The shocking state of the restaurant industry: ‘We can’t afford to be open. We can’t afford to be closed’
LOS ANGELES -- In October, Lauren and Peter Lemos locked the doors of their Chinatown sandwich shop for what they thought would be the last time. In late March they flipped Wax Paper’s lights back on — not due to newfound success or a windfall but because they couldn’t afford to shut down.
“After closing Chinatown we realized we still have our lease, we still have our [federal] loans from the SBA, from COVID, the bills are still coming in,” Lauren Lemos said. “We can’t even afford to close. We can’t afford to be open, we can’t afford to be closed.”
Wax Paper’s husband-and-wife team are hardly the only ones facing economic crises. Interviews with more than two dozen chefs, restaurateurs, policymakers and advocacy groups revealed pointed concern over the state of the service industry, and questions of longevity — especially in light of 2023, a particularly difficult year for restaurants in Los Angeles.
The year was marred by entertainment industry strikes that affected the service industry throughout the region; pandemic-era loan and rent repayments coming due; and inflation of ingredient prices and services such as kitchen repair. L.A. restaurant closures included those from some of the country’s most celebrated chefs. Nancy Silverton shuttered the Barish; Walter and Margarita Manzke closed Petty Cash Taqueria and Sari Sari Store; Daniel Rose shut Café Basque; and Jean-Georges Vongerichten closed his eponymous restaurant in Beverly Hills.
The Lemoses’ second location of Wax Paper, where heaped sandwiches named for NPR hosts and a small diner-style counter always saw a colorful lunchtime crowd, was hemorrhaging money.
On a good day, post-pandemic, they would break $2,000 in sales — though Lauren Lemos estimates that they should have been making between $4,000 and $8,000 for their business model to make sense. In 2023, some days they didn’t break $1,000 in sales — which wouldn’t even cover the cost of the shop’s labor.
The duo considered moving money from one restaurant to another, but with their Frogtown restaurant, Lingua Franca, also
