I've been seeing message board threads and news articles about restaurants dying for like 5 years.

But almost every restaurant I go to or try to go to is busy. Maybe it's just Houston getting fatter, but I've yet to see this dramatic drop off.

Everything is dying. Small children now will likely never own their own cars (will they even drive?) or homes. Human experience getting sucked out of everything in the name of laziness aka "convenience". We are headed for a stale soulless dystopia.

I hope I am wrong and that the teenager and young adult experience for my little one will be half as enjoyable as mine was.

Ol_Ag_02 said:

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If you're a half-way decent cook going out just isn't worth it. Just wasting money on food that isn't as good as what I make at home.

Now I will gladly spend money at the local taco shop becuase i don't have a shawarma grill to cook al pastor on.

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Talk to some married retirees or older. Many of them underscore that they have "closed their kitchen" and it basically means that expecting a lot of home cooking is not in the cards. So that plays a role too ---- they have enough to eat out or order, so they do. Then there are some that just too semi invalid to do their own cooking much or stay on their feet.

my favorite dive restaurant now charges $19 for their chicken fried steak plate that comes with a side and a small salad of shredded lettuce. The steak pretty much covers the plate so it is a good hearty meal but at that price i cut back from once a week to once a month. They still have $5 27oz. schooners of Shiner Bock so they have that going for them.

89DogDoc94 said:

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I just want to add in a "tip" comment.

My best friend is a server at a mod / high end family owned chain resturant in the Houston area. I would guess average price is $40 to $60 per person for an evening meal plus drinks.

They get paid $2.50 per hour. They have to live off of tips. They work their ass off for 6 to 7 hours per night. It is now becoming more coommon for her to spend 2 hours taking care of a party of 4 to 8 and bill north of $300 and then get a tip of 8 dollars.

I am not a fan of the tip culture, or the system in general, but the industry is fixing to start loosing the experienced servers to other jobs if the tips don't improve.

If you are going to go out to eat at a sit down place and these servers work on tips alone, then freaking take care of them if they do a good job.

Rant over.

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I'm with you. I always leave 20%, at least, because if I can afford to eat out, I can afford to give someone who is busting their asses off to take care of me during my meal. If giving a decent tip is too much, I shouldn't be eating out in the first place.

Also, if someone is just too cheap to tip, they have a real problem.

I travel a lot for work in 6 states. Eat at both chains and local, nothing fancy.

Up until about 2 months ago majority seemed busy. That has changed noticeably now.

At home, I am almost 100 percent making it myself. The only time is a late night after kids practice/games. Though now I am planing simple/quick dinners like hot dogs, hamburgers etc instead

I cant justify paying $40.00 plus for myself and 2 boys at chick-fil-let etc. we would go there about once a week after practice

MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

500,000ags said:

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I think there is a lot of dynamics going on in service/restaurants.

1. Gen Z is not expounding on micro, farm-to-table, etc. Things that made the golden age of restaurants and breweries under millennials. They legit want more sterile experiences IMO. This even for those older Gen Zers that are raking in from the income and opportunity potential from the labor shortage during Covid.

2. We no longer have a K-recovery, we have a K economy. Those that make >125k can afford a decent amount of convenience (based on life stage also). Large scale where they cannot afford anything or necessities only. Also a ton of Gen Z that uses DoorDash and Uber Eats and the economics are outlandishly terrible for everyone involved. +40% for cold food.

3. Restaurant operators are rarely business savvy. Friends with several, and I would never tell them how to run their businesses, but their ideas and strategies are almost universally terrible. I had 2 in the same day say we need to implement a trivia night. It was hard not to laugh at the second one. One built a $6MM building in 2022 and after his first head chef was poached, his second was terrible with consistency, but he was loyal to a fault and has kept him for over 18 months.

4. There are probably too many restaurants from the aforementioned millennials desire for elevated dining. Excess competition and almost all but the best suffer through a downward spiral.

5. Tip culture - nuff said.

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This can never be said enough. There are some, but they are few and far in between. This is why so many restaurants fail.

ABATTBQ11 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

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This might explain certain inexplicable sudden closures. Of a place you thought was doing well.

Even happens to chains. The most baffling being Picasso's group of restaurants because it just pre-dated the 2020 Covid disaster in that they shuttered before the March 2020 shut down.

Quote:

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Are Restaurants Dying in the US?

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Yes

ABATTBQ11 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

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Very true.

I just saw a story about a fast-casual place called SweetGreen that opened strong and has had year after year declines for all kinds of reasons. Someone who knows the business said that even though opening more and more stores is usually the best way to make money, the company was spending too much on the people at the top and needed to trim there (meaning salaries perhaps) if they really wanted to get things going in the right direction.

infinity ag said:

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This is my experience too. Everything is very expensive and been increasing much more than wages. Some years ago, I used to pay $10 for a Thai Green Curry at a local restaurant. Now the same thing is $16. Salaries have not gone up 60%. I don't think restaurants are cheating us because they need to survive and walk the fine line too. Is it taxes? Probably. Why are taxes going up? Because we waste money on things like important migrants from Venezuela and giving people large pensions (in blue states).

It is a vicious cycle. Restaurants cannot survive charging what they did, so they increase. That reduces customers and reduces revenue. If they reduce prices, they cannot stay in business.

Then comes the tip! We are guilted into paying 25%. WTF? No company operates by expecting their customers to pay their workers their wages. Broken business model that is outdated and stuck in the 50s when there were almost no immigrant invasions. Restaurant owners also get militant and say if you cannot pay the tip, don't eat out. Fine.

Are we going to see a lot of restaurants going out of business? Even Chipotle (I hate it but my family lives it) is struggling because kids are not going there because of cost.

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Torchy Taco's had 3 restaurants open in the KC Area near where I live. Used to hit one of them near my work for lunch at least 1x per month and it was always full. One near my house we'd also go to 1x per month usually 1/2 to 3/4 full, sometimes more. One further away I almost never visited but occasionally if I was near there and wanted lunch.

The one by my office and one near my home closed and only the one further away (not really far away, I just never travel around town in that direction) is the only one open now. It was communicated as a "strategic decision" by Torchy corporate. Both places that closed I think are higher rent areas vs the one they left open.

I think I've been once since the two shut down 4 months ago. So basically they've made a strategic decision and lost 6-7 chances to sell me food. It also seems like a meal is now 2x what it was 4-years ago so we just don't go out to eat that much anymore.

100%

When you read the actual Porter's 5 forces book, not just the watered-down management version taught in business school. The primary force is barriers to entry. Restaurants have none, and it ****s up local dynamics for even good places when another with a poor operator opens.

Also, Peter Thiel's book makes a decent case that over-competition is rarely good for anyone. You need a few that do what they do well, creates a healthy competitive market for pricing that won't flood subpar product in the market place.

Restaurants with poor operators are almost doomed from the beginning, where even good food, good location, and good working capital rarely help.

No Spin Ag said:

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ABATTBQ11 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

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Very true.

I just saw a story about a fast-casual place called SweetGreen that opened strong and has had year after year declines for all kinds of reasons. Someone who knows the business said that even though opening more and more stores is usually the best way to make money, the company was spending too much on the people at the top and needed to trim there (meaning salaries perhaps) if they really wanted to get things going in the right direction.

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That absolutely can happen and does not always follow. What is the best way to make money is once a good size and having a good year, spend a little time at that level, building up your foundation and stability. It is not a good idea to keep expanding too fast so that the very next crash puts you flailing in open sky with no bridge. And the other trap is don't spend too much catering to the increasing egos and whims of the people at the top even if they are your money makers--- indulge them, but not "yes" to every little detail or office enhancement. It takes a balance. Expand two at a time, not four at a time, and so on, till more sure.

Jugstore Cowboy said:

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I've been seeing message board threads and news articles about restaurants dying for like 5 years.

But almost every restaurant I go to or try to go to is busy. Maybe it's just Houston getting fatter, but I've yet to see this dramatic drop off.

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Americans get fatter because they eat bad food. Like crappy cheap McD burgers with salty fries washed down with gallons of Coke.

Don't confuse this with restaurants being busy. You can also get fat sitting at home eating processed junk.

titan said:

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No Spin Ag said:

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ABATTBQ11 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

---

Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

---

Very true.

I just saw a story about a fast-casual place called SweetGreen that opened strong and has had year after year declines for all kinds of reasons. Someone who knows the business said that even though opening more and more stores is usually the best way to make money, the company was spending too much on the people at the top and needed to trim there (meaning salaries perhaps) if they really wanted to get things going in the right direction.

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That absolutely can happen and does not always follow. What is the best way to make money is once a good size and having a good year, spend a little time at that level, building up your foundation and stability. It is not a good idea to keep expanding too fast so that the very next crash puts you flailing in open sky with no bridge. And the other trap is don't spend too much catering to the increasing egos and whims of the people at the top even if they are your money makers--- indulge them, but not "yes" to every little detail or office enhancement. It takes a balance. Expand two at a time, not four at a time, and so on, till more sure.

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Good points.

There was a story back in the early 90s of the husband and wife who owned most of the Peter Piper Pizzas in the RGV.

They said the secret to their success was working every hour in their stores and reinvesting every profit into them, and then expanding them when doing so wouldn't be a burden on the other stores.

At that time, they owned over a dozen stores and were very, very well off, yet they still put in forty hours each at their stores because they wanted to make sure they saved where they could on labor and make sure the quality of their products (food and customer service) didn't go down.

I can't think of a better example than those two of how to do it right.

titan said:

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Omperlodge said:

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I think how they have applied inflation has hurt their business more than anything else. They want to maintain their old margins at new higher costs. For instance, if your costs where $3 and you sold it for $10 you made $7. Now your costs are $6 and instead of going to $13 you go to $20. This runs off customers and you don't even notice it at first because those that do still come are covering the 50% drop in customers. Then those stop coming and you go out of business.

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It does seem to vary. Know of one company so far just `absorbing' the tariff costs. They haven't passed on to their customers so far. I wonder what the calculus is, if it somehow works out for them. Its very interesting.

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tariffs on food for restaurants?

No Spin Ag said:

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ABATTBQ11 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

---

Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

---

Very true.

I just saw a story about a fast-casual place called SweetGreen that opened strong and has had year after year declines for all kinds of reasons. Someone who knows the business said that even though opening more and more stores is usually the best way to make money, the company was spending too much on the people at the top and needed to trim there (meaning salaries perhaps) if they really wanted to get things going in the right direction.

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You know why? Corporate incentives are for growth. Not for building sustainable long-term value. So leaders have to open more and more even if it is bad business. This is true for public companies, not for restaurants that are owned privately. They don't do things bad for business knowingly.

Logos Stick said:

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I went to visit my youngest son this past weekend. He and I hit up Whataburger in the drive thru. Employee said your total is $35. I looked at my son and asked "did I hear that right?". Four items, no drinks, $35.

I don't see how most people afford it anymore.

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They don't. Government and credit card debt pay for it.

infinity ag said:

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No Spin Ag said:

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ABATTBQ11 said:

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MemphisAg1 said:

---

I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

---

Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

---

Very true.

I just saw a story about a fast-casual place called SweetGreen that opened strong and has had year after year declines for all kinds of reasons. Someone who knows the business said that even though opening more and more stores is usually the best way to make money, the company was spending too much on the people at the top and needed to trim there (meaning salaries perhaps) if they really wanted to get things going in the right direction.

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You know why? Corporate incentives are for growth. Not for building sustainable long-term value. So leaders have to open more and more even if it is bad business. This is true for public companies, not for restaurants that are owned privately. They don't do things bad for business knowingly.

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Makes all the sense in the world. Thanks for the knowledge.

agracer said:

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titan said:

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Omperlodge said:

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I think how they have applied inflation has hurt their business more than anything else. They want to maintain their old margins at new higher costs. For instance, if your costs where $3 and you sold it for $10 you made $7. Now your costs are $6 and instead of going to $13 you go to $20. This runs off customers and you don't even notice it at first because those that do still come are covering the 50% drop in customers. Then those stop coming and you go out of business.

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It does seem to vary. Know of one company so far just `absorbing' the tariff costs. They haven't passed on to their customers so far. I wonder what the calculus is, if it somehow works out for them. Its very interesting.

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tariffs on food for restaurants?

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No, unrelated business. Its just the stunt of absorbing the tariffs when their competitors in same situation and business are passing on (or at least partially passing them on) is interesting. Not what one might expect.

ABATTBQ11 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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Doesn't always mean they're profitable or sustainable. A packed restaurant may be operating on razor thin margins to stay packed, and while it remains open, it is a poor investment and at severe risk to any kind of interruption.

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That may be true. I'm just saying I've been to the four corners of the US (NE, SE, SW, NW) and many places in between this year, and the restaurants are packed. I've heard about the death of them for years now, but they are still humming. The well-to-do aren't constrained by inflation, and there are still many who aren't well-to-do who prioritize eating out over fixing meals at home. I'm still amazed that people will wait in line and pay $5 to $10 everyday for a drink at Starbucks when I can make it for 50 cents or less at home and my employer provides it for free.

No, restaurants are not dying. Prices go up. It happens. People adjust.

Most Americans are too lazy or time constained to cook. Most well run restaurants will be at least moderately succesful

MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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This could just be selection bias, where you don't see the failing restaurants because you're not going there (and neither are your co-workers).

I'm old so I think it's something to do with Korea like K-POP and K-Wave.

BonfireNerd04 said:

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US tipping culture needs to die.

Abolish the subminimum wage. Make restaurants fulfill their duty to pay their workers instead of guilt-tripping customers into doing it. Raise the price of the food accordingly. Be like the rest of the world.

I'm tired at being prompted to pay 20% or more just for someone doing their normal job. Especially when it's at a restaurant that doesn't even have waiters, but just gives you your food over the counter. Quit pretending that it's "too complicated" to disable the tip prompts on the card reader.

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Removing tipping all together would decimate the restaurant industry. Also, a good server can make more than an hourly wage that a restaurant owner would be willing to pay at a decent restaurant. Right now the issue is exactly what you are saying about tipping to do your normal job. It was never designed for the Starbucks barista making $15/hour or the Subway sandwich worker making $10/hr. Being hit with tips from every angle is what is causing the issue.

MouthBQ98 said:

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I really don't get how people can afford it, unless they are high income. we might eat out 2-3 times a month at most. Maybe 2-3 more fast food meals on the road in a month. We live out in a rural area so there is no delivery, and we wouldn't pay for it anyhow.


The food itself has not inflated that much. The costs of providing, preparing, and serving it have.

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Agreed to some extent but many miss that inflation is cumulative. When you see a 2-3% CPI for food in one year, that's the growth compared to the prior year or some point in the past. Usually its done year to year (or month to month).

So ten years of 1% inflation isn't a 1% increase in prices over ten years. Over those ten years its a 10.46% price increase and our inflation has been on average, over 2% the past 20 years (even excluding covid years).

Yes, everything has gone up, but so has food.

cab559 said:

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aggieforester05 said:

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I took my wife to a nice restaurant for her birthday. We both got a ribeye that came with potatoes and asparagus. Chips/Queso for appetizer. She got one old fashion and I got one beer. $176 plus tip came out to $211. Date night has gotten a little steep to say the least.

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I'm curious which 'nice' restaurants offer chips and queso as an appetizer with the option for a ribeye entree? Sounds like absurd prices for a Chili's or Applebee's.

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Local restaurant - the queso had veggies and filet in it, plus chips made in house. It was like $20 and entrees pretty much started at $50 a piece which is where the real cost was.

Yep. Also, Europeans brag about not having to tip, then come to the U.S. and are amazed at good service. I don't think the system is ideal, but there are some good points.

BonfireNerd04 said:

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MemphisAg1 said:

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I travel a lot for business.

Restaurants are packed, no matter where in the US you go.

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This could just be selection bias, where you don't see the failing restaurants because you're not going there (and neither are your co-workers).

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It could be, but I'm not all that picky. I cover a lot of ground and see many things. I generally try to pick a less-busy restaurant because I hate crowds and loud noise.

People gotta eat. Some can still afford it pretty easily, and others are loathe to dial it back even though they can't afford it.