# The Restaurant Industry Is Broken. Can It Be Fixed? - **Show:** The Daily - **Published:** 4 Oct 2026 - **Source:** https://www.nytimes.com/the-daily - **Transcript:** https://podcasts.opennash.com/shows/the-daily/the-restaurant-industry-is-broken-can-it-be-fixed-b90034/ - **Provider:** OpenNash Podcasts (machine-generated) ## In brief Brett Anderson, a New York Times food reporter, argues that the American restaurant business model no longer works for most independent operators. Costs for rent, labor, food and fees have risen so far that even packed dining rooms often lose money. Citing an industry survey, he says 42 percent of owners were unprofitable in 2025, and that the changes diners see are survival tactics, not trends. The episode moves from a Minneapolis diner that removed prices and briefly became more profitable, to the history and costs that squeezed restaurants, to the fixes now spreading: safe cuisines, counter service, simpler desserts and caviar add-ons. The tension is between restaurants' role as welcoming community spaces and the hard math that pushes them toward wealthier customers or quasi-charity. ## Key insights 1. **Busy restaurants are often not profitable** Anderson says a full dining room or a hard-to-get reservation is not evidence of financial success. He cites the National Restaurant Association finding that 42 percent of owners were unprofitable in 2025. 2. **Pandemic-era cost jumps hit thin margins hard** Anderson cites an industry study showing restaurant wages up 41 percent and food costs up 35 percent versus pre-pandemic levels. Small restaurants, sometimes only 25 tables, had little cushion to absorb that. 3. **Fees from delivery apps and cards drain profits** Anderson says swipe fees of 2 to 4 percent are among restaurants' top costs, and that many owners lose money on delivery-app orders. Independent owners lack the bargaining power that chains have to negotiate better terms. 4. **Menus are being redesigned to cut labor** Restaurants favor steakhouses, Italian and bistro formats, counter ordering, and make-ahead desserts like soft serve and sliced cakes that avoid hiring a pastry chef. Counter service also turns tables faster. 5. **Pay-what-you-can worked but proved unsustainable** Modern Times saw donations lift its finances, but two-hour lines, safety concerns and staff exhaustion forced a pause. It reopened with prices at roughly zero profit and a grant-funded 125 free meals a week. ## Questions this episode answers ### Why are restaurants struggling even though menu prices keep going up? According to Brett Anderson, costs for rent, wages, food and fees have risen so much that higher prices only partly cover them. Customers also respond by going out less, which hurts business further. ### How many restaurants are actually losing money? Anderson cites a National Restaurant Association report saying 42 percent of restaurant owners said their restaurants were not profitable in 2025. That means roughly a coin-flip chance that a given restaurant isn't making money. ### What is the Minneapolis restaurant that stopped charging for food? It is Modern Times, a neighborhood diner owned by Dylan Alverson. He removed menu prices as a protest and asked customers to pay what they could, and about half of diners didn't pay. ### Why do so many restaurants now have you order at the counter? Anderson says counter ordering saves on labor costs because fewer servers are needed. It also lets tables turn over faster, so a restaurant can serve more people, even when the food is high quality. ### Why do delivery apps and credit cards cost restaurants so much? Anderson says delivery apps, food distributors and reservation platforms each take a cut, and swipe fees run 2 to 4 percent per payment. Many owners treat delivery orders as a marketing cost because they lose money on them. ## Facts - **Brett Anderson** [0:01:28]: "when I visited in the spring, there were no prices on the menu" - **Brett Anderson** [0:04:09]: "Dylan Alverson, who owns Modern Times, had decided in the aftermath of the killing of Alex Pretti, which is when I was there, that he was gonna remove prices from his menu." - **Brett Anderson** [0:07:18]: "He had attracted so many donations that he was effectively more profitable than he had been when he was charging for food." - **Brett Anderson** [0:10:15]: "Alice Waters, its chef and owner, got that restaurant off the ground with a 10,000 loan from her father." - **Brett Anderson** [0:11:37]: "Andre Soltner, the famous chef who ran the place, purchased it from its original owner in the 1970s. Not with a bank loan, but with money he saved from working as a chef." - **Brett Anderson** [0:12:30]: "He closed his flagship New York restaurant, Craft, just this summer, citing real estate costs among other rising costs." - **Brett Anderson** [0:15:50]: "a recent study that came out last year, industry study said that wages are up 41 compared to pre pandemic levels in the restaurant industry." - **Brett Anderson** [0:17:16]: "food costs are up 35 for restaurants compared to pre pandemic levels" - **Brett Anderson** [0:19:15]: "how these two to 4% swipe fees are just killing them." - **Brett Anderson** [0:20:13]: "most of the restaurateurs I talk to say that when you order using a delivery app from them, they lose money, that they basically consider it a marketing cost." - **Brett Anderson** [0:23:32]: "42 of restaurant owners reported that their restaurants were not profitable in 2025." - **Brett Anderson** [0:22:10]: "it costs nearly 80 for a family of four to eat there." - **Brett Anderson** [0:27:36]: "Rye Bunny is the concept that they came up with to open in that very same space." - **Brett Anderson** [0:29:06]: "they also do not require you to hire a pastry chef, which is an expensive position that has traditionally been part of high end restaurants." - **Brett Anderson** [0:29:54]: "it has become so customary to find caviar markups and add ons at restaurants that I have stopped mentioning them in my writing." - **Brett Anderson** [0:26:27]: "These are also types of restaurants that tend to be higher priced to begin with and attract affluent diners." - **Speaker 3** [0:31:47]: "It grew to a point where the wait was so long because the need was so great that basically only people that could wait for 2 hours to eat were able to be customers." - **Brett Anderson** [0:33:08]: "there are now prices back on the menu, but he is still, he tells me, giving away 125 free meals a week. He went out and got a grant to help support that particular program." - **Speaker 3** [0:33:36]: "So we reopened with our menu priced at a basically a 0 profit margin." ## Transcript **[0:00:00] Peter Baker:** I'm Peter Baker. I'm chief White House correspondent for the New York Times. I cover the president of the United States, and I've covered every president since 1996. The pressure on an independent press today feels greater than at any time I've seen it in four decades as a journalist. All that pressure, though, is just a reminder of why journalism matters. Our job is to bring home facts, help our readers understand what's happening, regardless of what the consequences may be to us. **[0:00:25] Peter Baker:** And if they punish us, so be it. We will still go out there and report as honestly and aggressively and fairly and truthfully as we can. I mean, look, if the New York Times were not at the White House, asking the hard questions, looking for stories behind the stories, trying to understand what's going on, it's possible these questions don't get asked. Independent reporting requires resources. You can support it by subscribing to the New York Times at ny times com. **[0:00:55] Michael Barbaro:** Brett, tell me about this restaurant that started you thinking about the larger state of the restaurant industry. **[0:01:03] Brett Anderson:** Well, there's this restaurant in Minneapolis called Modern Times. It's really a diner style place, it's a neighborhood restaurant. Hey, Thanks, **[0:01:14] Michael Barbaro:** Thank you. **[0:01:15] Brett Anderson:** open for breakfast and lunch, but is really kind of known for its breakfasts. **[0:01:19] Speaker 8:** You know what you want to get bacon, eggs, toast. **[0:01:23] Brett Anderson:** Really good pancakes, bacon and eggs, that kind of thing. **[0:01:26] Speaker 8:** I'll take a coffee. **[0:01:28] Brett Anderson:** The thing that distinguishes this place compared to all the rest in Minneapolis that are a lot like it is. That when I visited in the spring, there were no prices on the menu. **[0:01:38] Michael Barbaro:** hm. And so how do you know what to pay, and how do you know what things cost? **[0:01:43] Brett Anderson:** Well, like at any restaurant, you receive at the end of the meal something that looks like a check. And what it is is really a solicitation to pay what you can pay, what you decide that you can afford. And on the day that I visited, I'd say half the people that were in the restaurant, according to its owner, couldn't afford to pay and didn't. **[0:02:03] Michael Barbaro:** huh? This is deeply unrestaurant like **[0:02:07] Brett Anderson:** It is unrestaurant like it. It would seem antithetical to making money, and in some ways, the move was made as a reaction to how hard it is to make money in restaurants. **[0:02:20] Michael Barbaro:** from the New York Times. I'm Michael Barbaro. This is the daily on Sunday. There are a couple of key things to understand about the American restaurant industry right now, and they can seem contradictory. Menu prices are higher than ever, yet restaurant owners are barely scraping by, and that's because the business of dining out is in crisis. Today, my colleague, Brett Anderson, one of the journalists behind the Times's annual best restaurant list, explains where this crisis comes from and all the creative ways that restaurateurs are trying to fix it. **[0:03:05] Michael Barbaro:** It's Sunday, October 4th. Brett Anderson, welcome to the Sunday Daily. **[0:03:15] Brett Anderson:** Thank you very much for having me, Michael. **[0:03:17] Michael Barbaro:** My pleasure. So you spend a lot of time in restaurants. You're a member of this Seal Team Six that drops into entire regions of the United States. And you quietly, stealthily scout for the best restaurants and then you publish them as this coveted list. Coveted if you're on it, painful if if you're not. **[0:03:39] Brett Anderson:** Yes, this year I traveled to 19 states, more, no more locations. I honestly lost count, you know, looking for restaurants to write about for the times, and also just like looking for stories too, to write a lot of time for the times. **[0:03:51] Michael Barbaro:** right. Cause beyond drawing up lists, you cover the entire industry, which is what we really wanna talk with you about here. So how did you end up hearing about this restaurant in Minneapolis that's breaking so many basic rules of the economics of the industry? **[0:04:09] Brett Anderson:** Well, I'd known about the restaurant for years for the simple reason that I'm from the Twin Cities. I get there to visit family as well as for work, and I was in the Twin Cities doing some reporting on the ice operation in the area. Um, that a lot of the listeners will recall, made a lot of news. People in the area felt it was akin to something like an occupation. And Dylan Alverson, who owns Modern Times, had decided in the aftermath of the killing of Alex Pretti, which is when I was there, that he was gonna remove prices from his menu. **[0:04:43] Brett Anderson:** He said it was a protest against what he called a fascist economy. **[0:04:48] Speaker 4:** I wanted to stop while we had federally armed troops acting aggressively towards our citizens. I, I wanted to stop contributing to it financially. **[0:04:58] Brett Anderson:** He was doing something that a lot of people in the Twin Cities were doing at that time, which was using what he had to try to do what he could. **[0:05:05] Speaker 4:** We started this out of a protest and we're seeing that it evolves into these different ideas. And And in that conversation, and we have, like, kind of curated he told me that that. And at the end of he the had been struggling we, I've to make a profit been, I've been. **[0:05:20] Brett Anderson:** at his restaurant for many years now. **[0:05:22] Speaker 4:** I have been poring over these numbers since the pandemic, and And it's like, in spite of that even state, per se, **[0:05:29] Brett Anderson:** though he was busy all the time, even though he was generating **[0:05:31] Speaker 4:** and um, and to this **[0:05:32] Brett Anderson:** what seemed to be quite a bit of revenue, he was simply not able to pay his bills and simply not able to pay himself **[0:05:38] Speaker 4:** it is really, kind of **[0:05:38] Brett Anderson:** very much. **[0:05:39] Speaker 4:** a and I don't believe that in America, restaurants are capable of achieving a profit anymore. **[0:05:48] Brett Anderson:** What he was explaining to me is something And I'm heard from restaurateurs across the country and saying, like, in recent years, again and again and again, don't which is which is that believe that in America, the business model isn't working. restaurants We're struggling to stay alive, are capable of and in fact, we achieving a profit don't know if we can. **[0:06:01] Speaker 4:** anymore. And so this is like a reset, this is a s. This is saying, like, how do we? How do we stop monetizing our staff, and how do we stop monetizing our customers? And have interactions that are based on, I mean, it's true. Hospitality is saying, And what had you get options, looked on you get **[0:06:21] Brett Anderson:** paper to be a pretty more, you get more radical thing, freedom from financial as he explained it uncertainty, to me, it and sounded less radical. **[0:06:28] Speaker 4:** you you get a chance **[0:06:28] Michael Barbaro:** hm. So he was kind of to spend more throwing up his hands time with your and saying, As a restaurant family. And that can't they can grow up make this math work anymore, with more, with I'm gonna try something new. I'm just gonna take with families prices off the menu, around. Really, **[0:06:41] Speaker 4:** that's why I wanted to open a restaurant in this neighborhood, was to provide a a community space that people could use, that lived in this neighborhood. And the economy has been making it near impossible to continue doing that. I mean, And we would have **[0:06:54] Brett Anderson:** what was further interesting there is that in doing that by not charging, his business started to do better than it ever had, or better than it has in recent years. **[0:07:05] Michael Barbaro:** huh? He was doing better financially by letting people pay what they want, by not charging, **[0:07:11] Brett Anderson:** By not charging, he had told me 50 of his clientele was not paying for food. **[0:07:16] Michael Barbaro:** and he was still doing better than before. **[0:07:18] Brett Anderson:** He had attracted so many donations that he was effectively more profitable than he had been when he was charging for food. **[0:07:27] Michael Barbaro:** That is truly counterintuitive. **[0:07:30] Brett Anderson:** It struck me as a very illustrative commentary on how little money restaurants are actually making in this economy in the United States. I've covered restaurants for over 30 years now, and I've talked to a lot of restaurateurs. You hear a lot of complaints when you're a reporter, as you know, but it has never been as pervasive. The economic reality has become the dominant narrative in an industry and a culture that I've covered, where for decades, the dominant narrative was creative expression, was hospitality, was sense of place. **[0:08:15] Brett Anderson:** Now I believe that that has flipped. And while it might not be apparent to diners so much, it is very much to me in the perspective I have as a reporter. These restaurants are struggling to survive, and, in fact, many of the people I talk to fear that they might not be able to. **[0:08:35] Michael Barbaro:** Well, Brett, we want to talk about what happened to bring restaurants in the US. to this pretty dire place. And now very much in search of a new business model. And we're gonna do that right after the break. We'll be right back. **[0:08:52] Ad read:** This week on the Wire Cutter show, you don't need to be afraid of a pressure cooker. We are in the 2nd generation phase of stovetop pressure cookers. So if you walk away and you leave it over too high of a heat, it's gonna vent itself. We're talking about one pot meals and all the ways to make them. Find the Wire Cutter show on the New York Times app or wherever you like to listen. **[0:09:33] Michael Barbaro:** Restaurants have always been a pretty low margin business, so let's talk about how the last few years really exposed not just how low margin they are, but basically how broken the restaurant industry has become. And led to all these efforts to reinvent it. **[0:09:55] Brett Anderson:** Well, this chicken little narrative, as someone in the industry described it to me recently, really dates to the Covid nineteen pandemic. But its roots go back decades further, and really to the beginning of what many would call the American restaurant revolution. **[0:10:12] Michael Barbaro:** Hm, okay, tell, tell us that story. **[0:10:15] Brett Anderson:** Well, you gotta think back to the 1970s. I'll use an example that maybe a lot of people will recognize. Shake n' Bs restaurant in Berkeley, California. It still exists. It's a famous restaurant. It's this historically important restaurant that really helped launch what we consider sort of the farm-to-table movement in the United States. Alice Waters, its chef and owner, got that restaurant off the ground with a 10,000 loan from her father. She opened that restaurant with flea market items, secondhand furniture. **[0:10:47] Brett Anderson:** This was a bohemian impulse. and oddly affordable, It was oddly affordable at a time when urban living was affordable. I'm old enough to remember. One of the reasons I wanted to move to a city in my 20s from the suburbs is was it was cheaper, on top of the fact that it was just more interesting to me. And restaurants, as we know them, really arise from this model. You saw restaurants everywhere in all communities, particularly in urban areas, where the business was hinged to the personality of the chef, the sort of talent and even the ethics of the chef. **[0:11:22] Brett Anderson:** That became part of the identity of the place, and that business model was built on a really different economy, particularly a really different urban economy. **[0:11:32] Peter Baker:** hm, meaning what exactly? **[0:11:37] Brett Anderson:** Well, let me give another example. Lou Tess, this is a New York restaurant. The former restaurant critic of the New York Times, Mimi Sheraton, once called the best French restaurant in America. Andre Soltner, the famous chef who ran the place, purchased it from its original owner in the 1970s. Not with a bank loan, but with money he saved from working as a chef. And with that money, he was able to purchase not just a restaurant, but a four story townhouse in Manhattan. **[0:12:09] Brett Anderson:** Now, imagine someone today in New York, making only working wages, being able to squirrel a way enough money to do something like that. **[0:12:18] Michael Barbaro:** right. So what you're really saying is that at the birth of the modern restaurant scene, was an affordable urban real estate market. **[0:12:30] Brett Anderson:** Exactly, and everything that went along with that. Not only could you afford to open a restaurant for much less money, but people who worked in restaurants could afford to live nearby on a restaurant's salary. To give just a recent example about how hard the real estate is Tom Colicchio, who's a famous chef, many listeners may know him by being because he's one of the hosts of Top Chef. He closed his flagship New York restaurant, Craft, just this summer, citing real estate costs among other rising costs. **[0:13:01] Brett Anderson:** This this famous chef, who has other income streams, was not able to afford to run a restaurant in New York City, given the cost of running a restaurant in New York City. And today, real estate is just one in a long list of costs that have gone through the roof for restaurateurs. And the shutdowns during the Covid pandemic really exposed the fragility of this business model and exposed all these costs that restaurateurs feel like they're drowning under. **[0:13:31] Michael Barbaro:** Well, just explain that. Cause. I think we all, on some very superficial level, understand that the pandemic was terrible for restaurants because it shut so many of them down for so long. But beyond that, what do you mean when you say it exposed the fragility of the whole industry? **[0:13:49] Brett Anderson:** Well, as we know, these restaurants weren't able to operate f in many instances for quite a long time, at least not operate as usual. Because people legally weren't allowed to eat inside restaurants, right? You couldn't go them, so, you know, you're turning off the spigot on revenues. And I took note during the pandemic of how many of the sort of most famous people in the industry, people who you would assume had resources to burn, were talking about as though they could not afford to have their business shut down for six weeks. **[0:14:24] Brett Anderson:** And that's what I mean about exposing the fragility of it, right? **[0:14:26] Michael Barbaro:** Th th. There was no margin, there was no cushion, there was no rainy day fund, **[0:14:32] Brett Anderson:** Yeah, what is a restaurant worth if it's not open? And it turns out, not much so. Then there was also these other things during the pandemic that occurred. The biggest was the killing of George Floyd and the racial reckoning that followed it. And, you know, in the restaurant industry, we saw some spillover here. This was an industry that was already roiling from the Me too movement, which hit restaurants very hard. And you had this environment in which restaurateurs were taking to social media to try to pledge their solidarity to the people who were on the streets during the Black Lives Matter movement. **[0:15:11] Brett Anderson:** That invited employees to jump onto social media as well and point out where some of these restaurant owners perhaps weren't as righteous as they were trying to present themselves to be. Where they were making complaints about workplace conditions and treatment in the workplace and pay and all the rest. And it was a very contentious time for restaurateurs and for restaurant employees who had felt that they had been mistreated for so long. And saw on the streets of cities across the country this permission to air their own grievances about their workplaces and how they'd been treated. **[0:15:50] Brett Anderson:** And this dynamic was one of the factors that caused labor costs to really rise. You know, people were saying, I'm not gonna go back to work at a restaurant if I can't make a living wage, and living wages in a lot of cities is much higher than it used to be. And, you know, a recent study that came out last year, industry study said that wages are up 41 compared to pre pandemic levels in the restaurant industry. **[0:16:17] Michael Barbaro:** hm. Whi. Which, of course, is great for workers and perhaps was quite overdue. But from the perspective of a restaurateur who, as you've already established, is dealing with really high real estate costs, is dealing with the hit of the pandemic. Is suddenly a very big new expense. **[0:16:35] Brett Anderson:** It's a big new expense, and you're right, higher wages we shouldn't see as a net bad, but it is a challenge for a small business, right? As many restaurants are, even many of the most famous restaurants can be as few as 25 tables. And that's not the only increased cost that they're facing. You may recall during the pandemic, you know, was when we first started seeing, at least in modern times, inflation become a very potent political issue that animated a lot of people. **[0:17:02] Brett Anderson:** And **[0:17:02] Michael Barbaro:** right, we've co. We covered it a lot on the daily. Actually, the government's response to the pandemic, which was instinctive and somewhat natural, which is to pump all this money into the consumer world, ended up making everything a bit more expensive. **[0:17:16] Brett Anderson:** yeah, food costs are up 35 for restaurants compared to pre pandemic levels, and that's a big, big number. And particularly for businesses that already had very small margins and whose other costs are also rising. There has become, I'd say, in the last year and a half even, a sort of new form of communication from restaurants on social media. Where they are taking to their online media feeds and trying to communicate with people just how much their costs are rising. **[0:17:49] Speaker 7:** There isn't room to sell affordable food in Seattle, and here's why. Hi, I'm thinking specifically my name is Peter McGrady. last This is a restaurant month, there's a restaurant space wallet, we serve that serves Indian all types of diners in this street food in Seattle, city, so you're the **[0:17:57] Brett Anderson:** called Spice. Walla. **[0:17:58] Speaker 7:** 1st. Our cost of goods, which is the cost of anything goes into the food that we serve you, has doubled since 2018. And the owner I look at a menu **[0:18:06] Brett Anderson:** posted to Instagram a video in and here's what which he showed happened the 1st time all these different **[0:18:09] Speaker 7:** on my menu. ingredients that were up, The cost of chicken is up 13, the percentage increase that six potatoes, **[0:18:14] Brett Anderson:** they've had to pay. **[0:18:15] Speaker 7:** 54, onions 89. And what Oil is up **[0:18:19] Brett Anderson:** he's trying to do there is what a lot of restaurateurs are really struggling to do, which is to communicate with their customers. To try to say, look, these rising menu prices are not a result of our greed, they're really a matter of our own personal survival. We just cannot keep up with these costs, we cannot operate a profitable business without passing some of that cost on to customers. **[0:18:43] Michael Barbaro:** right, and Brett, I'm surprised you haven't yet brought up credit card fees. **[0:18:49] Brett Anderson:** Credit card fees are something you hear a lot of people complain about, and it is sort of striking for me. I always just assumed, as a consumer, that this era in which we've gone to almost a cashless society would be good for retailers. You know, it, like, sort of removes this barrier of, like, oh, I don't have enough money in my pocket, right? And but that's just not the case for restaurateurs, at least those that I talk to. **[0:19:15] Brett Anderson:** They increasingly talk about how these two to 4% swipe fees are just killing them. A Times did a story in which it said that that was the 3rd highest cost behind labor and products that restaurants have are credit card fees. **[0:19:30] Michael Barbaro:** right. And because no one's paying cash ever at all anymore, every bill involves a credit card fee. **[0:19:38] Brett Anderson:** And it's not just credit card fees, there are all of these assortment of fees that restaurateurs have to pay to. Basically, all of these industries that have been built on the backs of restaurants. Think about delivery apps, think about the food distributors, the reservation platforms, all of these things take a cut. I don't And talking **[0:19:58] Michael Barbaro:** think people know that, by the way, Brett. I mean, I use seamless. And it wasn't until I was doing some research for our conversation that I, and I'm embarrassed to say this. I discovered for the very 1st time that all these services charge the restaurants, basically a commission. **[0:20:13] Brett Anderson:** most of the restaurateurs I talk to say that when you order using a delivery app from them, they lose money, that they basically consider it a marketing cost. And it's a risky one, because if you get your food delivered from a restaurant and it arrives cold, or, you know, something disappointing happens en route. The customer is gonna blame the restaurant of course, more likely than it's gonna blame the delivery app. And so they're basically shouldering this risk while paying for the privilege in a way that causes their profits to go away. **[0:20:47] Michael Barbaro:** right. So in all these ways, a restaurant's prices are basically just kind of nickel by nickel, fee by fee, going through the roof. **[0:20:55] Brett Anderson:** Yeah, someone in the industry described it as these relationships, these business relationships that began as symbiotic relationships, have turned parasitic. And all of these extra costs, particularly independent restaurateurs, they do not have the negotiating ability to get better terms from these big companies, as maybe some chains do. **[0:21:18] Michael Barbaro:** right. And so they're now routinely charging a whole lot more for food, **[0:21:24] Brett Anderson:** Yes, yes, and customers are noticing, and as a result, going out less or complaining more, neither of which is good for business. **[0:21:33] Michael Barbaro:** right? After the pandemic, when the cost of actually eating out started to reflect the cost of actually eating out, I think it was. And I'm speaking a little bit personally here, at times jarring just how much more expensive a restaurant that you had been frequenting in the past suddenly was. And it began to change my relationship with certain restaurants. A place that I could visit with some frequency because it felt reasonably affordable now felt like a very, very special occasion kind of place, and therefore I went there a lot less. **[0:22:10] Brett Anderson:** and I have to say so. I eat out at restaurants constantly for work. I'm settling a lot of checks. I've seen a lot of prices, but just this past week, for my son's 12th birthday, he wanted to go to five guys. You know, it's a national chain of sort of fancy fast food hamburgers, and it costs nearly 80 for a family of four to eat there. **[0:22:32] Michael Barbaro:** right, family of four to eat basically burgers and fries, **[0:22:34] Brett Anderson:** Burgers and fries, and there was a shake involved. **[0:22:36] Michael Barbaro:** of, of course, there was a shake. Yeah, that's expensive, but Brett, clearly raising prices alone, which is really restaurant's only card to play, has not cracked the code. Because, as you said at the beginning of this conversation, every restaurateur you talk to says that the business model is still broken. **[0:22:59] Brett Anderson:** yes, it's true. And you know, there's a phenomenon that you hear a lot of people, uh, restaurateurs sort of complain about, which is that when people see busy restaurants, and it's not as though restaurants aren't busy, right? You see what appears to be a successful business, a restaurant that you can't get a reservation to. That is not evidence of a restaurant that is financially successful. You hear this over and over from people. The National Restaurant Association came out with a report recently, and this is the largest trade group representing restaurants of all types. **[0:23:32] Brett Anderson:** That said, 42 of restaurant owners reported that their restaurants were not profitable in 2025. That's a lot, **[0:23:39] Michael Barbaro:** yeah. Basically means if you walk into a restaurant, there's a almost half chance that it's not making any money. **[0:23:44] Brett Anderson:** that's correct, and that tracks with what I hear, you know, the anecdotal evidence of the interviews and what I hear from people. It's now really affected what I see when I visit restaurants, where I used to see trends and innovations that were sort of arising from immigrant culture, from chefs finding new ways to express themselves. Personally, I now see business solutions. I see attempts to find revenue in new places by any means necessary. **[0:24:22] Michael Barbaro:** Well, I wanna talk about all these business solutions you're now seeing in restaurants that you visit. Right after one more break, we'll be right back. **[0:24:31] Ad read:** I'm Deborah Kamen, I'm an investigative reporter for the New York Times. One morning a few months ago, I got an email and this person said to me, Hey, I have some documents that I think you wanna see. So I got on a plane that afternoon and I met them in person and I photographed the documents. And we were able to tell a story that moved our reporting forward in a really significant way. When you subscribe to the New York Times, you're getting a whole team of reporters who are willing to jump and go verify information and bring back documents and shine light on things that other people would like to keep hidden. **[0:25:11] Ad read:** If you're a subscriber, thank you for being a part of that. **[0:25:15] Michael Barbaro:** Brett, now that you've laid out the scale of the financial crisis for restaurants, talk about these business solutions that you are seeing popping up all across the industry. **[0:25:27] Brett Anderson:** Well, one thing that is hard to miss when you go, particular to larger cities, is a sort of a bumper crop of Italian restaurants, of steakhouses, of kind of off the shelf French bistros. And **[0:25:41] Michael Barbaro:** Hm. And what are those three things have in common as business solutions? **[0:25:45] Brett Anderson:** they are proven successes. You see a lot less risk taking, which isn't to say that some of these places aren't very good. But, you know, it's also sort of known that you can get high margins on pasta steakhouses. You don't need to put a lot of training to teach a chef to make a really good steak. No, there's a thermometer Uh, **[0:26:04] Michael Barbaro:** you can just pop in the meat. **[0:26:05] Brett Anderson:** yes, like, there's these sort of explanations, I think, is part of why we're seeing those sorts of trends. And just to make Um, **[0:26:13] Michael Barbaro:** sure I understand, if the steak doesn't take that much expertise to make, then maybe that means there's less labor involved. And since labor costs have gone up, this is how we as a restaurant perhaps create a more profitable business. **[0:26:27] Brett Anderson:** correct. These are also types of restaurants that tend to be higher priced to begin with and attract affluent diners. And as we sort of know about this economy that we're living in and that these restaurants are struggling in, affluent people are doing fine. So if you can be catering to them and have a really safe business model, well, that's one of the safest things you can do if you're opening a restaurant today. **[0:26:52] Michael Barbaro:** got it okay. So that's why we're seeing a proliferation of Italian restaurants, steakhouses. What else are you seeing out there that solves this problem? **[0:27:00] Brett Anderson:** Well, you're seeing these other smaller little innovations that you see across restaurant styles. It's now much more common to find restaurants that are serving what we sort of consider to be high end food created by a very well trained and respected chef. Where you order at the counter and I think about a place like Rye Bunny in Washington, DC. which is one of the restaurants that made our list this year. A And it's run by a chef and his wife and partner, who had a successful restaurant in that same space for years. **[0:27:36] Brett Anderson:** That they, even though it was very popular, that they decided to close, they didn't feel like the model was working anymore. Rye Bunny is the concept that they came up with to open in that very same space. And the biggest difference you notice when you go into it is that there's a huge line of people waiting to order. They're ordering at the counter, right? Like, this is a way to save on labor costs, but the food itself is as impressive as it was at its old restaurant, if not more. **[0:28:02] Brett Anderson:** You know, it's cooking in sort of this loose Mediterranean style, you've got matake mushrooms, you've got really wonderful, uh, local ingredients, it has a great steak. Like. This is a very, very high achieving sort of neighborhood American bistro. But you make your order to someone who's standing behind a cash register, like you and I. **[0:28:20] Michael Barbaro:** And and and I think that that has all kinds of virtue. And I say that selfishly as a parent of two small children. When you are able to order really good food from a counter, then you're not having to worry that your kids are gonna lose their mind while you wait for a waiter or waitress to come over. And so it kind of makes a certain kind of high quality restaurant accessible to families. **[0:28:45] Brett Anderson:** Well, you also just landed on. Another feature of this model is that tables turn more quickly when you're not waiting for service, so you're able to serve more people. It's another benefit of this kind of model. **[0:28:57] Michael Barbaro:** hm. What kind of changes are you actually seeing on the menus of the kind of restaurants we're talking about here? That makes their business more successful? **[0:29:06] Brett Anderson:** I think it's instructive to look at desserts. I don't know if you have seen this where you live, Michael, but there's a lot of soft serve out there. There's a lot of there's a lot of things you can scoop on restaurant lists, or things you can make in a pan, like tres leches cake, and then slice, make ahead. These things are delicious, but they also do not require you to hire a pastry chef, which is an expensive position that has traditionally been part of high end restaurants. **[0:29:34] Brett Anderson:** That is something that is a luxury that a lot of our best restaurants in the country have realized that they are going to have to live without if they want to survive. And Michael, on the complete opposite end of that spectrum, from soft serve ice cream, we have caviar. I don't know if this is something you've noticed, but caviar **[0:29:50] Michael Barbaro:** I have, I have. Do you want caviar atop? Whatever, **[0:29:54] Brett Anderson:** it has become so customary to find caviar markups and add ons at restaurants that I have stopped mentioning them in my writing. They are just almost ubiquitous at restaurants, including these steakhouse and Italian places. And there's a lot of chefs who are doing this, I think, somewhat begrudgingly. **[0:30:16] Michael Barbaro:** right? Cause it's an obviously solid way to, uh, overcome the economic challenges of this moment. **[0:30:23] Brett Anderson:** It appears quite craven, obviously. But also, you know, a lot of these people who work in restaurants are middle and working class, and they are growing tired, they tell me, of cooking food that only a very small sliver of the population can afford. The sense of weariness I'm hearing from chefs is not just coming from those who are charging markups for caviar. Dylan Alverson, the owner of that restaurant up in Minneapolis. **[0:30:49] Michael Barbaro:** This is the restaurateur who ultimately ends up charging nothing on his menu for **[0:30:53] Brett Anderson:** Yes, yes, you know. He told me that it was feeling exploitative to charge what he was charging for pancakes, and it was, you know, one of the reasons that he wanted to try this experiment by removing prices from his menu altogether. **[0:31:09] Michael Barbaro:** You mentioned that when you were out there, this decision to drop prices from the menu for Dylan had been something of an unexpected financial boon. Did that remain the case? **[0:31:24] Brett Anderson:** well, I called Dylan actually last week to find out how things had been going. hi, hi, Brett, And it turns out that it was very complicated. Removing prices from the menu presented challenges I. I identify that went beyond **[0:31:39] Speaker 3:** with that as well. **[0:31:39] Brett Anderson:** making ends meet economically. hm, such as **[0:31:41] Speaker 3:** So what was the main Well, point not they were attracting effort wise, specifically? **[0:31:45] Brett Anderson:** lines of up to 2 hours of people. **[0:31:47] Speaker 3:** It grew to a point where the wait was so long because the need was so great that basically only people that could wait for 2 hours to eat were able to be customers. And **[0:32:01] Brett Anderson:** And, as I mentioned earlier, times of economic upwards of half of those people uncertainty, you know, people were trying hoard things to get free meals. **[0:32:07] Speaker 3:** that they're scared to lose, This was something so so they that became disturbing they overbuy to neighbors. it's something something **[0:32:11] Brett Anderson:** Um, a lot of those folks that that who were trying to get free meals had, for instance, drug I'm not doing problems, **[0:32:15] Speaker 3:** it alone. they were perhaps homeless, Yeah, **[0:32:17] Brett Anderson:** and people started to fear crime, and there was tension with neighbors. It was also challenging for the staff, and while I think that the staff, as far as I could tell when I was there, really, I mean, really appreciated that challenge and really wanted to deliver on it. ultimately, It became quite physically exhausting for everyone. everything **[0:32:38] Speaker 3:** culminated to a point where I was like, we just we have to stop. And so Dylan announced which that One was what he had called which I think postmodern times is is **[0:32:50] Brett Anderson:** was gonna close down for a good. break and reopen again in August as modern times. With a business model that sw sort of split the difference between the experiment he was running and the traditional restaurant that that replaced. **[0:33:04] Michael Barbaro:** hm. And and split the difference. How? What model did he settle on? **[0:33:08] Brett Anderson:** Well, there are now prices back on the menu, but he is still, he tells me, giving away 125 free meals a week. He went out and got a grant to help support that particular program. But the prices on the menu are not designed to fuel that charitable effort. The prices that are on the menu today, he says, represent maybe we're what, you the lowest know, we're price he can charge maybe we're well on and still **[0:33:34] Speaker 3:** our way to over 100. **[0:33:34] Brett Anderson:** meet all of his expenses. **[0:33:36] Speaker 3:** So we reopened with our menu priced at a basically a 0 profit margin. Which is a continuation of this idea that I keep pushing that there is no longer a profit margin in restaurants. So we have menu items that are priced at 24. That is reflective of a modest living wage and the real cost of food without a profit involved. So he's not And with that, **[0:34:12] Michael Barbaro:** making money, and and therefore, I wonder, is this right, right, not like any kind a of pathway forward for the rest of the industry? It doesn't sound like it would be **[0:34:22] Brett Anderson:** Well, he would say otherwise. He is actually arguing that this new model is something that other restaurants could adopt. He's trying to create an example where you have a restaurant that is using donations to feed people who can't afford to feed themselves. While still meeting its bills and paying its employees so it it with the for-profit arm inside that very same restaurant. and **[0:34:46] Speaker 3:** if I can create a fundraising mechanism that can raise money to provide hospitality, we can take that program and add restaurants to He thinks it. Um, that if I think that's other places the biggest thing adopt this and and **[0:35:02] Brett Anderson:** model, that it would take and we're some of the burden off his restaurant to looking to it's be feeding all these people and create some economies of scale. **[0:35:11] Michael Barbaro:** That's really interesting. I mean, basically, he's saying that the industry's math is so bad that you might as well do something like become a quasi nonprofit. That can pay all your staff, pay all your bills, keep up with the rising food costs and all the fees and commissions, and that might be okay to not have a profit at the end of the year. **[0:35:36] Brett Anderson:** Yeah, I mean, I have to say what something that he said that really stuck with me is he and his staff. During this challenging time, when they were trying to do this radical thing, discovered that they liked providing this service to people who otherwise weren't able to afford restaurants. They appreciated working at a place where that financial barrier had been removed and that was open to everyone in their community, regardless of how well off they were. **[0:36:05] Brett Anderson:** from There was something about the uh, it that made their work feel we. more worthwhile. **[0:36:10] Speaker 3:** We kind of went back to this core idea of hospitality, which is just offering comfort, relationships that are formed through inviting people in and feeding them. Basically, And Dylan told me yep, and that's that that's the reason what overall that he's doing has made it this, not so successful. because he wants And I **[0:36:30] Brett Anderson:** to make a lot of money. think that's really Not only does he think interesting about the that it's that model not really possible and and in this economy, just but what he's really interested in is providing a space for people to come together and feel human and feel included and feel safe and satiated for a little portion of their day. **[0:36:53] Michael Barbaro:** Which is ultimately the very idea at the heart of a restaurant. **[0:37:00] Brett Anderson:** Indeed, it is, and there are people all over this country that are being really nice to perfect strangers. And you know, I, you cover politics a lot on this show, you know, in that context, in this context of polarization that we live in. **[0:37:18] Michael Barbaro:** and not nice to strangers. **[0:37:19] Peter Baker:** And not nice to strangers. **[0:37:20] Brett Anderson:** Yes, I have a deeper appreciation for this business that is founded on trying to treat people with respect and give them the benefit of the doubt. Foundationally, that is their goal, that is the goal of restaurants. These experiences of being able to hang out with your friends, being able to escape from whatever it is for a little bit of period of time, for being around people that you don't know, being treated well. All of that feels kind of like more essential than it ever has to me before. **[0:37:54] Brett Anderson:** And it makes me think that as challenging as the restaurant business has become, I really think that we all should be hoping that we can save it. **[0:38:05] Michael Barbaro:** Well, Brett, thank you very much. Appreciate it. **[0:38:12] Brett Anderson:** Thank you so much for having me, Michael. It's been a pleasure. **[0:38:24] Michael Barbaro:** You can read more from Brett Anderson and all of our food writers on the New York Times app. If you don't already have the app, we want to let you know that if you download it right now, you'll get access to all of our journalism free for one month. So give it a try and thank you. Today's episode was produced by Tina Antolini. It was edited by Wendy Doerr, engineered by Daniel Ramirez, and contains music by Dan Powell, Roya Misto and Marian Lazano. **[0:39:02] Michael Barbaro:** Fact checking by Lena Richards and production assistance from Dahlia Hadad. That's it for the Sunday Daily. I'm Michael Barbaro. See you tomorrow. I'm MJ Franklin. And this week on the Book Review podcast, Sweetsie by Emma Cline. **[0:39:30] Ad read:** Hands down, the novel with the most impressive control I've read this year. **[0:39:34] Michael Barbaro:** Someone is losing their mind and they're approaching their death **[0:39:38] Ad read:** Completely moving, elegantly written. **[0:39:41] Michael Barbaro:** and has got lost in the prose of it, which sometimes feels like poetry to me. **[0:39:45] Ad read:** What does a life add up to? What does it all mean? **[0:39:47] Michael Barbaro:** Listen to the book review wherever you get your podcasts.