The article does not make much sense, starting with the unsupported statement that "restaurants have been competing on price." That's really not correct. In any economy, some actors compete on price, others on quality or other differentiators.
The competition is on price only in commoditized markets, and even there margins vary based on demand and offer. If you have a gold mine, you have fixed extraction costs, but the price of gold is floating.
In the restaurant business, shops have different categories. A Michelin star, for example, allows you to be in a different "price bracket." Some of this, of course, is reflected in ingredients, location, and skills, but usually, a restaurant doesn't need to change location or chef to get an extra star, they just need to improve quality.
The "street food" or "comfort food" business does compete on price and generally uses marketing and location as a differentiator. You buy a cheap hot dog at the stadium because it's there. Competition for the cheapest street food is what she refers to, assuming that a niche is a whole market.
A market where there's too much competition on price means that there is more offer than demand. If several restaurants close, it means the number of restaurants and the number of people that need one rebalance, and this will mean higher margins for the remaining ones.