Author Topic: Restaurants - why?  (Read 275 times)

TheDrake

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Restaurants - why?
« on: April 21, 2020, 12:25:51 PM »
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Restaurants have grown from 25 percent of food spending in the 1950s to more than half, today. The shift has been accelerating: In the last decade, spending at restaurants and bars has grown twice as fast as all other retail spending, like clothes and cars.

But today there are simply too many places to eat, according to Victor Fernandez, executive director at Black Box Intelligence, a restaurant data firm. “Half of our food dollar is now going to restaurants, but we have more supply than we have demand,” he said.

Couldn't we view the closure of a number of restaurants as the inevitable correction of a saturated market?

Meanwhile, restaurants with no seating were already taking off just before the virus hit.

Delivery Only Restaurants

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DoorDash's tenants include national chains, including Chick-fil-A, as well as Bay Area brands, such as the diner Nation's Giant Hamburgers.

None of them have actual restaurants or stores nearby, but the DoorDash facility allows them to deliver to Redwood City and neighboring towns.

This lets Rooster & Rice test new neighborhoods without committing a lot of money to a new restaurant and hiring waiters and other staff, Park said.

"In San Francisco, it could easily cost about $750,000 to $1 million for a medium-sized space," he said. "The commissary kitchen model" can generate similar revenue "at a fraction of the cost," Park said.

Is it possible our current situation is just going to accelerate a trend that was already happening? Bad news for servers that used to get a 20% tip for a $200 four top, but that's how things go sometimes.

rightleft22

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Re: Restaurants - why?
« Reply #1 on: April 21, 2020, 12:32:20 PM »
That's possible but might not be great for the economy

Interesting debates going on about how a trickle up economy is better then a trickle down one though I would argue for a balanced trickle up and down economy 

wmLambert

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Re: Restaurants - why?
« Reply #2 on: April 21, 2020, 01:41:57 PM »
...Interesting debates going on about how a trickle up economy is better then a trickle down one though I would argue for a balanced trickle up and down economy

Haven't really seen that debate. There is still the debunked Keynesian malarkey of demand-side economic pressures driving everything, but the supply-side still works. Restaurants offer entertainment as much as food. It is also a niche market. There are hundreds of Mexican food places in my area - but only one or two that offers tamales. Same with other niche markets. Everyone has their favorites, and unless the owners get too greedy and cut back on service, quality, and quantity in order to increase profits, tend to do well. I think of one location which has gone through multiple owners. When they first opened up, there were lines to enter the place, so you know it was a good location. Great food, great service, fresh bread and fruit on the tables, and reasonable prices drove traffic. The long lines made the owner think he might get away with cheapening everything - and then the waiting line disappeared.

Mickey D services fast food for cheap, but the pressure for higher minimum wages has made many franchises in my area go to self-service kiosks. Every fast food place is constantly looking to maintain clientele, The good ones always find a way.

Comparing dining choices historically is problematic. In Leave it to Beaver days, families had a one-income earner and a full-time home-maker, so food was bought, cooked, and served routinely. In today's era, everyone comes home to an empty house and orders out. Many families make it a point of pride to claim no one in the house even knows how to cook.