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Monthly Roundup: January 2020

New year off to a rocky start for some restaurants

We really didn’t want to be writing about this in February 2020.

We hoped all the difficult news for independently owned restaurants – businesses closing and owners walking away from the industry – was reported in November and December. Yet, this remains the most common headline of the new year and impossible to ignore: Restaurants are struggling and even closing – in many communities and in high numbers. 

In this story from Spectrum News 1, shared here in The Daily Prep List on Jan. 7th, one business owner in Santa Monica, California, laid out the reasons why so many businesses are having difficulty hanging on, pointing to “the minimum wage, the high cost, the high rents, the taxes.”

Four hundred thirty miles north of that city, small business owners in Santa Rosa are also struggling. Gerard Nebesky, owner of Gerard’s Paella Y Tapas, told Eater that he’s closing his restaurant, which has been the victim of “restrictive parking and a burgeoning homeless population.”

If you missed that story, shared here on Jan. 29th, you can check it out here: Well-Known Chef Blames Santa Rosa Officials for His Restaurant’s Demise. 

In California, it’s not just coastal cities where small businesses are struggling. In Sacramento, more than a dozen restaurants have closed or announced they’re closing in the last three months. In fact, the struggle isn’t isolated to California.

Some restaurants in Arizona made news in January when they added a surcharge to their guest checks as a way to offset the new wage increase mandated by Proposition 206. You can read more here.

In a recent survey, shared here from Restaurant Dive last month, 48% of operators said rising labor costs are a top barrier to improving operations. Employee turnover can also be costly, and was on the minds of the survey respondents.

Let’s hope February brings better news. We know that it’s likelier that any new restaurants will operate a limited-service rather than full-service model. Limited service may mean fewer jobs than full service, but that’s better than the alternative, which is that all these dark, empty store fronts will be replaced by no one at all.

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The Daily Prep Team

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