Every month the State Comptroller's Office publishes the amount of money bars and restaurants pay in Mixed Beverage Gross Receipts taxes. Known colloquially as the "TABC report" after the Texas Alcoholic Beverage Commission, it might be the best kept non-secret in the Houston restaurant industry. Every month owners, chefs and industry insiders peruse the numbers to get a glimpse at the state of the competition.
Who's up? Who's down? Who's in danger of closing due to declining revenue?
We decided to take our own look by pulling the most recent TABC report available online. Sorting by city, we combined the results for Houston and its suburbs (The Woodlands, Sugar Land, Webster, Katy, etc) to generate a list of more than 3,600 bars and restaurants that reported their sales to the state. The results may surprise readers who correlate press coverage with profits, but Houstonians aren't always chasing the new thing or the biggest names.
The numbers don't factor in food sales, obviously, or paint a picture of the costs associated with rent, labor and insurance. They also don't provide any information about restaurants with beer and wine licenses — a group that includes hot spots like Oxheart, Underbelly and Uchi. Still, examining the numbers can reveal a few hidden truths about where Houstonians are spending their money.
1. Downtown bars may get all the press, but Midtown bars sell much more liquor.
Between December 2012 and December 2013, eight new bars and bar-forward restaurants opened along Main Street and near Market Square: The Original OKRA Charity Saloon, Clutch City Squire, Goro & Gun, Batanga, Captain Foxheart's Bad News Bar & Spirit Lodge, The Pastry War, Little Dipper and El Big Bad. They've been credited in this publication and others for sparking a revival of downtown Houston as an eating and drinking destination, with both statewide and national press.
Collectively, they paid $34,398.84 in taxes in April, which represents $513,415.52 in sales at the 6.7 percent tax rate on Mixed Beverages.
While that's an impressive sum and downtown is certainly more fun than it used to be, the numbers pale in comparison to Midtown, where The Dogwood alone paid $30,664.96, which is 89 percent of the combined sales of the eight downtown bars. By adding in Celtic Gardens, Little Woodrow's, Pub Fiction, The Gaslamp and 3rd Floor, the number skyrockets to $136,316.70, almost four times as much revenue despite two fewer locations.
Dismiss them as low-concept party spots if you want, but they're successful businesses that earn money for their owners.
2. Washington Avenue is declining.
Midtown may be booming, but Washington Ave has taken a huge hit in the past year. For example, Hughes Hangar paid more than $55,000 in taxes per June 2013 (at the old rate of 14 percent) but only about $15,400 in the recent report (at the new rate of 6.7 percent). That represents almost $140,000 in lost sales revenue. Similarly, Kung Fu Saloon's sales are down about $135,000 between the two reporting periods.
Midtown may be booming, but Washington Ave has taken a huge hit in the past year.
The change is affecting restaurants, too. Coppa Ristorante's mixed beverage sales are off by more $40,000. No wonder so many bars have closed along Washington in the last year.
Note that this trend hasn't stopped people from wanting to open businesses in the area. Facebook reveals page for The Glass House, a new nightclub from the The Kirby Group (owners of the now-shuttered "funeral bars") that's set to take over the former Roosevelt Lounge space starting this weekend. Also, Dallas bar Concrete Cowboy will take over the former Chopping Block space next to Kung Fu in the near future.
3. Twin Peaks is booming
The recently opened Twin Peaks on the Katy Freeway may have upset neighbors with its proximity to schools, but people are flocking to it. The location reported the 23rd-highest amount of taxes paid, at just over $20,000. That means it sold approximately $300,000 worth of alcohol in a month. The Kirby and Gulf Freeway locations are almost as popular, ranking 33rd and 50th respectively. Add in The Woodlands Twins Peaks (58th) and the Northwest Freeway outpost (73rd), and the total for the five breastaurants exceeds $1.2 million.
Strangely, this prosperity doesn't seem to extend to other breastaurants. The highest generating Hooters is only 363rd, at just under $100,000 in sales. Hooters on Kirby, which remodeled to better compete with the nearby Twin Peaks, clocks in at 701, at just above $60,000. The highest selling non-Twin Peaks seems to be the Bombshells on NASA Rd 1 at 223 with $122,000-plus in sales.
4. Steakhouses and Tex-Mex are still really popular
Over the last five years or so, Houston has shifted its national reputation away from being a city known primarily for steakhouses and Tex-Mex thanks to high profile restaurants that emphasize local ingredients, a blending of Houston ethnic cuisines and a new generation of chefs. Yet, TABC numbers reveal that this city still loves steak and Tex-Mex.
In its first full month of operations at the new location, the Mexican restaurant reported more than $166,000 in sales. That's a lot of perfect margaritas.
Pappas Bros., Vic & Anthony's and Del Frisco's Double Eagle Steakhouse all make the Top 20 in sales — with more than $1.15 million combined. Brenner's on the Bayou, Truluck's, Taste of Texas, Del Frisco's Grille and Eddie V's all claim spots in the Top 100. Although it's only open 26 hours per week, Killen's Steakhouse manages over $150,000 in sales, which puts it just ahead of both The Palm and Ruth's Chris in the Top 150.
As for Tex-Mex, the El Tiempo on Washington is tops at 77 ($196,000), followed by Ninfa's on Navigation at 92 ($184,000). The three other El Tiempo locations all report more than $100,000 each in monthly sales, and the 12 Pappasito's locations report more than $1.27 million in combined sales.
Fajitas and margaritas are a Houston tradition that apparently shows no signs of slowing down.
5. The future of Kirby?
In the article about Brio closing its location on Kirby, an industry insider used the TABC reports to predict another restaurant would follow soon. That restaurant might appear to be Trenza, which reported only $9,100 in alcohol sales. Additionally, Haven's clearly experienced a dip. The restaurant reported sales of approximately $51,000 in April, compared to more than $94,000 in May 2013.
As noted above, Eddie V's and Del Frisco's Grille continue to dominate West Ave.
Pico's has also made a strong debut. In its first full month of operations at the new Kirby location, the Mexican restaurant reported more than $166,000 in sales. That's a lot of perfect margaritas.