Welcome to $19 Dollar Salads, Or: The Coming Restaurant Industry Implosion No One Talks About
Oh how we laugh…...
David C Mau
Twice a month, legendary bartender/chef/restaurant insider Dave Mau pops by Stick A Fork In It to chime in about a random OC food or drink musing of his choice. Enjoy!!
There's a lot of talk going around about the upcoming apocalypse on the monetary side of the restaurant industry. "Apocalypse" might be a little alarmist—that particular term is usually reserved for events like planets crashing into each other, mass human extinction or Donald Trump becoming President of the United States. But what is true is We in The Biz are going to have to change our mindset and financial models if we are gonna keep the doors open and our employees.....well....employed. Oh, and our customers coming back for more.
Let's get something straight. The restaurant "apocalypse" has been going on for decades. When we are making money (if we are at all) we are making very little. We operate on the thinnest of razor thin margins and any change in our operating costs can put us right in the proverbial shitter. No joke. We in The Biz are vexed and scourged by all sorts of random financial burdens, each cut seeming like a slow death by torture when each small injury piled one upon another turns into something greater than the individual parts. Broken glassware, spoiled food, and random repairs—my favorite: fridge door gaskets. Those bastards break more often than you'd think!—are just a few examples. And everyone, from the city to ASCAP, has their hands out looking to grab what stray few extra bucks we might have left in our pockets.
Oooops! This is a bad sign.
David C Mau
Politics aside, a lot of federal and state laws have really cut into our bottom line recently. From the new minimum wage, Family and Medical Leave Act, and health care costs, 2016 really walloped the industry. Of course, these costs get passed onto our clients if we are to have any chance of staying open, much less feeding our kids or paying the rent. And, believe me, we are all quaking in our boots about when this $15-an-hour thing is gonna start, even if we’re not talking about it. Also, in recent years, ambulance-chasing lawyers have been suing mom-and-pop shops for not properly breaking their employees—over the course of years sometimes. This not only hits these places with the cost of settling the suit but paying an extra body to be in the building to handle the situation. FYI: unless you are working a corporate or union shop, there is no such thing as a designated break. You work when you need to work.
Also, apps like Uber Eats and GrubHub are gonna change the way people eat—and don’t even get me started on drones delivering food like something out of Blade Runner. This is where things are going to get dicey. What might otherwise be a perfectly fine dinner house could be turned into a glorified In-N-Out with the advent of these new technologies. It will also affect server retention. Most of these services don’t tip, so qualified people won’t stick around. They’ll go work for a purveyor. Some foods obviously travel better than others, but I bet we’ll see methodologies to mitigate that factor.
This is the fun part. The rest? Not so much.
David C Mau
Speaking of gratuities, there has been a recent push to change to a more egalitarian model, with a “service charge” instead of standard American tipping. The tip as it exists now is deeply ingrained in our culture. I always tip in Greece and it’s not because I have to. It’s because nobody else does, which means free-flowing wine all day for me and wifey when we stay in Corfu. But the service charge concept has proven difficult for people to get their heads around here in the OC, and I don’t think the concept is sustainable—at least for now. Most shops that have tried have abandoned the idea, all while keeping their prices where they were when they added the service charge. I guess they got used to the income stream.
At the confluence of these factors is where The Biz as we know it has a chance to shatter and fragment like
subatomic particles at the CERN atom smasher. It may take time but the ceremony and necessity of dining will be drastically different soon enough, mark my words.
What will eating out look like in 10-15-20 years? That's a good question, but I'm sure it will be a much, much different beast. One thing is certain. The Mayberry Era of the restaurant industry is about to come to a grinding halt. The very worst, and I mean worst, situation you can be in owning a restaurant is being reactive to market situations instead of being proactive. Many of us in The Biz rest on our laurels while more agile shops evolve and even make decisions ahead of the curve to stay relevant and profitable. Those are the ones that will rule the coming fortunes of what we now know as the restaurant industry, if there is one at all. None of us are Obi-Fucking-Wan-Kenobi, able to peer into the future to assess every fork in the road. But we can at least give it our best shot to make smart, adaptive decisions. That is what will separate the wheat from the chaff in the upcoming restaurant revolution.
You have been warned.
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