The Other Critics

The Economics of Big-Box Dining

Buddakan’s big boxPhotograph courtesy Buddakan

Regina Schrambling’s long L.A. Times feature on New York big-box restaurants might be a must-read for observers of the New York dining scene. Although better known as her brilliantly arch and caustic blog Gastropoda, Schrambling is a rock-solid food reporter when not in harridan mode, and she helps get to the bottom of a basic question. How, in a city where even small spaces are astronomically expensive, can it pay to open a restaurant the size of a bus terminal? The answer is volume, but the how and why of the way restaurants like Morimoto, Buddakan, and the Hawaiian Tropic Zone operate might not be immediately apparent to readers who don’t know a lot about the restaurant business.

The fact is that the food in high-end restaurants is basically a break-even proposition at best. The better it is, the more it costs, and the less you can make from it, even at high prices. But if you sell a lot of food (Schrambling estimates that 900 diners may be served on a Saturday night at Buddakan), even a small profit is multiplied many times over and becomes big. Add in wine and liquor profits — the actual lifeblood of any restaurant — and you go from being in the black to making huge profits, more than enough to justify an immense investment. That’s what Hawaiian Tropic Zone executive chef David Burke means when he says, “you’ve got to do turn-and-burn, or charge super-high prices.” And when you can do both, then the money starts really rolling in. The moral? Expect more big-box restaurants on the way.

Dining Supersized for Fun and Profit [LAT]

The Economics of Big-Box Dining