Rubio's Coastal Grill, a popular restaurant chain known for its fish tacos, has announced that it will close 48 locations in California, citing “rising costs of doing business.”
“The closures are due to the rising costs of doing business in California,” a Rubio's spokesperson said in a statement. “While painful, these store closures are a necessary step in our long-term strategic plan to position Rubio's for success for many years to come.”
Of Rubio's 48 stores, about one-third of its total stores in California, Nevada and Arizona, 24 are in the Los Angeles area, 13 in San Diego, where the company is headquartered, and 11 in Northern California.
The decision caused disappointment among residents who prefer “Fresh Mex” style cuisine, but experts said it wasn't surprising, especially after the minimum wage jumped from $16 to $20 an hour.
On top of that, Rubio filed for bankruptcy in 2020.
UCLA economist Brian Wheaton says this is exactly the type of company that's vulnerable to any kind of cost increase.
“For businesses that are struggling and on the brink of closing, trying to pass on increased costs to consumers could force them out of business,” Wheaton said. “I think that's exactly what we're seeing in Rubio's case.”
The company has not yet said how many employees will lose their jobs as a result of this sudden decision.
Wheaton said about 10,000 fast-food workers have lost their jobs in California over the past nine months, a worrying trend.
“What the research shows is that when the minimum wage goes up and you have a big increase, like going from $16 to $20 in one go, you tend to see a pretty big unemployment effect,” he said.
Despite the closures, 86 stores are expected to remain open in California.
