The American restaurant business is a bubble, and that bubble is bursting. I’ve arrived at this conclusion after spending a year traveling around the country and talking to chefs, restaurant owners, and other industry folk for this series.
In a series of articles for Thrillist, Kevin Alexander makes the case that our very own golden age of restaurant dining is coming to an end. The reasons are many. For starters, there are too many similar, hip restaurants competing for the same customers. Everyone wants in on the Food Revolution. But new ideas are hard to execute and sell, and the plethora of wanna-be pretenders are soaking up too many dollars. In addition, all those restaurants need chefs so there is a real shortage of qualified people to work in kitchens and that drives labor costs up. And that in the end is the real problem.
Across the nation, restaurants like AQ — chef-driven, ambitious, fine-casual dining spaces that straddle the gap between neighborhood fixtures and destinations — are the ones closing their doors most quickly, mainly for a reason above: labor costs. And it’s happening everywhere — research firm NPD Group reported that in 2016 the number of independent restaurants in the US dropped 3%, while chains increased, and said the majority of those independent restaurants closing were sit-down. The reasons the costs are going up are complicated, involving a mix of laws and taxes and other inherently unsexy things.
As Alexander points out, everyone supports better wages and benefits for restaurant workers. But it’s becoming apparent, according to Alexander, that restaurant margins are too small to absorb higher labor costs so something has to give. And inflated, unrealistic consumer expectations are also part of the mix:
One of the unintended consequences of the Golden Age of Restaurants was unreasonable customer expectations for virtually every eating experience. “Customers now think life should be one endless brunch,” says New Orleans’ chef Cullen. “With freshly made bottomless mimosas.” It is no longer impressive that things are local, farm-sourced, and handmade — it’s expected. But, as Cullen explains, the rise of the Golden Age “scratch kitchen” (in which everything is made in-house), long a point of pride for fine-dining kitchens, isn’t usually financially realistic in the more casual kitchens.
And consumers expect all this without increases in prices.
Right on cue, of course, in larger cities the big money guys with their food delivery apps are swooping in hiring chefs and stealing customers from the sit-down restaurants.
And so gradually, but inexorably we will see fewer sit down restaurants and more “hip iterations of fast-casual restaurants, with smaller menus, counter service, and a skeleton crew of front- and back-of-the-house staff.” Of course, the Michelin-starred will survive and flourish along with the uber-efficient low end, fast-casual establishments. But, like the rest of society, the middle-class where a lot of the creativity in the food scene takes place is being hollowed out.
What’s the solution? Well we could start by recognizing that always seeking the lowest price has consequences. Quality is expensive. But don’t hold your breath waiting for that recognition to take hold.
In the end, the solution will be the one we always latch onto—technology. Welcome to the golden age of robot chefs.