I noticed this morning that my local food blog, PortlandFoodAndDrink is reporting more restaurant closings about town. While many folks around the Northwest were surprised earlier this week when a number of local Chili’s locations were suddenly boarded up for good (due to tax fraud, natch), I’m wondering if the greater restaurant community is starting to fall victim to the astronomical food costs. WhiningAndDining.com chimed in back in February about local restaurant closings, while Ed Murrieta, of the Tacoma News Tribune, has noted a few closings around his town as well.
According to the latest Fitch Ratings release, financial stress is certainly starting to show within the US restaurant industry. In an article from Restaurant News Resource, many food conglomerates are feeling the strain. Indications include a decline in cash flow, debt restructuring, and structural changes in both individual management and the industry as a whole.
‘Increased commodity cost may be a structural change in the food industry. The global supply and demand dynamics for agricultural commodities may have permanently shifted, thus increasing companies’ cost structures for the long term,’ said Wesley E. Moultrie, Senior Director, Fitch Ratings.
Though many restaurants have a short lifespan, are we starting to see a universal change in food service? Could your local restaurant be the next to tumble? Have you noticed more restaurants in your area closing their doors?
EDIT: The Chow is reporting that famed Florent in NYC will be closing it’s doors at the end of June as well. Skyrocketing rent seems to be the culprit.