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Marc H
Social Studies Editor at Great Source Education Group; owner of a regional restaurant review Web site
How Are Independent Restaurants Able to Stay Open in Boston, New York, and Other Major Cities With the Rents So High?
I just got word that one of Boston's most beloved spots--Milky Way Lanes/Bella Luna in Jamaica Plain--will be moving from its present location in the center of JP because their rents are being raised by 85%, to $24,000 per month (from $13,000). I also have heard other horror stories, including a small Chinese restaurant in a middle-class Boston suburb paying $30,000 a month, and of course, we all know about CBGB in New York--I believe they were going to have to pay upwards of $40,000 or even $50,000 a month?
My question is, how do restaurants stay in business in places such as Boston, New York, San Francisco, Washington, DC, and other high-rent areas? It boggles the mind how much some of these places have to pay.
Answers (2)
That's easy. They can't and they aren't. They are moving to areas that are affordable given their concept.
You can only raise prices so much while trying to keep occupancy costs under 10%.
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Aric R
Business Executive and entrepreneur with multi-unit operations and marketing background
Best Answers in: Small Business (7), Business Development (1), Customer Relationship Management (1), Lead Generation (1)
That sounds like a great article for your website in the making. "Why are restaurant prices so high"? "Support your local eatery". Might bring increased traffic to your site.
Of course, this would need some research and interviews with the ones who can best answer the question - the operators themselves. Write an article that talks about what "Iron Chef" or "Hell's Kitchen" skips - the real life dollars and sense of what it takes for a great restaurant to make it, and why other great restaurants don't.
BTW - many restaurants will partner with the building owner to form a win-win partnership that would preclude pricing the restaurant out of business.