DOWN TO BUSINESS: Struggling restaurants continue to close across NY


DOWN TO BUSINESS – His accountant told him it was “time to go.”

So said a restaurant operator in the Syracuse area, describing his decision to close the last of his 40-year-old spinoffs from a former national restaurant franchise that featured “American classics” like steak, chicken and seafood.

According to a media report, the owner, who once had four of the restaurants in Central New York, had been losing money at the last two, struggling with staffing, supply shortages and inflation when his accountant suggested he fold.

He’s not alone.

On Long Island, decades-old, family-run diners are closing. So is a large catering hall, dating back 50 years, which cited economic reasons for bolting its doors.

Ditto in the Hudson Valley and Western New York.

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Close to home, 50-year-old Harbor House Fish Fry in Clifton Park announced it will shutter this week, with owner Jason McQuade telling The Daily Gazette that costs had gotten “way out of hand.”

These are places that survived the last 2 1/2 years of COVID, that managed to outlive restaurant failure rates pegged by academics at 26% in the first year and 60% by year three.

But we’re in the midst of the worst inflation since the 1980s, due in large part to double-digit rises in food and energy.

At restaurants, wholesale food prices are up 16%, according to the National Restaurant Association. Labor costs are up, too, as are rents and utilities. Yet increases in menu prices average about 8%.

The result: “Profits are suffering,” says the association, which released a survey in late August indicating that 85% of operators say their restaurant is less profitable than it was before COVID hit.

The group reported last month that while September sales at eating and drinking establishments, which totaled $87.2 billion nationwide, continued the steady monthly growth seen most of this year, higher menu prices deserve the bulk of the credit.

Adjusted for inflation, average monthly sales in the July-September quarter were $1 billion lower than in the April-June quarter, the association said.

Asked this week about the recent spate of longtime eateries calling it quits, Melissa Fleischut, president and CEO of the New York State Restaurant Association, indicated that about a quarter of members who closed or sold their businesses since the start of the pandemic had been operating more than 10 years.

She recalled anecdotally that one sold because of staffing shortages and that another closed believing inflation sent prices so high that customers were lost.

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When state results from the August national survey were released, Fleischut said they showed Empire State restaurants were still struggling, now with higher costs on top of COVID hardships.

“The recovery is still ongoing for most, and many will never get back the lost revenue from the worst part of the pandemic,” she said in a statement then.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at  [email protected]

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