San Francisco restaurant facing closure after 20 years — all thanks to high costs and shifting dining trends
Rent prices in San Francisco's Mission District have remained high above the national average for many years. On average, it costs $3,397 to rent a place to call home in San Francisco. And for business owners, rent prices have been a major strain for years.
But for some businesses, a recent rash of rent hikes represents the straw that broke the camel's back. In particular, Aslam's Rasoi on Valencia Street currently faces a 52% rent increase starting in May, according to a CBS News report.
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The significant spike in the family-run restaurant's operations costs has staff considering whether or not it's possible to continue serving up the dishes that have been a staple in the community for almost 20 years.
Aslam's Rasoi opened its doors in 2006. Although it's survived many ups and downs in the economy over the last 20 years, operating a restaurant in a post-COVID world makes staying afloat more challenging than ever before.
CBS News reported that on top of the 52% rent hike the restaurant is facing as of May, co-owner Sonia Aslam says slower sales and higher ingredient costs influenced her family's decision to close the restaurant in its current location.
Since the pandemic, Aslam told Mission Local, the restaurant started operating with a scaled-down crew of just a few family members.
On top of higher operations costs, Aslam Rasoi has seen foot traffic decline. Of course, some of this decline is related to the shifts in diner habits after 2020. But nearby traffic on Valencia Street has decimated foot traffic for Aslam Rasoi and other businesses in the neighborhood.
In recent months, the restaurant has remained open with financial support from family members. When the lease is up, the owners must decide whether to close for good or find another location.
'It's just sad seeing the business struggling to this extent,' said Aslam. 'We've tried to keep the restaurant going for all these years. We sacrificed all our time. We put our love into the business.'
Aslam, whose father-in-law opened the business in 2006, says the restaurant's best hope would be an uptick in business over the next month or two. A bit more business would help the family feel more confident about moving to another, more affordable location.
And if they do reopen, they'll likely join the many restaurants offering limited hours and a pared-down menu to maintain profitability during a tough climate.
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The restaurant industry has always been a competitive business. But since the pandemic, dining habits have shifted dramatically. Consumer habits show people are generally opting for more take-out, drive-through and online ordering over in-person dining experiences.
'In the food service industry, the ways people order has shifted mostly to non-human contact or untact methods, such as online orders and drive-through orders,' according to a 2021 study.
Restaurant owners trying to keep up with the trend of less contact might choose to offer an easier way to order food online. Additionally, they might put more staffing behind takeout orders to keep pace with demand.
In addition to changing preferences, inflation and a [rising cost of living]( put pressure on household budgets. As diners face financial stress, many may cut back on discretionary purchases, like dining out.
To keep diners engaged, restaurants might focus on providing unique dining experiences that people want to share online and investing in customer loyalty programs to keep regular customers coming back for more in spite of rising costs.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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