Business-friendly Carolinas 'smoking' with new business

Nation's Restaurant News, August 28, 1995

When it comes to business-friendly environments, it's hard to beat the strides that have been made to foster growth in the states of North and South Carolina.

Both have come a long way since they were primarily linked with the business of growing tobacco. Today, new corporations, new residents and first-time tourists are discovering for themselves the quiet allure of the Carolinas - and all that activity translates into big dollars for the restaurant industry.

For 1993-94, commercial foodservice sales in North Carolina are expected to tally up to a whopping $6.3 billion, according to T. Jerry Williams, Executive Vice President and Lobbyist for the North Carolina Restaurant Association. In the National Restaurant Association's 1995 regional forecast, North Carolina tops the growth list for eating-place sales in the South Atlantic, with a healthy 6.5 percent. Nearby South Carolina doesn't trail by much, coming in with a growth factor of 5.4 percent.

"The Carolinas are very receptive from a tax base and wage rate perspective," says James Adamson, Chairman and Chief Executive of Spartanburg, S.C.-based Flagstar Corp. "The states are overly accepting of new business. Many more companies are looking at building and developing there because of the strong incentives. The Carolinas are a terrific place to do business."

Many say that the two states' commitments to economic development start at the top - with government officials who often act as economic developers.

Some of the hottest spots for development include Raleigh/Durham, N.C.; Charlotte, N.C.; Winston Salem, N.C.; Wilmington, N.C.; Charleston, S.C.; Greenville and Spartanburg, S.C.; Hilton Head, S.C.; and Myrtle Beach, S.C.

Tom Sponseller, Executive Vice President of the South Carolina Restaurant Association, points to Myrtle Beach, S.C., as the fastest-growing area in both Carolinas."

"The growth down there is truly unbelievable. Every time I go there, which is every two or three weeks, there are four or five new restaurants under construction," Sponseller explains.

"There are now 97 golf courses, and it's the Branson [Mo.] of the East Coast," he says, referring to the onslaught of musical theaters that are opening.

Many chain operators - such as the Hard Rock Cafe, Landry Seafood Restaurant and Tony Roma's - also are making their way to the tourist town. This "gold rush" for the restaurant industry has left the labor market drained in many key areas of Carolina development.

"We had to have one of our members [in Myrtle Beach] wait four weeks to open because he couldn't get enough kitchen help," Sponseller says.

Larry Tate, Vice President of Franchising for Raleigh, N.C.-based Golden Corral Corp., concurs. "It is a very tight labor market indeed," he remarks. "The unemployment rate has been in the 3 - or 4 - percent range for a number of years now."

One way to combat a tight labor market is to try and keep down the turnover rate, or as Rick Eldridge, vice president of human resources for the Ruby Tuesday Group, puts it, "make the rate of retention increase."

"We have a lot of managers in the Carolinas that have been doing very well in retaining their people," Eldridge says.

Help is also on the way via a new initiative from the North Carolina Restaurant Association to hire individuals currently on welfare.

Each member of the board of the association signed a letter committing himself or herself to work with key state and local officials to identify, hire and train qualified people receiving public assistance. It is estimated that as many as 35,000 people could be put to work as a result of the program.

"The restaurants of this state are fully committed to providing the jobs, training and, most important, opportunity, for people to get off welfare and go to work. I know this for a fact, because I grew up in Montana and for some time my family was on AFDC," says Dennis Quaintance, President of Quaintance-Weaver Inc., operator of Lucky 32 Restaurants and board member of the state association.

"It was the restaurant industry which helped me get grounded in life and gave me the skills and inspiration to reach for the American Dream."

The NCRA's Jerry Williams says that despite the work involved, the program should prove to be a boost for the restaurant industry. "A lot of my members are very excited about this," he explains. "The labor market is so tight that we need to do this, but we've got a lot of work ahead of us."

South Carolina likewise is trying to get people connected with jobs. Stock quotes, weather reports and employment opportunities are among dozens of information services available on South Carolina state government's first big venture onto the Internet.

The program started in June, when the South Carolina Public Information Home Page appeared on the World Wide Web, the graphical interface on the Internet.

On the North Carolina Job Service Home Page, users can customize a job search to regions of the state, cities, job categories and several other criteria.

And as restaurateurs in South Carolina enter the world of high tech, they also are awaiting word from the State Supreme Court concerning a meal tax case that was heard almost 50 weeks ago.