San Diego, California – Rubio’s Coastal Grill, a popular California Mexican restaurant chain, recently announced the closure of 48 locations in the Golden State due to rising business costs. The decision comes as California implemented a $20 minimum wage for fast-food employees, leading to challenges for many restaurant chains across the state.
Despite the closures, Rubio’s Coastal Grill will continue to operate 86 remaining locations across California, Nevada, and Arizona. The company stated that the store closures were a necessary step in their long-term plan to position the chain for success in the years to come.
The announcement of the closures came after a review of operations and the current business climate, which led to the difficult decision to shutter nearly one-third of the chain’s restaurants. The founder, Ralph Rubio, did not disclose the number of employees affected by the closures, but the company cited underperformance as a contributing factor.
In addition to Rubio’s Coastal Grill, other restaurant chains in California have also faced challenges amid wage hikes, inflation, and other negative factors exacerbated by the COVID-19 pandemic. Red Lobster, for example, recently announced the auction of over 50 locations nationwide, with California and Florida losing the most locations.
Several fast-food locations in California have already terminated workers ahead of the implementation of the $20 minimum wage law. The impacts of the wage law have been felt particularly by pizza chains, with some cutting jobs in an effort to mitigate financial repercussions.
Supporters of the minimum wage law argue that many fast-food workers are not teenagers working their first job, countering claims made by opponents of the wage hikes. Despite the challenges faced by the restaurant industry in California, companies are striving to adapt and find ways to navigate the evolving business landscape.
As businesses continue to adjust to the changing economic environment, the implications of wage laws and other regulatory changes on the restaurant industry remain a crucial topic of discussion among stakeholders. The closure of Rubio’s Coastal Grill locations serves as a stark example of the challenges faced by businesses in navigating a complex and evolving business environment.