Rubio’s Coastal Grill to Close 48 California Restaurants: Laments Rising Wages and Inflation

Rubio's Coastal Grill to Close 48 California Restaurants: Laments Rising Wages and Inflation

During his time off in Baja California, Ralph Rubio, a college student in San Diego, stumbled upon fish tacos and was instantly hooked. In 1983, he started a small walk-up stand, which played a significant role in making fish tacos popular across the country. Over the past decade, his business, now known as Rubio’s Coastal Grill, has expanded to approximately 200 restaurants in California and several other states.

However, the company was greatly impacted by the pandemic, leading to the closure of its restaurants in Florida and Colorado. Rubio’s has faced challenges in the fast-casual segment due to competition from Mexican restaurant giant Chipotle. Not to mention the expenses: soaring food prices and growing worker wages.

Rubio’s recently announced the closure of 48 of its California restaurants on Friday, which accounts for over a third of its current chain of 134 restaurants.

Rubio’s, in a statement released on Monday by media strategist Sitrick & Co., cited the increasing expenses of operating in California as the reason for the closures.

The company provided limited details about the closures, leaving some workers surprised. However, they did mention that the closures were due to underperformance. The decision was made two months after the state’s $20 an hour minimum wage was implemented for fast-food employees.

The company statement mentioned that the decision was made after carefully evaluating its operations and considering the current business climate. A spokesperson from Sitrick stated that no executive from Rubio’s would be able to provide a comment.

The closure is another indication of the challenges faced by the restaurant industry, which has been impacted by inflation and increased labor expenses.

Restaurants are also noticing a decrease in consumer spending, especially among households with lower incomes. Unemployment rates have surged in California, with a significant number of consumers accumulating more debt as they deplete their savings that were previously boosted by pandemic stimulus checks.

Rubio’s did not disclose the number of employees affected, but according to comments shared on social media by employees, they were caught off guard as they received no prior notice. Some mentioned receiving phone calls over the weekend informing them that their positions had been terminated.

Rubio’s plans to continue operating its 86 remaining locations in California, Arizona, and Nevada.

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