Saturday, June 07, 2008

Local Restaurants struggling

My wife and I have been married almost 13 months. So we've decided to host a dinner celebrating our 1st Anniversary with immediate family and the tinniest number of friends. We think this will cost an even thousand dollars to pull off.

The restaurants are desperate for our business in the 90274 and 90275 zip codes. What? This is only a grand! We decided to go with a local restaurant, family owned, in the 90275 that my parents have been going to for almost its whole 31 year history.

The owner of that restaurant almost sighed with relief when we made the deposit. He mentioned a few times how "the economy" was impact all the restaurants. At first I wasn't listening too much (it was about our dinner, I wasn't in 'blogging mode.') But then I started to notice something.

1. He listed off a series of corporate customers that once upon a time two to three times a month clients for the same room we're going to rent out. Most I had never heard of (mostly small import/export companies). But one was local Realtor (shock, not!) and the big client was Toyota. (huh? I guess the pickup business is creating corporate wide cost cutting.)

2. He mentioned a few friends of my family that have cut back too. This is sad. Nothing more really needs to be said.

For those that think the core areas won't be hit hard, this suggests strongly otherwise. People might not have to sell, but the surplus of available rentals means no one has to buy either.

There is also a huge disconnect in the 90274, 90275, 90277, and 90278 between the number of homes listed and the number of Realtor signs planted on the front lawns. I cannot prove anything, but I think we've reached the stage where the shadow inventory is of the same order of magnitude as the 'official MLS inventory.'

My wife and I have decided to stop going to chain restaurants and focus 100% on the family owned ones we love. We've even decided to focus on the small number we'd really miss if they disappeared. Since we only eat out once a week, we're not going to change their future. But I ask my fellow readers to think about where they spend their money; which businesses to you want to be around through and after this downturn? We've decided that the local restaurants with local personality are far more important than a chain that could be replaced with another chain restaurant. I did not expect 90275/90275/90277 to be hurting like this yet. Not to where all of the restaurant owners are hurting.

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bearmaster said...

Hi Neil,

Congratulations to you and Nancy for hitting the one year mark!

We are definitely going to have to hold a bubble blogger celebration when we see the Los Angeles housing market hit some kind of key milestone.

Maybe we should brainstorm what the milestone should be.

Median price down 40%? When monthly cost to own at 30 year fixed = cost to rent? Major newspaper headline about an exodus out of the area?

I've been working part-time at South Redondo PETCO as a dog trainer (in addition to my normal full-time "day job" as a software developer at UCLA). Only enrollments in dog training classes have plummeted, so I'm not doing much.

This is looking to me like things are shaping up to be a Depression.

wannabuy said...


Thank you. :) I wish I had more time to organize another dinner. Life is crazy!

Its interesting that dog training has also plummeted. :( We really want to get a dog! More precisely, I really want a dog and my wife will accommodate.

It is scary how the pattern isn't following the recession trend. Momentum down market is as fast as I thought it would be... I just had the year off by one. ;) (Ok, more like 18 months... But hey, I was a "fast downturn" predictor.) ;)

People are really pulling back. The number of trips canceled is amazing. Its national too.

Its at the point where I hope its only a recession. I still think that is possible. However, the denial has been too extreme. The whole banking system is about to be ripped asunder. :(

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bearmaster said...

If you were off by only one year, you are doing better than most economists. I have an extensive "bear book" collection spread out over 3 shelves in our study, inaugurated with Ravi Batra's "The Great Depression of 1990." 18 years is about how long ago I started thinking about this stuff!

wannabuy said...

18 years. About time. ;)

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