Operating restaurants in Southern California remains a struggle, with many still recovering from pandemic losses. Rising food and labor costs, coupled with minimum wage increases and the lingering effects of entertainment industry strikes, are contributing to the difficulties. Several acclaimed restaurants have already closed in Los Angeles, highlighting the severity of the situation. This article outlines the top seven challenges restaurants are likely to face in 2025, with a particular focus on the escalating labor costs.
Operating a restaurant in Southern California continues to be a difficult endeavor, with many establishments still struggling from pandemic losses. Food and labor costs increased in 2024, remaining by far the largest expenses of running a restaurant, according to the Independent Restaurant Coalition. And the minimum wage is set to increase again in California starting in the new year — to $16.50 an hour.
Some already complain about prices on the menu, she said. “I think we have to have a conversation with the public about what food really costs,” Kansteiner said. As use of cash in everyday transactions fades, credit cards have become the de facto way to pay for meals, and that means card transaction fees have become a growing monthly expense for restaurant operators. The fees are particularly a burden on smaller independent restaurants, which already operate on the slimmest of profit margins.
RESTAURANTS LABOR COSTS MINIMUM WAGE PANDEMIC RECOVERY FOOD COSTS
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