New York Restaurant Closings in 2017: High Rent and Labor Costs Led to Closure of About 100 Eateries

New York Restaurant Closings
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Outback Steakhouse, Joe’s Crab Shack, Howard Johnson’s and Other Restaurants Closing in New York City

Many famous restaurants in New York City have closed in 2017, the chief factor being the cost of running the businesses. Increases in rent and labor costs are making it hard for the restaurants to make money in the city.

Some restaurants, like Le Cirque and The Gander are closing because of high rent. Other restaurants, like Noodles & Company and Joe’s Crab Shack are closing because of other economic reasons. Chain restaurants like McDonald’s Corporation, Dunkin’ Donuts, Applebee’s Restaurants LLC, and Friendly’s are in the same boat, as they are not able to beat the competition. All these conditions may lead to a “restaurant apocalypse.”

A large number of restaurants in New York have shut down this year. The list includes:

  • TK Kitchen
  • Hill Country
  • Rebelle
  • GG’s
  • Sushisamba
  • Shun Lee West
  • 33 Greenwich
  • Sushi By Bou
  • Eatsa
  • Lupulo
  • A Voce
  • Francisco’s Centro Vasco
  • Nishi
  • Coup
  • The Lucky Bee
  • EMP Summer House
  • Jimmy’s No. 43
  • The Queens Kickshaw
  • Lam Zhou Handmade Noodle
  • Carla Hall’s Southern Kitchen
  • Parm
  • Schiller’s Liquor Bar
  • Les Halles
  • Marm Café
  • Reme
  • Bottle & Bine
  • Mi Nido Taverna
  • Swine
  • Golden Krust
  • Blue Ginger
  • Next Door
  • Riviera Cafe
  • Goa Taco
  • Roll It Up
  • Bulletproof Coffee
  • Fung Tu
  • The Whales
  • La Gamelle
  • Croxley Ales
  • Fat Baby
  • Parantha Alley
  • Franny’s
  • Turkuaz
  • Royal Soul Food
  • Florian
  • Hi Thai
  • Schiller’s
  • DBGB Kitchen and Bar
  • Georgia’s Eastside BBQ
  • Amaze Fusion and Lounge
  • Anthi’s Greek Food
  • Eastern Bloc
  • Mayahuel
  • Mr. Donahue’s
  • SobaKoh
  • Landmarc
  • Bouley
  • Polish G.I. Delicatessen
  • Express Thali
  • Grand Sichuan
  • N’eat
  • Salvation Burger
  • French Roast
  • A Casa Fox
  • Cafe Noi
  • T&R Pizza
  • Fika
  • Berkli Parc
  • Berlyn
  • San Loco
  • Shoolbred’s
  • Sons and Daughters
  • Sugar & Plumm
  • Grandaisy
  • Public
  • Barrio 47
  • Jacques 1534
  • Pala
  • Happy Ending
  • Moustache
  • Esperanto Fonda
  • Don Pedro
  • ABV
  • Village Pourhouse
  • Bread
  • Isabella’s
  • Craftbar
  • Pó 
  • Zabb City
  • Maple

Bloomin’ Brands Closings in 2017

In February 2017, Bloomin’ Brands Inc announced that it was closing 43 underperforming restaurants. It operates some 1,500 restaurants under the Outback SteakhouseBonefish Grill, and Carrabba’s Italian Grill brands.

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Joe’s Crab Shack Closings in 2017

Joe’s Crab Shack  suddenly closed  around four dozen locations in August 2017. The restaurant chain owner, Ignite Restaurant Group, had filed for bankruptcy in June.

Howard Johnson’s Closings in 2017

In 2017, Howard Johnson’s, an iconic American restaurant chain, closed its final location, which was in Lake George, New York. The company used to have 800 restaurants.

Higher Rent and Labor Costs Make New York Expensive for Restaurateurs

This year, some 20 restaurant chains and franchises have been on the verge of closing their outlets in New York, as they are not able to keep up with the growing competition. With some of the companies, the number of their locations have gone down significantly, to just one or two.

As mentioned earlier, the main factors responsible for New York restaurants closing in 2017 are high rents and rising labor costs. There was about a three-percent fall in the number of independently owned restaurants in New York from March 2015 to March 2016, and the number is going down day-by-day.

For survival in the restaurant business, a profit margin of at least 10% is expected, with the costs of real estate, labor, and food ingredients adding up to about 75%. A stable restaurant aims to spend about 10% of its sales revenue on rent, utilities, and other business-related expenditures; 30%–40% on labor (including taxes and benefits); and 30% on food and beverages. These three expenses account for most of a restaurant’s costs.

These costs in New York are higher than in any other city in the United States, like Los Angeles and San Francisco. If we compare the rent rates, in Manhattan and some Brooklyn neighborhoods, rent is about $120.00 per square foot, whereas in Los Angeles, the highest rent averages about $52.00 per square foot. In San Francisco, it’s only about $45.00 per square foot.

New York has the nation’s largest roster of independent restaurants. Growing rent and the labor costs are making it difficult for the restaurants to sustain themselves though. The closing of restaurants in New York in 2017 is a guideline for the existing restaurants to think on some measures which will keep their business safe.

Sources:

NYC Restaurant Closings,” Eater New York, last accessed December 22, 2017.

Is New York Too Expensive for Restaurateurs? We Do the Math,” The New York Times, October 25, 2106.

Restaurant apocalypse: Nearly 1,000 chain restaurant locations are now gone,” Clark August 18, 2017.

20 restaurant chains that are dead or dying in Upstate New York,” NewYorkUpstate.com, July 21, 2017.

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