LEXINGTON, Ky. (LEX 18) — Several beloved Lexington restaurants have closed in recent months, and local business leaders say rising costs, changing consumer behavior, and out-of-state developers are making it harder for eateries to survive.
The closures include Tolly Ho and Zim's Cafe in December, The Goose and Dingbat's Pizza on Jefferson Street, and most recently Joella's Hot Chicken and Big City Pizza in Hamburg.
According to the Consumer Price Index, food away from home is up 4% from January 2025 to January 2026, squeezing both restaurant-goers and owners.
Downtown Lexington Partnership Executive Director Allen McDaniel said the pressures extend well beyond rising menu prices.
"Restaurants now, not just downtown, but all over, are facing a lot of tighter margins, changes in customer behavior, people are drinking less," McDaniel said.
Bites of the Bluegrass Founder and Tour Guide Erin Goins added that the financial strain traces back further than recent economic trends.
"Even restaurants outside of the downtown space because they're carrying these burdens from COVID times. They have insurmountable debt, labor issues, people unwilling to work, and labor costing more than ever before," said Goins.
Goins says rising rent driven by out-of-state developers is compounding the problem.
"So many different developers are coming in, a lot of people without any kind of local footing, they're buying up lots -- it's literally happening in two areas downtown right now. And then these lots are sitting with these buildings with these incredible rent prices," Goins said.
Goins said she wants to see local leaders take a more active role in protecting businesses.
"Im concerned that if our leaders aren't looking for ways to take some of these obstacles away from local businesses and create new pathways, that we're going to be in a situation again where we're going to have a lot of empty buildings," Goins said.
She also raised concerns about the timing, with Lexington set to host high-profile events in the coming months.
"We're hosting important events like the Breeder's Cup in October. And if we're not careful there will be nothing down there for people to do," Goins said.
McDaniel said the most immediate thing residents can do is show up.
"I think all of us, as much as we can, go out, have dinner at a restaurant, as much as is possible. I know I love to eat out and love to go out after a day at work, and so I try to do that and patronize our local establishments. We have so many," McDaniel said.
