My Thoughts On- EaterLA’s Article “Report Says LA Restaurants Are Teetering on the Edge of Failure”
Here is something I recently found interesting; this article is the first I am seeing citing social media / digital marketing as a reason for restaurants closing. I can’t imagine people spending 100s of thousands of dollars on getting into the restaurant business on a whim only because they think the restaurant business is booming on Instagram. I suppose anything is possible, but usually, restaurant owners get into the business for the love of it, they love to feed people and create space for the community to come.
What I do see often these days is all the closures. Almost every day, EaterLA sends out a list of the latest casualties. The truth is that only the notables are listed, many more are closing under the radar.
I am not an expert, but my business is focused mainly on small restaurants. What I am seeing and hearing is more about the rising cost of labor and rents. Not social media.
The impact the delivery apps such as Uber and Postmates are having on restaurant profit may be a factor as well at times. Restaurants run on a pretty small margin, with Uber taking a whomping 30%! I often wonder if it makes sense for them to even be on these apps. Honestly, if you’re not making money who cares how much you’re selling?
The other side of the whole ‘all food becomes delivery food’ mentality is that the guest experience is lost. The food shows up cold, a mess, and the presentation is nonexistent; the experience is gone. I can’t imagine that poor delivery wouldn’t result in lost in-store business, as well as an overall loss of affinity for the brand.
It usually only takes one or two times before I assume the restaurant isn’t good anymore. Not to mention with all the fees tacked on to delivery, it’s very costly.
The industry is changing. Eating out and eating in is becoming more of a luxury as many restaurants struggle through all these changes.
It will also be interesting to see how cloud kitchens change the industry. These are basically a restaurant that only offers delivery, no storefront, no sit-down, a quarter of the staff.