Rubio's closing 48 locations because of "rising cost of doing business in California"
Rubio's Coastal Grill, a beloved restaurant chain known for their fish tacos, has announced that they will be closing 48 locations in California due to the "rising cost of doing business."
"The closings were brought about by the rising cost of doing business in California," said a statement from a Rubio's spokesperson. "While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio's for success for years to come."
Of the 48 locations, which represent about a third of the Rubio's found in California, Nevada and Arizona, 24 are in the Los Angeles area, 13 are in San Diego — where the company is headquartered — and 11 in Northern California.
The decision has caused disappointment amongst residents who enjoy the "Fresh Mex" style of food, but experts say it's not surprising — especially after minimum wage jumped from $16 to $20 an hour.
On top of that, Rubio's had filed for bankruptcy in 2020.
UCLA economist Brian Wheaton says this is the exact type of company that's vulnerable to increased costs of any nature.
"Those business that are ... not doing very well, near the shutdown margin, this increase in costs when they try to pass it on their consumers, ... it may be the thing that pushes them over the edge into a situation where they go out of business," Wheaton said. " I think that's the sort of thing we're seeing in the case of Rubio's."
The company has not yet disclosed how many workers are losing their jobs with the abrupt decision.
Wheaton says the disturbing trend is just that, with about 10,000 fast food workers losing their jobs in the last nine months in the Golden State.
"What the research tells us is that once you get up to higher minimum wages and large increases, for example going from $16 to $20 in one jump, that's when we tend to see pretty large or larger disemployment effects," he said.
Despite the closures, 86 locations are expected to remain open in California.