Despite a growing industry, more independently-owned restaurants are closing down and being replaced by chain establishments. A major culprit is skyrocketing rental costs, especially in high cost of living cities like New York.
According to Gothamist, a lease for a Midtown restaurant can be as much as $70,000/month and last year a Williamsburg's restaurant, Nita Nita, shut it's doors after rent tripled to $24,000/month.
Money is tight enough without having to deal with rent bigger than most people's annual paycheck, but restaurant operators are still reluctant to raising menu prices, something restaurateur David Chang says needs to change.
"I sell that ramen for $17, because if I charged $28, people would say it’s too expensive," he told GQ. "It’s on us, as restaurateurs, to get better at running our businesses (and break fewer plates), but the bottom line is that food needs to get more expensive for you, too."
Cake or death
Instead of boosting prices, some restaurants are trying to politely usher their guests out the door as quickly as possible, freeing up the tables for new guests. More guests = more money, right?
No one likes seeing a bunch of people linger at a table while they wait to eat themselves, but according to The Washington Post, some restaurants are ditching dessert to get people the heck out of their restaurants.
"It's hard to make money on desserts in the restaurant business today," economist Tyler Cowen told The Washington Post about the "no desert" trend. "I don't think many [restaurants] benefit when people order them anymore... Dessert needs good ingredients to taste good, but you can't psychologically convince people to pay even $20 for dessert. You can't really go cheap on it, but you really can't charge extra either."
Should you rush your guests out the door?
According to a 2011 Zaygat survey, 60% of diners said they wouldn't mind explicit time limits during peak hours (no idea what happens if food comes out late).
The New York Times says it's a huge no-no. "Do not take an empty plate from one guest while others are still eating the same course. Wait, wait, wait."
On one hand, you gotta look out for your financials; on the other hand, alienating your guests is an easy way to find yourself closing shop fast. If you're stuck in a situation like some of these NYC restaurants, you're in a damned if you do, damned if you don't scenario.
So what should you do? It comes down to what sort of experience you want your customers to have. If you can somehow fulfill your guests' needs and still get them in and out the door efficiently, go for it. But the last thing you want is to make your guests feel like they're not wanted, unappreciated, and rushed. That's a recipe for disaster.
How are you keeping up with rising cost of rent? Let us know in the comment section below or contact us!