A Chicago 'Fast Casual' Chain Struggles in California

Portillo’s, a Chicago-based chain of casual eateries, opened its first outlet in southern California three years ago. Last year, it opened another. Bad timing.

At first, things looked good for the new outlet, according to a report in Nation’s Restaurant News. The weekly gross was about $150,000. Now, it’s less than half that, and owner Dick Portillo says he has no plans to open any more outlets there.

The Portillo’s story is the first in what, it appears, will be a pretty decent series in the trade magazine on how restaurants in various parts of the country are being hurt by the sagging economy.

When the new Portillo’s – sort of a souped-up fast-food joint – started doing well, Portillo laid plans for more, concentrating on the Inland Empire, a vast and (at the time at least) still fast-growing suburban area east of Los Angeles.

As NRN’s Lisa Jennings writes:

New retail centers were popping up throughout the area. Miles of open space dotted with new housing developments promised steady population growth. Economists were predicting waves of business migration from the higher-rent coastal cities, and the big-player restaurant chains were vying for top locations.

Of course, everything changed almost immediately, and, as in most places, restaurants were hit especially hard. Though the new unit is still pulling in about $70,000 a week, Portillo’s outlets record sales of between $7 million and $8 million a year.

California has been hit especially hard by the real-estate implosion, so it might be quite a while before Portillo’s resurrects his plans for expansion.

(Nation’s Restaurant News requires registration to read its articles.)