A Popular Mexican Chain Just Abruptly Closed Dozens of Locations
Over the last few months, the restaurant industry has been hit with a slew of closures. And another restaurant chain just got added to the list.
Rubio's Coastal Grill, the fast-casual Mexican chain known for its fish tacos, has closed 48 underperforming restaurants in California as of May 31. Of these locations, 24 were in Los Angeles, 13 were in San Diego, and 11 were in Northern California.
A company spokesperson told ABC 10 that "the rising cost of doing business in California" sparked the chain's decision to shutter the four dozen restaurants.
"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," the spokesperson added.
Rubio's now operates 86 locations across California, Arizona, and Nevada.
On April 1, California increased its minimum wage from $16 per hour to $20 per hour for fast-food employees at chains with more than 60 locations nationwide.
Rubio's didn't just start to experience financial challenges though. The chain has been struggling for years, with its sales starting to drop in 2017 and continuing to decrease during the pandemic, according to Restaurant Business Online. In 2020, Rubio's filed for Chapter 11 bankruptcy. The publication reported that Rubio's closed more than 25% of its restaurants since 2018, citing data from its sister company and industry research firm Technomic.
The firm also found that Rubio's has averaged a 1.1% decrease in system sales over the past five years. Meanwhile, fast-casual Mexican chains averaged 10.4% growth within that time frame.
News of these recent closures comes shortly after after Rubio's shuttered locations in El Dorado Hills and Folsom, Calif. As with the 48 recent closures, Rubio's attributed the shutdowns to the "rising costs of doing business in California," according to ABC 10. The chain's El Dorado Hills location reportedly didn't pay rent for a few months and was about to receive an eviction notice.
Rubio's isn't the only fast-casual Mexican restaurant chain to close multiple locations this year. In April, Texas-based Tijuana Flats shuttered 11 restaurants after declaring Chapter 11 bankruptcy. Of these closures, 10 were in Florida, while one was in Virginia, according to a company representative.
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