String of San Francisco restaurants closing their doors

SAN FRANCISCO (KGO) -- San Francisco is known as a haven for good food, but restaurants in the city are increasingly finding it hard to stay open.

On the Embarcadero, 26-year-old Palomino, once known for its popular happy hour, has just closed its doors. Three restaurants near Oracle Park -- Pete's Tavern, Pedro's Cantina and Amici's East Coast Pizzeria -- have also closed, according to Hoodline. And in the Mission District, the owner of Dosa is also closing its original location on Valencia Street after 15 years.

"It was a combination of a lot of different things," Dosa CEO Anjan Mitra told ABC7 News. "It seemed like the perfect storm that hit us, hit the restaurant industry."

LIST: Historic Bay Area Restaurant closures

Mitra said the rise of food delivery companies, such as DoorDash, Uber Eats and GrubHub, along with tech companies like Munchery and Sprig, which delivered ready-made food to customers, has contributed to the increasing number of restaurant closures.

"The way people order food, you know online, put a lot of price pressures on us," Mitra explained, "So they took our margins away, so we are giving up 25-30 percent of our prices to the delivery companies."

On top of that, he said, the high cost of living, along with employee benefit requirements by the City, has led to increased business costs.

"It just became nearly impossible to sustain it," he said.

According to Laurie Thomas with the Golden Gate Restaurant Association, who looked at numbers available on Yelp, restaurant closures in San Francisco have outpaced openings by nine percent. She said last year, there were 325 closures versus 298 openings.

Thomas, along with other members of the Golden Gate Restaurant Association, recently spoke to the San Francisco Board of Supervisors asking the City to offset some of the costs for small business owners.

"If you want to have neighborhood restaurants, keep adding to the vibrancy of each of these neighborhoods," Mitra said. "You've got to think about the laws that you've actually put in place that could potentially have a devastating impact across the city and across the Bay Area, potentially."
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