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Why Restaurants Are So Fucked

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Re: Why Restaurants Are So Fucked

#171

Post by puranjay »

thinkingkong wrote: post #3

Restaurants are fucked but the underlying costs associated with real estate are insane. Where I live, treasured restaurants close at a regular cadence due to rent hikes. Nobody can afford to run a restaurant at the prices being charged here. The end result is a cocktail that is $25 or a pint thats $10. High real estate prices are essentially forcing every commercial space to become a chain restaurant unless they can…

The real estate sector hasn't made sense to me in years. No matter what happens, prices either stay intact or go up. Nothing seems to move the prices down.

Re: Why Restaurants Are So Fucked

#172

Post by avolcano »

bkanber wrote: post #108
yellowapple wrote: post #82

Earlier quoted context omitted.

I mean, if it's a really good sandwich I might.

I'd pay $13-15 for the doner in the article for sure. (NYC)

You'll find a $16 doner in the comically overpriced food court in City Point, or a $15 currywurst at a place Chelsea Market.

This is, of course, a comically grim state of affairs compared to the 4 euro doner or currywurst you can get in Berlin. Though I will say NYC halal carts might be the best _common_ street food in the US, and that hasn't yet made it above the $6 sandwich/$7 plate mark... yet.

Re: Why Restaurants Are So Fucked

#173

Post by kevindong »

fouc wrote: post #94

I eat out every meal in thailand, but I eat at small mom'n'pop shops, fresh cooked meals for $1 each. It would be nice if we moved away from the big restaurants and moved towards smaller shops that are more kitchen than restaurant. Restaurants should stop wasting money on signage, interior design, and fancy tables or dishes. Let's go back to simple, plain, and cheap.

Prices in developing countries are low because ingredients/labor/location is cheaper than in developed countries.

The lack of frills (e.g. signage, interior design, tables, dishes, etc.) are not what make the prices low (relative to developed countries).

Re: Why Restaurants Are So Fucked

#174

Post by flowerbeater »

mekanicalsyncop wrote: post #158
dehrmann wrote: post #127

Earlier quoted context omitted.

1 and 2 can both be true and margins can still be low because of higher rent and/or labor costs. > Is it really just too many food vendors thinking that the $1 happy meal is their competition? Maybe if you're a Burger King, but most restaurants aren't really competing with fast food. It's more like the Italian place is competing with the Sushi place in the same price bracket (I'm guessing, but 3x-5x more than fast fo…

It used to be 3-5x more than fast food. A burger with a meal + a drink @ Wendys is like $8+. The price of fast food has risen quite a bit over the years. I can get a burger and fries that's 10x better at Friendly's, Ruby Tuesday's or a half a dozen other franchises for about $10-12 and the only sacrifice I have to make is that I'll have to drink water instead of soda.

I don't buy this. At a fast food chain, drinks are $1 with free refills. A burger is $3 for the fancy ones, $1 for the dollar menu ones. The windows also have all sorts of 4 for $4 or $5 value meal deals. So $5 without any coupons at Wendy's. Two people can eat for $6 if you use a coupon.

Ruby Tuesday burgers are $9.50 with fries. Add a soda, tip, tax, and it's $16. The multiple is still 3-4x.

Re: Why Restaurants Are So Fucked

#175

Post by chii »

pdonis wrote: post #65
Gollapalli wrote: post #53

Earlier quoted context omitted.

>Restaurants must relocate to cheaper areas like warehouses and shift to a delivery-first distribution model, which Uber, Lyft, and Google Express could help dispatch. It sucks from a customer-interaction perspective, but it's necessary. Other businesses like Pret in London were already using a hybrid centralized preparation with small, hyperlocal retail sales model. Yes. Let's just kill all community space. Great id…

> Let's just kill all community space. It might be helpful to differentiate "community space" from "restaurant". Or perhaps to differentiate "restaurant that is primarily selling convenience", which is the kind the article seems to be describing, from "restaurant that is primarily selling a dining experience in a community space". I would expect margins on the latter type of restaurant to be significantly higher.

all restaurants want to be a 'dining experience'.

But only restaurants that can be this are famous ones which have a lot of celebrity pull. So the remaining ones that don't have such pull will need to adapt, or die.

It's not that all restaurants will die - just the ones who aren't celebrity/famous and can sell an experience.

Re: Why Restaurants Are So Fucked

#176

Post by JackFr »

mark-r wrote: post #93
Digory wrote: post #83

Earlier quoted context omitted.

And yet I'm not sure it's a smart deal to be a commercial landlord. These "Retail space per capita" graphs have been eye-popping for awhile.[0] The landlords that win seem to be the landlords who play the political subsidy and tax games, not just good developers. [0]

My favorite is the landlords that refuse to lower their rents to attract tenants. They got a loan to buy the property, and the loan is backed by the revenue potential of the property. If rents decrease, the revenue potential also decreases and the lenders require the property owners to make up the difference. It produces a huge incentive for a property to go unrented at a high price rather than rented at a low price.

I’m familiar with the argument but I think people overstate the importance of unrented high price to refinancing. Banks (and CMBS investors) don’t simply look at market rent levels in isolation. They also look at percent vacant and length of tenancy. Except over the very short term, no one is being deceived.

Re: Why Restaurants Are So Fucked

#177

Post by postingawayonhn »

thinkingkong wrote: post #3

Restaurants are fucked but the underlying costs associated with real estate are insane. Where I live, treasured restaurants close at a regular cadence due to rent hikes. Nobody can afford to run a restaurant at the prices being charged here. The end result is a cocktail that is $25 or a pint thats $10. High real estate prices are essentially forcing every commercial space to become a chain restaurant unless they can…

And why do we have high real estate prices? Because of cheap money (low interest rates).

Good thing central banks around the world have been cutting rates. /s

Re: Why Restaurants Are So Fucked

#178

Post by galago »

karmelapple wrote: post #128
duxup wrote: post #70

Earlier quoted context omitted.

Yeah I wonder about the real estate situation. There is a retail development near me that sat largely empty for years. They kept it up and clean, but word was the prices were sky high. It still has a huge number of vacancies ... we're talking 5+ years after it was built. Meanwhile other retail places had shops closing, word was the rent kept climbing. I almost want to suggest that the local city come up with a concep…

Harvard Square in Cambridge, MA, has trended towards being one of these places in recent years. Restaurant or other long-standing business can no longer afford the rent, and it’s either replaced by nothing or a bank. It says the lifeblood out of the area. From what I understand, the owners of the buildings are holding out for the high cost renters... like a bank. A city government could provide incentives to ensure t…

Harvard Square isn't a good example because Harvard owns so much of the property. That's why Davis/Porter/Central all have liquor/wine stores but Harvard doesn't. Businesses exist because Harvard allows it--not a free market within that limited zone.

Re: Why Restaurants Are So Fucked

#180

Post by alexashka »

supernova87a wrote: post #137

I'll make another observation about the landscape of restaurants. You may notice that in Europe, Asia, the demographics of restaurants are noticeably different from the US. There are far more hole-in-the-wall mom-and-pop restaurants in those places compared to the US, running a small and seemingly profit-thin but subsistence restaurant for the neighborhood. Think of a suburban neighborhood in Madrid or Rome, where a…

I want small restaurants as much as I want shoe makers instead of automated Nike factories.

The way forward is not by enabling people who can serve 500 people/day to exist when we can have a robot serving 5,000.

We want automation, we want people doing what they choose to do because we've automated away things they had to do, such as work for a living.

The way to get there is more automation.

Restaurant cooks/servers are the equivalent of hand washing clothes. We have washing machines - technology has enabled humanity to do a great deal more with their life, let's move in that direction please.

The other piece of the puzzle is this - technology alone is not enough - technology alone is why we have nuclear weapons and idiots with nuclear codes. The time will come soon, when we have to have a frank conversation about the number of idiots inhabiting this Earth and that it's not climate change, it's idiots, that will be the end of all of us if this keeps up.

Anyhow :)

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