More restaurant closures have been announced in St. Louis. The restaurant industry remains plagued by low sales and a lack of staff.
ST. LOUIS, MO (StLouisRestaurantReview) As reported by STLMag.com, six restaurants closed at the end of the year or the beginning of 2025. We have predicted this downturn for a few years, and I am sure some people wish they had listened to our prediction. Our forecast was based on political, economic, and social changes that take time to filter into our society.
In good times, restaurants struggle to profit due to poor accounting practices, which result in underpriced menus and slashing margins.
The scary thing is that people are expecting this staffing change in our social system to change. Will it change? We do not think so
Restaurant closures in late 2024 and early 2025 in St. Louis, MO, are as follows:
- Daylight Donuts – Chesterfield, MO
- The Reserve Restaurant & Lounge – Creve Coeur, MO
- In Da Loop – Delmar Loop
- Dado’s Cafe – Dado’s Hill
- City Grill – Delmar Look
- Peacock Loop Diner – Delmar Loop
Three on the Delmar Loop. Why is that? We are not sure, but we have suspicions that might be the correct answer, which we will reserve for now.
On the positive side of these and other closures in the restaurant industry, more restaurants are opening than are closing, but even they are failing faster than expected due to the same issues. The positive note is that there were too many restaurants before the pandemic, and very few were making money. As more restaurants close, the individual slice of the pie becomes more significant for those that remain, giving them the pricing power to charge what they need to make a respectable profit. We always have said that restaurant owners need to “know your numbers.” Unfortunately, most do not, and many do not have regular accounting to give them the intel to make good choices.
Just because you can and love to cook does not qualify you to operate a restaurant. Due to the overwhelming number of moving parts, restaurants have one of the highest failure rates, primarily due to a lack of business knowledge or skills, such as proper accounting procedures.
The lousy restaurant operators will disappear forever, while the good operators should prosper and thrive in the daily, ever-changing economic, political, and social changes, assuming they remain flexible and quickly adapt.
Our best advice is to leverage affordable technology to reduce staff pressures, reduce the need for dine-in, and “KNOW YOUR NUMBERS.” We recommend Quickbooks. It integrates with your bank to download transactions automatically, which most bookkeepers don’t utilize, overcharging for work they don’t need to do. It makes payroll easy, and properly learning how to categorize your expenses gives you an incredible insight into your operation almost in real-time, allowing you to react to necessary menu price changes to maintain your profit margin. If you have questions, Quickbooks has an incredible support system. Become an accounting guru. Quickbooks make it easy.
Additionally, ensure that you comply with US Department of Labor rules. The agency has announced a nationwide initiative regarding the food service industry, addressing excessive labor violations discovered in every restaurant it audits. If you cut corners thinking you must do to survive, count yourself out and failed.
STL.News published press releases regarding the enforcement action the US Department of Labor takes to enforce rules and protect employees. As you can see, the price tag for these errors is expensive, whether intentional or not.
Will restaurant closures continue? Rest assured that restaurant closures will continue for an extended period. Next, new restaurants that recently opened, such as Constantino’s, that have recently opened and closed will continue to increase the failure rate. The industry is purging itself of excesses and lack of foresight. This will take some time! Months, maybe years.
