It's always tough times in the restaurant business. The margins are razor thin. Many operate more out of passion than profit.

Local restaurants that have been open for decades have been struggling over the past few years in my area (east side of Indianapolis). From talking to one owner, meat prices in particular took a dramatic jump ~5 years ago, but I don't know how accurate/relevant that is.

One was bought, moved, and closed a few months later. Another eliminated dinner. A third, open 24x7 for 40+ years, reduced their hours and then closed entirely, although that appears to be as much poor management as anything.

Quite depressing. I like supporting local restaurants, but painful to get attached to something that's likely going to die.

One thing I've noticed is the old places that start going out of style all start to become run down and less focus is on cleaning the place. If a place looks dirty people won't trust the food - especially if you're charging enough to actually make a profit.

The old joke is "How do you make a small fortune in the restaurant business? Start with a large one".

this is clearly not true in all cases; i think the more likely story is that like most industries, 80% of the profits are taken by 20% of the firms.

also, salaries don't count toward margin so i wouldn't be surprised if most owner/managers make a reasonable living (albeit with long hours) even if their businesses aren't very profitable on paper.

What statement is "clearly not true in all cases?"

tautologies?

A restaurant can have their rent doubled or tripled in a market like NYC, making profit for almost any food business impossible.

Lots of beloved spots have closed down here and have been replaced with condos and drug stores.

Even aside from this, and as others have pointed out - restaurants operate on razor thin margins. A large confluence of variables, some more controllable than others, need to come together in just the right way for a restaurant to have a chance of succeeding.

Clearly the rents are too low even in the West Village. Bar Sardine and Fedora still have audacity to insist that one cannot order a glass of wine at the bar without checking in with a pretentious hipster with attitude at the door when the customer is already inside at the bar just wanting to get a twenty dollar glass of wine. It is as if someone forgot to tell the "management" who is a profit and who is the overhead.

The issue with most of restaurants is that they do not operate like businesses: people who own them think there's something special about service that they offer.

Restaurants fail because their product sucks or the restaurants overcharge for the type of product that they have. That's why a $3.50 for a quart of noodle soup Chinese place manages to stay open in the high-rent area of Manhattan while a place with a $22 burger that comes with a sprinkle of attitude from an "artist" who just happened to wait tables flops.

I think the rise in delivery-only places and food trucks makes a lot of sense in that context.

I know a restaurant that is fantastic. It seats hundreds, yet they all feel private. The decor is meticulous down to the last detail. Theirs fresh flowers on every table, they serve dishes from a hundred lands. No dish takes longer than 10 minutes from order time, and, no dish costs more than $20. They have the most extensive wine list in North America. They have free valet parking, in fact, if you don't have a car, they'll send a limo to pick you up and, bring you home, free of charge.

They went out of business though.

Their food sucked.

How can a restaurant have such service (limo from- and to- home??) and have bad food?

I mean, I can imagine the food being "just good" (not great). But sucky food? With such a great wine list?

Something sounds terribly off with the.management of that buisness.

Can you share the name? Or is it something like a chain restaurant?

I think the story is meant to be allegorical.

Ah.

It might be. Didn't think about it that way.

Well it sounds like they were also jetting money out of every artery.

Peoples' definition of "reasonable price" in my area is effectively a price at which the restaurants have to either sell at a loss or lower their quality. I can't believe how many reviews I see where people call a restaurant overpriced because they can make the same dish cheaper at home. Any restaurant who sells you a meal for the same cost you could make it at home is going to be out of business very quickly.

> I thought to survive in tough times a restaurant just needed to provide great food at a reasonable price.

Right, so tough times means you can either do the great food or the reasonable price, but not both, and it's very hard to choose one of the two.

Sometimes a bad location really can sink you. A new restaurant with great food at reasonable prices also may not catch on soon enough for a number of reasons and get dealt a kill date.