America restaurant bubble is about to pop vol: the end of another golden age

Discussion in 'General' started by suberzat1, Jan 3, 2017.

  1. suberzat1

    suberzat1

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    https://www.thrillist.com/eat/nation/american-restaurant-industry-bubble-burst

    Interesting read about what we all knew was coming with people wanting to open up cool shops that mimic from the original shop.

    I would like to provide a small location myself for those to taste delicious meals but not forced to open a restaurant to do so.

    People should get back to supporting the locals and mom and pop shops.
     
  2. kdawg

    kdawg Administrator Staff Member

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    I'm not sure about the conclusion that the reason for restaurants failing is the cost of labor. They skim over the fact that rent is killing them. To me that's the biggest difference between business now and 20 years ago - you can't just borrow a little money and open up a small business, work hard and expand - because you're paying way too much of your turnover in rent so that someone can sit at home and profit from your efforts. Just because they bought a building when it was cheap doesn't make them more deserving. It's not going to get better either - it's hard for folks nowadays to start a business mainly because of that.

    He mentions that in the part where he talks about the lease expiring and then tripling the rent - but to me it's the most important reason, and screwing us all over.
     
    Last edited: Jan 3, 2017
  3. jewseejay

    jewseejay

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    Yup we jus sat down at the table and the houses and hotels been up since the 70s. Just tryin to stay outta jail at this point. Waiting for a bank error in my favor
     
  4. jjs07

    jjs07

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    The arrogance of some of these owners/chefs are also contributing to the bubble bursting. For instance, there's a spot in DC called Shaw's Bijou. Opened with a lot of fanfare in November, I think. Dude had the audacity to charge $185 per person, not including drinks, taxes, or tip. Dinner for two would EASILY exceed $500. The owner got slammed by the press, amongst others. Long story short, they slashed prices in '17. By a lot.
     
  5. nazdrowie

    nazdrowie

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    saw this happen to a place i really liked in DC, Domku, in Petworth...shut down due to rising rent...

    however, when i think about my dining patters/preferences, it really IS fast-casual/takeout, or if going out, its typically whatever the bar serves...
     
    Last edited: Jan 3, 2017
  6. shogun

    shogun

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    What places are replacing these restaurants that get shut down? Other restaurants that can afford the expensive rent.
     
  7. suberzat1

    suberzat1

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    Yeah I remember reading about dude in the express saying that he plans to give back to the community by stopping at local schools to teach culinary. :\

    Crazy for him to think he could do that with his first restaurant after being on tv.

    Just a newer hip spot thinking they can afford the rent but only providing the same menu of food you can get a few blocks away.
     
  8. ScroogeMcBuckz

    ScroogeMcBuckz formerly aceboogie

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    A lot of the time they don't get replaced, a totally different business takes over. Depending on the location a trendier, casual high profit restaurant that can foot the bill like a Buffalo Wild Wings, Chipotle etc... will move in.
     
  9. sundoobie

    sundoobie

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    This is the main culprit

    In CA, startng 1/1/2017, it's $10 an hour. Add to that cost... US Govt mandated health insurance coverage, overtime laws, workers compensation insurance, and payroll taxes.

    $10 becomes closer to $15 an hour just to hire a dish washer... and in less than 6 years... Min Wage in CA will be $15.

    ^ For the next 6 years, that business has to deal with increasing minimum wage so the 20k will no doubt will be additional 100k+ by 2023. No business can survive that type of increase in cost unless you increase the prices on the menu and even with that, most businesses won't survive. The days of opening a small mom/pop business and having to hire employees full time are going away as most businesses are now focusing on temporary workers so they don't have to hire.
     
    Last edited: Jan 3, 2017
  10. luckyluchiano

    luckyluchiano

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    I didnt read the article but i have noticed the raising trend of "high end food courts". Pretty much a developer develops a cool trendy space and then reseraunts rent space in the development/building. So its a food court but with real resteraunts and fast casual type spots. Saves the businesses money because all they do is make the food and you pick it up and it gives individuals an avenue to discover new food.
     
  11. winter91

    winter91

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    Just seems like terrible management or terrible food
     
  12. suberzat1

    suberzat1

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    With that method it comes with the cost of low experience employees unless the owner is able to pull from a nice group of temporary workers with those set skills
     
  13. suberzat1

    suberzat1

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    Union Market here in DC is a good option for that but not sure how much to rent your selected space.
     
  14. luckyluchiano

    luckyluchiano

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    In major cities though rent I assume is high as hell but for the business owners its probably still cheaper than having to get their own buildings and dealing what comes with that. I wouldnt be surprised if the businesses didnt need an alcohol license because the owner of the building obtained it, but I dont know how that kind of stuff works.
     
  15. Bert.

    Bert. formerly zyzz

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    This is the reason a lot of established restaurants in my area are going out of business and forced to close, all I hear is how the landlords are raising the rent like crazy

    Really sad the spots I've seen close down the last few years
     
  16. Mark Antony

    Mark Antony

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    There's a couple of spots my girl had on her list in that $200+ each range that end up closed. I was never that wild on going anyways, just seems wrong to gouge that much.
     
  17. rillo561

    rillo561

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    Restaurants around me don't last long at all. It's always about the rent.
     
    Last edited: Jan 3, 2017
  18. worldbreaker

    worldbreaker

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    Yeah some of my friends that work or own restaurants complain about rent. Never heard them complain about labor costs. Expect when the topic of minimum wage rising to $22 comes up. 
     
  19. sundoobie

    sundoobie

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    Established restaurants should be able to open up in a different location though. Clientele will usually follow em.

    Landlords have to raise the rent based of business sense. I don't know any owner that refuses to make more money by keeping the rent as is even though there are countless other applicants looking to lease the building. It's the landlord's fault for pricing out it's lease based of fair market value? If anything this is the result of poor management by the Restaurant for not extending the lease prior to it ending or pursing a longer lease initially.
     
    Last edited: Jan 3, 2017
  20. jjs07

    jjs07

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    On top of it all, the dude that runs Shaw's Bijou wanted to have a "members only" bar. The pretentiousness makes me sick.

    I'm not sure of the prices, but there's a spot that's supposedly REALLY good in the city called Rose's Luxury. They don't take reservations for groups smaller than 6, but you got folks waiting to get in about 3 hours before the doors open.

    The fast-casual/Chipotle-method is the way to go. I see more restaurants (Cava, Bebop, etc.) adopting this philosophy of serving food.