The $20 an hour minimum wage in California fast food has its first victim.
Mexican chain Rubio’s Coastal Grill is closing 48 restaurants in the state due to the “increasing cost of doing business in California.”
“While painful, the store closures are a necessary step in our long-term strategic plan to position Rubio’s for success in the years to come,” a Rubio’s spokesperson added.
The San Diego-based chain is known for its fish tacos.
Ralph Rubio discovered them while on spring break in Baja California, Mexico, and opened a stand selling them in 1983. In fact, he is credited with introducing them to Americans.
It grew to about 200 restaurants, primarily in California but also in four other states, before the pandemic hit.
Runio’s abruptly closed 48 restaurants in California, including this one in Santa Clarita.
A sign at the Santa Clarita restaurant.
The pandemic hit the chain hard and, along with competition from expanding chains like Chipotle, forced the closure of all of its restaurants in Florida and Colorado.
It filed for bankruptcy in the fall of 2020 and restructured.
This week’s 48 closures are just over a third of the 134 remaining in California, Nevada and Arizona.
Of these, 24 are in the Los Angeles area, 13 around San Diego, 13 and 11 in Northern California, including Sacramento and the Bay Area.
Experts pointed to the effect of the $20 an hour minimum wage for fast food restaurants in California.
“The initial thought that came to mind was that they would really be hit hard by this increase in the minimum wage for fast food workers from $16 an hour to $20 an hour,” said Alan Gin, an economics professor at the University of San Diego. NBC.
But Rubio also faces other problems. They have been going through economic difficulties for a long time.’
Orange County Registry reported that Rubio workers took to social media after learning of the closures when they reported to work over the weekend.
On Reddit, one wrote: ‘Former employee after today.
‘This morning when we showed up for work, we were rightfully told that today was going to be our last day. No compensation, no warning, nothing. I’m not sure exactly where they will go, but there are plenty of them.’
Another expert said Rubio’s falls into the category of chains that are large enough to fall under California’s government (having 60 or more restaurants nationwide) but not having thousands of locations to generate economies of scale and reduce fixed costs. .
Brian Wheaton, an economist at UCLA, said C.B.S. that a ‘cost surge’ like a $4 per hour increase in the minimum wage may be what pushes these fast food chains to the brink of bankruptcy.
He added: “I think that’s the kind of thing we’re seeing in the Rubio case.”
Rubio’s would not comment on which restaurants were closed, but a Reddit user provided a list of some of the closures around Los Angeles:
Adelanto, Anaheim Hills, Brea, Cerritos, Eastvale, Fountain Valley, Fullerton, Huntington Beach (Beach Boulevard), La Habra, Lake Forest, Lakewood, Long Beach, Marina Del Rey, Ontario, Orange (N. Tustin St.), Oxnard , Pasadena, Placentia, Rancho Santa Margarita, Santa Ana (on Highway 55 along 17th Street), Santa Clarita, Seal Beach, Tustin, Ventura and Whittier.
Another 12 closed in San Diego County.
Once DailyMail.com obtains a complete list, we will update the article.
Rubio’s is a fast-casual Mexican restaurant chain, making it more sophisticated compared to Chipotle, but below a full-service restaurant.
In recent months, there have been a series of bankruptcies that have added to the closures of restaurants and stores.
On Monday we reported how BurgerFi, which bills itself as an upscale McDonald’s, has raised concerns about mass closures after revealing it is considering filing for bankruptcy.
Bosses are considering Chapter 11 bankruptcy, which would allow it to break the leases on its worst-performing restaurants and sell their contents, as Red Lobster did last month.
In fact, Red Lobster closed nearly 100 after filing for bankruptcy in May.
National luxury coffee and grocery chain Foxtrot said in early April it was closing all of its stores with immediate effect, leaving staff and customers stunned.
Foxtrot, which was established in 2014 in Chicago, had 33 locations in the Chicago, Austin, Dallas and Washington DC areas.
Meanwhile, retailer Express, a mall staple, filed for bankruptcy in April and said it would close 95 stores.
