

National Restaurant News reports same-store sales among the broad sector (some 20,000 restaurants) rose to 3.1% in December. Traffic was about 0.5% in December. Another survey, the MillerPulse results, indicate comp sales rose 4.1% while traffic came up 2%. MillerPulse data are based on a monthly operator survey averaging more than $40 billion in restaurant industry sales from all regions of the country that represent the fast food, casual-dining, fine-dining and fast-casual segments.

Mark Kalinowski, an analyst at Janney Capital Markets, said in a Jan. 20 note that his sources talk of “meaningful, measureable increases in U.S. chain restaurant same-store sales trends.” He said the MillerPulse survey just reported the best December sales number in eight years and job growth is a big reason for sales improvement in the sector in recent months.

Industry insiders say the economic indicator that follows restaurant sales most closely disposable income and not jobs. Because restaurants are impulsive in nature, they are frequently among the first businesses to benefit when consumers get extra cash – and among the first to get cut when that cash is constrained. The average two-car family is saving roughly $100 per month on gasoline purchases. Every penny by which gas prices fall adds $1 billion to consumer disposable income. Gas prices have declined by 45% since mid-October which in turn funneled an estimated $137 billion into consumer wallets.