The Restaurant Industry’s Profit Margins Have Only Shrunk

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If you want to save the restaurant industry, you’re going to have to pay as a consumer, according to panelists at the Curbivore conference in Downtown Los Angeles on Friday.

During a panel moderated by dot.LA reporter Keerthi Vedantam, restaurateurs and founders weighed in on the highs and lows of the industry since the pandemic first shut down in-person dining establishments nationwide in early 2020.

While profitability has always been a challenge for the restaurant business, it’s only been exacerbated amid pandemic-induced supply chain and labor issues, according to Josh Kopel, a restaurateur and president of California Restaurant Association’s Los Angeles chapter.

“We can’t make any money and there are a variety of reasons why, but the biggest is that we haven’t figured out how to explain to you how much food costs in a way that will make you willing to pay for it,” Kopel said. “Your burger costs $24—it just does.”

What’s more, online platforms like DoorDash and Uber Eats have faced criticism for cornering the market for online ordering and deliveries while charging hefty fees. In turn, some restaurateurs have opted instead for emerging platforms like Snackpass and Shef.

Restaurant tech journalist Kristen Hawley noted that third-party apps are “building a wall” between the customer and the restaurant, even as consumers become more aware than ever of the industry’s razor-thin profit margins. She and other panelists urged customers to talk to restaurant owners about how to support them to keep the industry afloat.

Heather Kuklin, founder and chef of gluten-free vegan bakery Madame Shugah, noted that she sometimes gets grief from customers for charging $7 for a moist loaf, her version of muffins.

“They think I sit around with influencers all day while fairies are making my s—, but here I am with carpal tunnel,” Kuklin quipped.