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Why Restaurants Are So Fucked

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Re: Why Restaurants Are So Fucked

#141

Post by soup10 »

PaulDavisThe1st wrote: post #117
8f2ab37a-ed6c wrote: post #58

Earlier quoted context omitted.

Or, who's going to pay $15 or $20 for a sandwich? Most people will pass.

Why will they pass? What's the calculus? "I could make it myself for less" ? "It used to be less" ? "It shouldn't cost that much " ? Isn't it more likely to be true that they will pass because they've become accustomed to crazy low prizes for prepared foods?

People are fine with making their own food. It has a big benefit in that you can make it exactly how you want. Restaurant food makes the most sense for things which are difficult to make or require expensive equipment or the most prep.

Re: Why Restaurants Are So Fucked

#142

Post by 013a »

PaulDavisThe1st wrote: post #117
8f2ab37a-ed6c wrote: post #58

Earlier quoted context omitted.

Or, who's going to pay $15 or $20 for a sandwich? Most people will pass.

Why will they pass? What's the calculus? "I could make it myself for less" ? "It used to be less" ? "It shouldn't cost that much " ? Isn't it more likely to be true that they will pass because they've become accustomed to crazy low prizes for prepared foods?

I don't feel its a matter of people passing or not. Its a matter of how often they pass. People, in aggregate, will just eat out less. Whether this means restaurants will, at the end of the month, make more or less money, I don't know (I suspect its less, because it seems most of the costs are pretty constant; the food itself is a minority of the pie).

Re: Why Restaurants Are So Fucked

#144

Post by every »

kyuudou wrote: post #132
every wrote: post #112

I worked bar and restaurant for 25 years. I would never, ever open or own a restaurant voluntarily. The margins are minuscule and require huge up-front costs with micro-managed inventory, labor and quality control to break even. Bars however are a dream. Inventory control is simply tracking portions and comps. Outside of garnishes nothing rots or goes bad. And assuming tips are good, labor is no worry either. We had…

>Bars however are a dream. As long as the location is good and the clientele are don't fight, get unruly or drunk drive. Ideal would be somewhere like NYC that's mostly walkable. Can't just open up a bar at the end of the universe. Unless talking cow being served.

I once worked for a chain of nightclubs. We used a poor man's form of demographic analysis. We looked to see where the major franchise food operations were building and would shop for a property there. People eat and people drink...

Re: Why Restaurants Are So Fucked

#145

Post by creato »

I think at least the more casual/lower-end restaurants are fucked because a lot of people probably learned how to cook in the last few weeks and realized that it isn't hard to make food that is pretty good, and it's a lot cheaper and easier to do when doing it regularly.

I'm sure the "fine dining" restaurant business will pick back up again, but I think the medium tier restaurants will be hurting for a while. I'm certainly going to be buying a lot less Thai, Mexican, Chinese, etc. food and making it myself instead. It's almost as good if not better and I tweak dishes to make them how I prefer.

Re: Why Restaurants Are So Fucked

#146

Post by WalterBright »

triceratops wrote: post #50

> Drinks for instance cost us more than at the grocery store — but we can’t exactly go get 20 cases of pop per day, so we don’t have much choice. I didn't understand this. It may not be feasible to buy 100 cases of pop at a regular grocery store, but isn't Costco/Sam's Club set up for that? I do think it comes down ultimately to real estate prices. Major metros in North America have gradually become unaffordable for…

> All that profit margin is ending up in landlords' pockets.

The landlord's costs go up, too.

Re: Why Restaurants Are So Fucked

#147

Post by PaulDavisThe1st »

8f2ab37a-ed6c wrote: post #134
PaulDavisThe1st wrote: post #116

Earlier quoted context omitted.

And yet this is not (so) true in Europe, where (1) people eat out less but (2) people pay more for restaurant food. What's the difference? Is it really just too many food vendors thinking that the $1 happy meal is their competition? Or what? EDIT: a better formulation, from a reply I wrote below: I'll restate it somewhat differently: eating out in Europe more accurately reflects the full cost of everyone involved mak…

2 is not true for Southern Europe.

True. I'll restate it somewhat differently: eating out in Europe more accurately reflects the full cost of everyone involved making close to a living wage.

Re: Why Restaurants Are So Fucked

#148

Post by freeone3000 »

zwirbl wrote: post #138
wozniacki wrote: post #62

Earlier quoted context omitted.

But isn't it cash-only at even most established joints in Germany much less mom and pop immigrant-run hole-in-the-walls? My friend tells me even vape shops that sell hundreds of dollars of gear are cash only. We have plenty of those in our ethnic neighborhoods. Heck even some very successful joints like Rosamunde Sausage Grill in the Mission District (S.F.) were cash-only until a couple of years ago, when I last went…

But how does cashless pay make it cost a few bucks per serving more? If it is that, why would anyone offer cashless payment? Most Döner and other Street Foods in Austria are cash only, but that's not the reason a typically priced Döner costs ~5€

Cash-only means no card reader rental, which saves a couple hundred per month and at least 5% of every transaction, and possibly no internet bill, either...

But you can't go cash-only because so few people carry cash, that our would drive out your sales.

Re: Why Restaurants Are So Fucked

#149

Post by sneak »

supernova87a wrote: post #123

Unless you're a really special restaurant with significant differentiation capabilities and people come to eat at your place irrationally, here's a tip: Restaurants are never the ones making the money. They enable others to make money. Usually, landlords. And generally, be cautious about going into a business where people want to do it because it's their passion. It means you're going to competing with people who are…

So, this is a refutation of one of the author’s points: either you differentiate, or is is unskilled labor (and the iron law of wages is nipping at your toes).

It’s possible to differentiate purely on marketing and not just food alone, too. But it’s madness to expect to make your money on volume in the restaurant biz and make any significant money without double-digit location counts and significant capital reserves; too many other giants can squeeze you without a thought (eg the McDonalds $1 value menu the author also cites).

Nobody’s “in” to paying >$10 for döner kebap. You have to differentiate a lot more than that; unlike me (and edge case) most people will not pay $25 to scratch the itch of the intense periodic lust for dönerfleisch.

Re: Why Restaurants Are So Fucked

#150

Post by JackFr »

every wrote: post #112

I worked bar and restaurant for 25 years. I would never, ever open or own a restaurant voluntarily. The margins are minuscule and require huge up-front costs with micro-managed inventory, labor and quality control to break even. Bars however are a dream. Inventory control is simply tracking portions and comps. Outside of garnishes nothing rots or goes bad. And assuming tips are good, labor is no worry either. We had…

Yeah it’s funny that she ever mentions booze, where the markups are 200-500%. If you can use your tables and food to sell bottles of wine, you can really improve your bottom line.
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