During economic prosperity, restaurant parking lots are packed and new locations are rapidly popping up. Conversely, during economic downturns, restaurants see a significant drop in patrons and struggling locations often close their doors.
Unfortunately, 2024 seems to be witnessing a widespread “restaurant apocalypse” across the United States. The ongoing cost of living crisis has left many people with minimal disposable income, particularly affecting young adults. Individuals under 40, who traditionally enjoy dining out, are now facing financial hardships This trend is profoundly impacting the restaurant industry – leading to decreased traffic and numerous store closures.
"People are spending more, but they’re not spending it at restaurants," said chef David LeFevre. (Related: Restaurant industry collapsing across the US, with several popular chains permanently CLOSING DOWN numerous locations.)
LeFevre observed that many patrons have chosen to invest in their homes during the Wuhan coronavirus (COVID-19) pandemic, leading them to prefer spending time at home, especially in the evenings, to enjoy the upgrades they've made. This shift has significantly impacted dining patterns and restaurant revenue.
According to various chefs, the pandemic also altered the typical dining hours in Los Angeles.
"People don't go out to dinner late anymore. If you compare 2019 to today, reservations after 8 o'clock have drastically declined. Reservations after 8:30 p.m. are now only 50 percent of what they used to be, and that is a significant change," LeFevre explained.
In addition to changes in dining times, the pandemic influenced where diners choose to spend their money. Many people are now saving to travel and spend on dining experiences in different locales rather than eating out locally. Post-pandemic diner expectations have also evolved – particularly regarding outdoor dining. LeFevre and his team have had to adapt to these new preferences.
While all of his restaurants survived the pandemic, their success varied. Despite these challenges, LeFevre remains optimistic.
"Sometimes you have to change the lens you look through. There are big challenges, especially in California, but there’s a lot of optimism because I know how great it can be." LeFevre said.
Rising costs and minimum wage increases
In addition to shifting dining preferences, the restaurant industry faces rising costs and changes in minimum wage laws. Federal minimum wage remains at $7.25 per hour, but 25 states saw their minimum wage increase in 2024. California raised its hourly minimum wage from $15.50 to $16, trailing only Washington, D.C. and Washington state.
The city of Los Angeles will increase its minimum wage to $17.28 per hour and specialized fields in areas like Long Beach will see further wage hikes later this year. While these increases aim to improve livability in expensive cities, many restaurateurs see them as financial burdens in an industry already operating on thin margins.
AB 1228, a new California law, raised the minimum wage specifically for fast-food chain workers to $20 per hour for restaurants with more than 60 locations nationwide, affecting about half a million workers. This has led some franchises, like Pizza Hut, to lay off delivery drivers and switch to delivery apps, while others have increased prices or implemented automation to reduce human staff.
"Gas isn’t going down, rent isn’t going down," said Mysheka Ronquillo, a cashier and cook at Carl’s Jr. in Long Beach. The Fight for $15 and a Union in California, along with other trade unions, celebrated AB 1228 as a victory, arguing that many low-wage workers are just one paycheck away from homelessness.
Unite Here Local 11, representing over 32,000 hospitality workers, argues that pushback on wage increases primarily comes from larger entities rather than small businesses. The union highlighted West Hollywood's boom in new business permits after raising its minimum wage to $19.08 per hour, the fourth-highest in the country.
However, some restaurateurs in West Hollywood have had to limit hours, raise prices, or cut staff to cope with the wage hike. Craig Susser, owner of Craig’s, reduced his servers from 12 to nine to offset the increase.
As the industry navigates these changes, restaurant owners must balance financial stability, compliance with new regulations and fair employee compensation and benefits.
Watch the following video about "Restaurant apocalypse – The unstoppable collapse."
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9 months ago
Biz will just demand more of desperate ppl to keep their service industry jobs. The owner in article admitted he now makes 9 servers do 12 servers’ jobs. No shame.
9 months ago
The restaurants miss all the TRADE custom. For me my job wasn’t just a way to earn a paycheck. I liked the SOCIAL thing. Dozens of public houses, coffee houses, with dozens of deals being done.
A brochure, an email, a Zoom meeting? I believe there is no substitute for Face to Face meetings and then a handshake 🤝
London, Hong Kong and Beijing were the main places for trade conferences and no, the public house is not just a club for drunks. Businessmen in smart suits were doing all sorts of new deals. Trump would be quite welcome in their company 😂😂😂😂
I really miss my colleagues now that we all work from home. Also, organising a get together is hard now because so many of us have left cities like London, Cardiff and Bristol to move to nicer countryside like the Yorkshire Dales, Cornwall and North Scotland.
Again, home working hurt all the INFRASTRUCTURE that helps office life do its job and do it well.
And, I don’t go to the cinema either when I used to go about once a month 😭
9 months ago
More thoughts and I’d better set up my own newspaper called the Foodie Times 😂😂🍴🤗
Having worked in pubs I have seen many trends and not all are good. You don’t tend to get ‘the lads’ like you once did. The lads are mostly military age men who binge drink on the weekends 🍻. I think a lot became Muslims. This is an important demographic, not just the price of beer. It’s over £5 a pint 😱
Most of the customers in my pub were there for EVENTS, a birthday, a wedding, an anniversary. All booked in advance and tables ordered. There was little spontaneity. Everyone kept within their groups and had sour looking faces. Well it’s hard to relax and be yourself with your Mother in Law watching 😂😂😂😂😂
The male bonding thing is still a real thing and young men can only find themselves through a shared initiation and boundary breaking.
Got another point:
9 months ago
Something to fill you in on is that every town and village in the British Isles has got a Chinese take away 🥢. I know lots of Indian, Italian and Greek restaurants as well and we all get on well and rivalries are nothing much. Soon every town and village will have a Mosque but again, let’s cut the rivalries and be nice. Halal food sounds up my street and no pun intended 😂. During Eid the food is distributed freely to all ☪️
An immigrant without much education and connections can always export his own cuisine and get happy regular customers. I love it. Excuse me but are there any British egg n chip restaurants in Beijing? 🍴. Why not try setting one up?
The happiness we knew when eating out, if it gets harder to accomplish thanks to rising costs, all sorts of regulations, supply chain woes and more, then we’ll only be very unhappy cooking microwave meals and eating them while watching television 📺
I can feel it in the pit of my stomach, not just a hunger but a hunger to keep restaurant and pub culture alive as something to be yourself in, meet new people and if you must take a few selfies in the restaurant don’t just post to Facebook, give the public page a like 👍
9 months ago
What seems to be happening is a subtle move towards a monoculture. Too many pubs and restaurants have closed and now business goes the way of Macdonald’s and Wetherspoons pubs who can achieve economies of scale when some Mom and Pop business just couldn’t.
In this monoculture it will end up being a lot easier to get everyone to conform to whatever mandates are being promoted, be they to do with the virus, Ukraine, Israel or anything else. This is because anyone looking, sounding or being any bit different will be criticised. I just don’t like the thought of something like that.
9 months ago
"When you arbitrarily raise the cost of something (labor) you end up getting less of it." Economist Dr. Milton Friedman. A Big Mac Combo is now $18.00 since the $20 minimum wage passed. Every fast food chain in Calif has cut hours and people because of it. Prices are up 35%-40% everywhere. The losses and closings will continue to mount!!