Weekly Wrap April 21: Tiny Wine Bars, Food Illness Alerts, and More
The most important hospitality industry news right now
Dave Foss
April 21, 2025
In this Weekly Wrap, we’re looking at D.C. closures, America’s biggest restaurant chain, the value of strong branding, and more.
D.C. Restaurant Closures
The Headline: “‘It’s just not sustainable’: D.C. restaurants pushed to the brink”
The Source: Washington Post
What You Need to Know:
Brookland’s Finest is one of dozens of D.C. restaurants expected to close this year, each with a different set of circumstances leading to its demise. Some factors — inflation, rising rents, crime, pandemic-related debt — are not limited to Washington. But some are: the thousands of government workers who find themselves in unemployment lines, their discretionary income for dining suddenly zeroed out.
Voters approved a ballot initiative in 2022 to phase out the lower minimum wage for tipped workers by 2027. That decision has become Public Enemy No. 1 for many restaurateurs. The stair-step increases in the tipped minimum wage have added hundreds of thousands of dollars to a restaurant’s payroll costs, operators say, leading to widespread (and widely unpopular) service charges while cutting into already thin profit margins.
Initiative 82 has become such an albatross to owners that the Restaurant Association Metropolitan Washington has launched a campaign to repeal it, as first reported by Axios. No legislation has yet been introduced by the D.C. Council to roll back the initiative, but council member Anita Bonds (D-At Large) has been listening to people on both sides of I-82, sympathetic to the economic problems facing workers and employers alike.
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To cover the increased costs, restaurateurs have relied on a combination of strategies: raising menu prices, cutting staff, swallowing the costs or adding a service charge to checks. The latter strategy has become divisive as diners find themselves confused and angry about fees that add 20 percent or more to bills.
Our Take:
This article is pretty depressing. Businesses will be lost. And while the recent changes to labor laws regarding tipped employees are a factor, they’re far from the only one. The broader environment in D.C. — specifically the cuts being made across nearly every level and agency of the federal government — is fueling a wave of uncertainty and slowing consumer spending. And, of course, the ongoing tariffs are big F.U. to every restaurant's COGS.
Unfortunately, this isn’t isolated to D.C. Seattle is experiencing restaurant closures at an alarming rate. Los Angeles is seeing a similar exodus and a steep drop in restaurateur confidence. It’s something happening across the U.S., and unfortunately places without a tip credit seem to have a higher rate of attrition. From consumer confidence dips and inflation to natural disasters like wildfires in California and deep federal budget cuts, a number of pressures are converging all at once.
That said, we've spoken to operators across the country who are holding on — and even thriving — in the face of adversity. What many of them have in common is a sharp focus on either (or both) of two things: value-driven menus that bring people in the door, or an alternative service model — like counter service — paired with higher quality ingredients and elevated food. It’s not easy, but it’s not impossible either.
Texas Roadhouse Moves to the Head of the Pack
The Headline: “Iconic Southern-based steakhouse is now America’s biggest restaurant chain”
The Source: AL.com
What You Need to Know:
Texas Roadhouse is now the biggest casual restaurant chain in the United States.
The rapidly growing steakhouse chain has unseated Olive Garden as the largest restaurant chain in the nation according to newly released data from the Technomic Top 500 Chain Restaurant Report.
Technomic, a food service industry research company, reports Texas Roadhouse’s sales in America increased 14.7% in 2024, to $5.5 billion. The chain also opened 26 new locations.
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Another reason Texas Roadhouse unseated Olive Garden: the steakhouse is making more money with fewer locations. The Daily Meal reports Texas Roadhouse has 664 total locations, while Olive Garden has around 900 restaurants worldwide.
Our Take:
All restaurants, big and small, should be paying close attention to what Texas Roadhouse is doing right. It’s not just the brand’s food, service, and operational consistency that have driven it to become the largest casual dining chain in the country. It’s also the company’s management structure and value proposition that keep it growing and consistently profitable.
A key part of their success lies in the model of offering ownership shares and performance-based incentives to select members of management. One of the perennial challenges in the restaurant industry is getting managers and staff to feel truly vested in the business — to treat it with the care and urgency of something they own, not just something they oversee. Texas Roadhouse has cracked that code.
The article doesn’t discuss these aspects, but for us there is a takeaway. Incentivized management — a tangible buy-in — helps ensure all those operational pillars (food, service, consistency) don’t just happen by accident. They’re reinforced from the top down. Not every operator can offer this level of partnership, but more probably should.
Tiny Wine Bars
The Headline: “The Allure Of The Tiny Wine Bar”
The Source: Forbes
What You Need to Know:
In a city crowded with noise, space and spectacle, the rise of the tiny wine bar signals a quieter kind of hospitality.
Often no larger than a studio apartment, these small-scale venues are cropping up in major cities across the U.S., modeled on the informal intimacy of European drinking establishments. Venues are under 500 square feet, appealing to a slower, more attentive audience—with wine, with food, and with strangers. They serve fewer people at a time, often with fewer items on the menu. But in their constraints, they find clarity.
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Though overall wine consumption in the United States has slowed in recent years, the growth of small-format wine bars suggests a shift in how people engage with drinking culture. The U.S. wine bar industry was worth $3.1 billion in 2024, according to IBISWorld, despite a projected 3.0% decline in revenue that year. Yet certain corners of the industry continue to expand. A 2025 report from Wine Enthusiastfound that the top quartile of wineries saw revenue increases averaging 22%, even as the overall category shrank by 3.4%. In some cities, the tiny wine bar model is driving that growth. In the Bay Area alone, 16 new wine bars opened in the past year, many emphasizing curated selections, stripped-down food menus and lower overhead—a business model that has proved sustainable and appealing to a clientele seeking smaller, more deliberate experiences.
Our Take:
I love small bars. Cocktail bars, wine bars, dive bars, tapas bars — I absolutely love them. They’re fun, intimate, and many are owner-operated. Oftentimes you will find the owners are working the floor or running the small but succinct kitchen. Obviously there are many exceptions to this, but many are run this way.
Why is this important? Often when an owner is working on the floor or in the establishment, the place runs how the owner wants it to (for better or worse), and the staff is more aware and attuned to their service and hospitality. If the owner is a true owner-operator, chances are they may not have a GM as they are the acting GM. Along with the smaller space, this usually means a need for a smaller staff.
The simplicity of menus generally found in these smaller concepts also allows for greater efficiencies and, in turn, lower COGS. Combined with the lower labor comes a higher net revenue.
What the article doesn't touch on is that, while these spaces’ net revenue as a percentage can be much higher than a traditional space, the gross revenue is generally drastically lower. There is only so much revenue that can be done in a space that only seats 20-30.
I will always seek out and promote small bars. They are intimate and special, and every guest needs and deserves extra attention. Which is why it’s important that these spaces have active (and competent) owners.
FDA and Food Illness Alerts
The Headline: “You Might Not Even Hear About the Next Foodborne Illness Outbreak”
The Source: Eater
What You Need to Know:
An investigation by NBC News uncovered an FDA report from November 2024, when people started coming down with serious illnesses after consuming lettuce that was contaminated with E. coli bacteria. Instead of telling the public about this outbreak, which sickened 88 people and killed one, the FDA simply — and quietly — closed the investigation without providing any further information to the public. It did not name the lettuce producer involved in the outbreak, stores where the contaminated lettuce was sold, or how many consumers might have purchased the E. coli-infested produce.
As NBC notes, the FDA is not obligated by law to disclose these outbreaks, and the agency told NBC that it did not inform the public because there was no more infected lettuce for sale by the time it discovered the cause of the outbreak. I guess we’ll just have to take their word for it. Because the agency didn’t publish its findings, it’s impossible to know if there was actually a thorough investigation. And now that the FDA is making plans to end its routine inspections of most domestic food products and laying off communications staffers, this shift away from transparency feels even scarier.
Our Take:
The most alarming part is that this started with the prior administration, in which, theoretically, the FDA was fully funded. Given the current administration's dramatic cutback to federal agencies and oversight, we can expect even less transparency from the FDA.
Based on some rumored budget proposals, the FDA would shift responsibility of routine food facility inspections entirely to the states (many states already assume some inspection duties). This could put even further stress on state budgets unless the Feds contribute funds to support the states fully.
While the current situation is not great, it could still get worse if oversight is left to the states. Even now, there isn't staffing or funding to investigate all purported outbreaks, minor or otherwise, and that isn't likely to change anytime soon.
Restaurant Design
The Headline: “Is the Restaurant Good? Or Does It Just Look Good?”
The Source: NY Times
What You Need to Know:
A decade ago, the country’s most buzzed-about restaurants were largely defined by the ambition of the food and the credentials of the chef. Now, they’re all about atmosphere and appearance. For many diners who grew up in the visuals-obsessed Instagram era, a restaurant doesn’t need to have a particular aesthetic — it just needs to have a memorable one.
What might that look like? “Fun, stylish, and full of energy, with great drinks, good enough food and an atmosphere they can’t replicate at home,” said Anna Polonsky, the founder of the Brooklyn design studio Polonsky and Friends.
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Wholesale branding was once the domain of large restaurant groups with six- to seven-figure design budgets. Now, any restaurant can create a logo and custom merchandise thanks to online tools like Canva, said Jeff Chanchaleune, the chef and owner of the Lao noodle shop Bar Sen in Oklahoma City. He spent just $12,000 on branding for Bar Sen — about 5 percent of his total budget — and started selling hats and T-shirts before he had even finalized the restaurant’s menu.
“The way the space makes them feel,” he said, referring to customers, “might just make the food taste better.”
The cost of dining out is also steadily rising, said Hillary Dixler Canavan, the former restaurant editor of Eater. Customers want more than a meal when they’re at a restaurant — they want the theatrics. “Once you are spending a lot of money,” she said, you “expect the experience to rise with the bill.”
And as restaurants go ambitious with interior design and branding, many of them are betting that today’s customers prefer well-worn dishes with mass appeal. “They are serving basically what everyone else is serving: It is a steakhouse, it is a red sauce joint, it is a pizzeria,” Ms. Dixler Canavan said. “But look at the cool branding. The identity is wrapped up in what it looks like rather than what it is actually doing.”
Our Take:
The quality of food and drink isn’t always the driving force behind a brand’s success — but it never really has been. Sure, there are places known for their food. More often than not, those same places also have solid design and branding. That matters. If I’m going to spend real money, I want to see that thought went into not just the food, drinks, and service, but into how the place feels.
A restaurant or bar with great food and drinks but a dismal vibe — bad lighting, poor music selections — is probably not going to thrive. But a place with killer design, lighting, branding, and a well-curated playlist? It doesn’t have to have great food or drinks to pack the room. That’s been the case for a long time. I never went to Studio 54, but let’s be real, I doubt the cocktails were great. People didn’t go there for the drinks — they went for the party, the celebs, the vibe.
Same thing in the mid-aughts with places like Asia de Cuba in West Hollywood and NYC. Those spots were insanely busy. The food? Meh. The cocktails? Sweet, cheesy, typical of the time. But the place looked fantastic, from the decor to the uniforms. It was — I’m going to say it again — a vibe.
And that’s the key word: vibe. The food at Catch in Las Vegas? It’s... fine. But the vibe? That 80-foot pergola you walk through to get in? Say what you will, but it makes a statement. That’s an Instagram moment. And that’s what people are paying for.
There are plenty of places that I go to not because of the food, but because I have a friend in town and there is a cool place that they’ve seen on Instagram or TikTok that they want to check out.
The difference between the late ’70s/’80s, the early aughts, and now is that today, it’s much easier — and cheaper — to come up with cool branding. You can spend hundreds of thousands on branding and design, and people still do. But thanks to today’s tools and tech, creating a strong visual identity is within reach for just about any operator, whether you’ve got $150,000 to throw at it or $5,000.