Inside these restaurants, it’s evident that the forces making this one of the most expensive cities in America are subtly altering the economics of everything. Commercial rents have gone up. Labor costs have soared. And restaurant workers, many of them priced out by the expense of housing, have been moving away. Restaurateurs who say they […]
Labor now accounts for more than 30 percent of the average restaurateur’s business, and some operators have increased prices by about 8 percent to help combat the additional expenses.
Canadian behemoth franchisor MTY Food Group Inc. agreed to acquire the franchisors of the Counter and Built upscale burger chain brands for an undisclosed amount, MTY announced today. The company expects the deal to close next month. . . The offices of the two limited liability corporations running the franchises will move to Scottsdale, Ariz., MTY said. MTY’s Kahala Group subsidiary, acquired last year, is also based in Scottsdale. Kahala’s holdings include Pinkberry, Cold Stone Creamery and Baja Fresh, among others.
San Francisco’s ever-rising minimum wage—set to hit $15 next year—has restaurant owners asking for the check. “At Least 60 Bay Area Restaurants Have Closed Since September,” read a January headline at the website SFist, which partly blamed “the especially high cost of doing business in SF, with a mandated, rising minimum wage that does not exempt tipped employees.” Another publication, Eater, described the rash of recent closures as a “death march.”
In lieu of steep menu price increases, many independent and regional chain restaurants in states including Arizona, California, Colorado and New York are adding surcharges of 3% to 4% to help offset rising labor costs. Industry analysts expect the practice to become widespread as more cities and states increase minimum wages.
In yet another awkwardly rational response to government intervention in deciding what’s “fair”, the blowback from minimum wage demanding fast food workers has struck again. Wendy’s plans to install self-ordering kiosks in 1,000 of its stores – 16% of its locations nationwide.
Upward of 60 restaurants around the Bay Area have closed since the start of September alone, with many citing difficulties like the cost of finding and keeping good employees, rising rents, new requirements for providing health care and sick leave, and doing it all while competing with the slew of new dining options.
Carpinteria-based CKE, which also owns St. Louis-based Hardee’s, is consolidating both offices in Tennessee, which will be home to 120 corporate employees. Of those, 54 are new hires, which was necessary as 51 employees, including 24 working in Carpinteria, opted not to relocate, CKE said.
If you have 10 hourly employees working eight-hour shifts, five days a week and you raise the wages a dollar an hour, that comes out to a nearly $20K increase on the year. In AQ’s best year — a phenomenal year by restaurant standards — that would have been nearly 10% of profits. . . With the introduction of Obamacare, most restaurant workers finally got the coverage they’ve needed for years through the employer mandate, but critics often talk about the strain it puts on small-business owners . . Semmelhack told me that in 2012 they paid $14,400 for health care costs. In 2015, they paid $86,400. That’s an increase of $72K MORE per year than 2012, or 29% of their best year’s profit.
Most people can agree that 2016 was a hard year. And in the Bay Area, one group was hit particularly hard: restaurateurs. It seemed like every week, a beloved eatery closed, while another one opened, only to shut down a few months later. As the Bay Area continues to enjoy tech-fueled economic growth, the restaurant industry has suffered, even as the accolades–in 2015 Bon Appetit named San Francisco the country’s best food city!–continue to pile up. . . In 2017, the restaurants you go to–from the hole-in-the wall joint near your office to the fancy, anniversary dinner spot–will look different. They might be closed one day a week, to make up for their shortage of qualified staff. Your go-to dish might be more expensive, to make up for the rising minimum wage. They might be closed for good, and quickly replaced with an EDM bubble tea shop. . . Many restaurant owners see fast casual restaurants, instead of ones with full table service, as the solution to their economic woes. No table service cuts down on labor costs, offers diners a cheaper experience while shorter menus means a more efficient use of expensive labor.
Thanks To ‘Fight For $15’ Minimum Wage, McDonald’s Unveils Job-Replacing Self-Service Kiosks Nationwide
As the labor union-backed Fight for $15 begins yet another nationwide strike on November 29, I have a simple message for the protest organizers and the reporters covering them: I told you so.
However, we did not find that the supply of housing was significantly affected by the incidence of short-term rentals in the City or County of Santa Barbara. This is because (1) compared to the total size of the housing stock, there are very few STRs in Santa Barbara City and County, and (2) very few of these homes are used as STRs full-time. . . Overall, we found that an STR ban across Santa Barbara County would increase the housing supply for local residents by only 0.1%.
A group representing union hotel workers and Anaheim residents has submitted a referendum petition with more than 18,000 signatures to the city, challenging the proposed development of two luxury hotels in the Resort District. . . The union has sought a labor partnership with Wincome.
When many lower-income Americans are feeling isolated by the deadening uniformity of things, by the emptiness of many jobs, by the media, they still yearn for physical social networks. They are not doing this by going to government-run community service centers. They are not always doing this by utilizing the endless array of well-intentioned not-for-profit outreach programs. They are doing this on their own, organically across the country, in McDonald’s.
A former McDonald’s CEO warned that robots will take over staff jobs at the fast food empire – because it’s cheaper than employing humans.