News Summary
East Tennessee, particularly Knoxville, is facing a wave of business closures, jeopardizing the local economy and community resilience. Various establishments, including restaurants, theaters, and retail stores, have recently shut down due to rising operational costs and profitability challenges. Notable closures include Long’s Drugstore, Halls Cinema 7, and several restaurants, reflecting broader economic issues that local businesses are grappling with. As more establishments close, others are exploring strategies to adapt, showcasing resilience amidst adversity. The community hopes for revitalization to strengthen the local economic environment in the future.
East Tennessee is experiencing a significant wave of business closures, particularly in Knoxville, prompting concerns about the local economy and community resilience. A variety of businesses, including restaurants, theaters, and retail stores, have ceased operations over recent months, reflecting a troubling trend fueled by rising operational costs and the challenges of sustaining profitability in an evolving market.
Among the notable closures, Long’s Drugstore, a community staple in Bearden, closed its doors in 2024 after decades of service. The owner attributed the closure to the difficulties associated with running the pharmacy in a challenging economic climate. Similarly, Halls Cinema 7, an independent movie theater, shut down due to a significant disparity between revenue and operational expenses, making it unfeasible to continue operations.
The restaurant sector has not been immune to these trends, with several popular eateries closing in quick succession. 1783 Eatery in Seymour announced its closure after less than two years of business, leaving patrons curious about the owners’ next steps. Another popular Knoxville establishment, Ham’N Goodys, recently closed two of its locations in Sevierville and on Clinton Highway, citing a decline in business as the primary reason.
Many other eateries are similarly feeling the pinch. Lulu’s Tea Room in Powell revealed it would close its dining room on February 28, 2025, referencing an increase in food prices, utility costs, and wages. In Alcoa, Lee’s Famous Recipe Chicken shut its doors in November after over 40 years, with the owners opting for retirement. The bar Merchants of Beer, which opened in 2017, closed on October 26, 2024, with the property sold for $5.15 million amid ongoing economic pressures.
In December 2024, Fieldhouse Social, known for its craft food and beverage selection, closed abruptly, adding to the list of businesses facing abrupt closure. Pero’s on the Hill also shut down in September, as co-owner Sammy Peroulas chose to retire to spend more time with family. The closure of Surin of Thailand at the beginning of 2024 was another contributing factor, with the owner’s passing addressed through their social media channels.
This trend did not spare beloved local establishments. The Donut Shop announced its impending closure on December 22, inviting customers for a farewell celebration. Other closures included South Press, which closed at the end of June 2025, and Frothy Monkey, a coffee shop that ceased operations on May 7 due to potential changes in property ownership.
Looking ahead, Sweet P’s Downtown Dive plans to close permanently on June 15, 2025, driven by decreased business and increased competition, although its Uptown Corner location will remain operational. Additionally, Babalu, a downtown restaurant, announced its imminent closure after nearly a decade on Gay Street, along with Landing House, an Asian restaurant in South Knoxville that attributed its closure to rising food costs resulting from tariffs. Golden Roast, known for its coffee, closed both of its locations in April 2025.
The trend of business closures is not limited to downtown Knoxville. Numerous eateries and small businesses across East Tennessee are grappling with similar challenges, reflecting broader economic issues. As numerous establishments close their doors, several businesses in the region are actively exploring strategies to adapt or rebrand in response to the ongoing economic downturn, demonstrating resilience in tough times.
The rising operational costs and shifts in consumer behavior present significant obstacles to sustaining small businesses. However, as the local economy faces these hard challenges, the community hopes to see revitalization efforts that might lead to a stronger economic environment in the future.
Deeper Dive: News & Info About This Topic
- WBIR: Knoxville Eateries Closing Amid Economic Uncertainty
- Wikipedia: Economic Crisis
- WATE: Knoxville Restaurant Closures Reflect Challenges Facing Small Businesses
- Google Search: Knoxville restaurant closures
- Inside of Knoxville: Two Closures and an Opening
- Encyclopedia Britannica: Small Business
- Knox News: Smokies Games Hurt Old City Business
- Google News: Small Business Challenges
- Knox News: List of Knoxville Closures & Cancellations
- Google Scholar: Restaurant Closures Impact
Author: STAFF HERE KNOXVILLE WRITER
KNOXVILLE STAFF WRITER The KNOXVILLE STAFF WRITER represents the experienced team at HEREKnoxville.com, your go-to source for actionable local news and information in Knoxville, Knox County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Dogwood Arts Festival, Big Ears Festival, and Knoxville Asian Festival. Our coverage extends to key organizations like the Knoxville Area Chamber Partnership and United Way of Greater Knoxville, plus leading businesses in healthcare, education, and energy that power the local economy such as Covenant Health, University of Tennessee, and Tennessee Valley Authority. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
