Two recent articles via WCCO and the Minneapolis/St. Paul Business Journal highlight the lengths brick and mortar restaurants are willing to go in order to limit the influence the street food movement is having on their business. While some of their complaints may be valid, what this really boils down to is an influx of competition into a marketplace which had been dominated by expensive and low quality food but now is flooded with somewhat less expensive but far better quality foods which are eating into the profits of businesses unwilling to change with the times.
From the WCCO article:
“The trucks park in front of our doors and hijack our customers,” said Doug Sams, founder of D. Brian’s Deli & Catering. Sams says food trucks have hurt his sales by about five percent.
“A five percent drop in sales could be all of your profits, could be fifty percent of your profits, it’s a major impact on the way you’re doing business,” he said.
While D. Brian’s founder maybe be right on when he states that the food trucks have hurt his sales, he is attacking the problem from the wrong angle. D. Brian’s isn’t exactly known for it’s stellar food or service and with a 50% rating (N=14) on Urbanspoon, it would appear that not many people with an interest in food are eating at his establishments mostly because the food trucks offer a far better product for the same, if not a lower, price point.
From the Mpls/St. Paul Business Journal article:
Abdo and other restaurant owners are pressing the city to toughen ruls and fees on food trucks. Abdo said he doesn’t mind the competition and says the food trucks bring vibrancy to the city.
“I just want a level playing field,” he said.
Instead of changing their business to meet the high quality demand created by the “vibrant” streetfood movement, MyBurger is instead trying to attract new business and retain previous customers through a series of advertisements meant to showcase the fact that brick and mortar stores are located in the same spot daily and don’t plan to move around much.
However, what the ads also show are that the traditional restaurants downtown at the skyway level are unwilling to have ever-changing menus which are keeping up with customer tastes like the food trucks are able to do. Instead of restaurants driving demand through location, advertising, and lack of decent competition, a far more knowledgeable customer base looking for food-forward establishments are bypassing the traditional outlets which may be difficult to reach in the maze of the skyway system.
Instead of pushing to punish the food trucks because of their success using superior ingredients, food forward menus, and locations which are more convenient and easily found by downtown diners, brick and mortar shops should be doing what they can to revamp their menus, reset their prices, and draw potential business away from the trucks and into their stores. Unfortunately, they will likely continue to use the city to lobby against the newcomers instead of taking the better option and, depending on the outcome, they may end up closing their doors due to the fact that they simply refuse to do the right thing.
What do you think about the competition the food trucks have brought to downtown brick and mortar restaurants and their response so far? Do you believe that this is simply an issue which needs to be carried out in the political arena or do you think that this is something the brick and mortars should combat with better food? Do you think that MyBurger or D. Brian’s food is any good? Whatever you have to say about this one go ahead and comment on as I’d love to hear your thoughts.
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July 9th, 2012 at 7:24 am
D-Brians is the place you go when you’re in a hurry and there’s NOTHING else availble. Their sandwiches are terrible. The “homemade” soups are exactly if that if your mom was like my mom and made soup with a can opener and sauce pan. Gross and for what you get over there they’re super expensive.
I’ll admit that it’s really hard to make a profit in the skyway, rents have to be outrageous, but people will pay for good food.
But lets be honest, what Food Trucks have done for D-Brians is given people an option for good food, and given the choice between D-Brians and something even half way decent people will flock to the other options. Hell, even the worst place on the planet, Subway has a line in front of it proving that when it comes to options to eat downtown, unless you’re serving dog shit, spitting in peoples food or charging a mint for it, you can probably draw a crowd.
I say bring on more options and lets watch D-Brians fade out of existence, they’ve been peddling crappy food and high price to a captive audience for too long.
July 9th, 2012 at 7:35 am
Oh, one more aside, no food truck parks infront of D-Brians, customers have pass D-Brians and walk three blocks north of them to get to 10th where the trucks usually park. The only truck that parks on Nicollet, in “front” of them, is the Turkey sandwich place and it’s only there on Thursday with the Farmers Market. It’s good, but I’d hardly say there’s anything in front of them.
D-Brians in the US Bank Building have been hit by more competition as the south end of the Nicollet has been developed. The D-Brians in the Raddison was hurt by the redesign of the skyway in the Hyatt. Their direct link to Target’s IT HQ was cut off AND competition opened in City Center and D-Brians has taken a huge hit based on the non-existant crowds that are there these days. In the past the place was packed. Just my observation.
July 9th, 2012 at 9:52 am
Type ‘www.dbrians.com’ into your browser and look at the food that pops up on your screen. That’s the garbage I get screwed with when I’m stuck in a day-long (or worse) conference or training. Why would anyone in their right mind actually seek it out voluntarily?
If you’re sustaining a business on soup/salad/sandwiches or burgers, they’d better be absolutely top-notch (see Be’Wiched Deli). Otherwise, even a change in wind direction will grab 5% of your business.
Don’t blame the food trucks. Blame your boring, half-assed food.
July 9th, 2012 at 10:09 am
Food trucks, smoking ban, light rail… Business looking for something to blame for their bad business. If you are a good business with a good product, people will come. Outside factors are always changing and a business needs to adjust.
(Though some businesses are really getting hit hard by the light rail and I do feel bad. But if they make it through, they will be in a really good place.)
July 9th, 2012 at 10:25 am
As many of you are aware my company owns and manages commercial property. We currently have about 75 tenants and roughly 20% of those are restaurants. Some these are now or have included Perkins, Old Country Buffet, Wasabi, Sanctuary Restaurant, Juniors, Thai Curry House, Caribou, Jimmy Johns and many others.
I see the financials for these businesses and can tell you that most operate in low single digits of profitability.
Food trucks simply operate at a vastly different/lower cost basis. Our Minnesota commercial property taxes are among the highest in the country and food trucks do not contribute. There is no large dining room to heat, cool and insure. They generally do not have wait staff and therefore no salary, FICA, or unemployment costs.
Most of the sales out of these trucks are cash and I question how much of this makes it to the bank.
July 9th, 2012 at 10:28 am
My experience shouldn’t be considered law but I have never seen many pay cash at any of the trucks, everyone is using plastic and the trucks are using Square devices to make the payments although FWIW Dan’s Wicked Palate doesn’t use Square and he instead has one of those bulkier handheld mobile CC machines.
July 9th, 2012 at 10:46 am
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July 9th, 2012 at 10:51 am
There should be a law preventing the trucks from parking in front any open-for-business food venue and legal actions to be taken (fines, etc) for violations. Perhaps designating a zone for where the food trucks may park would be in order, assuming there is a real issue here.
I can see a need for a fee/tax on these businesses that is not applied to permanent structured businesses as the food trucks are profiting from the use of public property (streets/sidewalks/lighting/trash receptacles). It is up to each city to determine how much this fee is, and the trucks should pay each city they operate in the appropriate fee. If the fee is too high, the trucks will go somewhere else, and take their potential tax revenue with them.
If the permanent structured businesses can’t compete, they need to change their strategy, perhaps they should move to mobile food too (if you can’t beat them, join them). I know many BBQ places have vehicles for cooking food at remote locations, I wouldn’t think it is hard to convert those to mobile revenue sources for those businesses.
July 9th, 2012 at 10:55 am
Michael Roess,
While your cash skimming estimates are probably arguable, you are missing the point.
If a brick and mortar restaurant can’t compete with a food truck, well then they should figure out a way to compete. See Anchor Bar or Barrio for example.
On the reverse of that, see Smack Shack or World Street Kitchen or Foxy Falafel, all of whom are opening up brick and mortar places that will pay those taxes just like D. Fucking Brians has to.
It is about the food, that’s it. Any other complaint is just sour grapes.
lefty
July 9th, 2012 at 11:02 am
It is pure and simple… Serve good food that people want.
If D. Brians (which I had to suffer through being the only restaurant close by when I worked at Washington Mutual) would step up their game and get their prices in line (or else keep their prices high and improve the quality of the food) then there would be no issues.
If you are a brick and mortar restaurant and can not compete with a street vendor, that really says something about your restaurant. It seems to me that as a restaurant the solution is painfully simple – high quality fresh food at a good price. Why is that so difficult for restaurant owners to understand???
July 9th, 2012 at 11:09 am
Food trucks do contribute to commercial property taxes. They are required to prepare food in a commercial kitchen, or the ones operating in Minneapolis do. Commercial property taxes are paid on those kitchens.
Alan, a lot of what you suggest is already law in Minneapolis. They have certain zones they are allowed to operate in. They pay a fee for a license. The fee in Minneapolis is much higher than in St. Paul and the rules as to where they can park are much tighter. Yet, they want to be in Minneapolis, the land of milk and honey for food trucks.
July 9th, 2012 at 11:13 am
Thanks for clearing that up Kassie. If they food trucks are already doing what I said, then the only changes needed are for the permanent structure businesses to figure out how to improve their product/prices.
July 9th, 2012 at 12:42 pm
I like D. Brian’s. It’s my second choice when Chili’s isn’t available.
July 9th, 2012 at 12:48 pm
Hahahhhahahaha.
July 9th, 2012 at 1:08 pm
On a closely related topic, Pioneer Press has this story on mobile boutiques http://www.twincities.com/localnews/ci_21020737/food-trucks-are-marketing-map-mobile-boutiques
Would these warrant different considerations as they may very well carry the same brands as competing permanent structure businesses? I would think it much harder to compete if they are selling the same exact items but without the overhead costs of staffing and permanent structure costs.
July 9th, 2012 at 1:15 pm
Alan,
That is a very interesting point. I am guessing that if that were to happen, there would be backlash from the B&M retailers at the companies who are selling those identical products to the Merch trucks.
i.e. If I were to set up a low priced Girbaud Jeans outlet right outside of the County Seat, I am guessing the County Seat would probably tell Girbaud to stop selling them to me or risk losing the County Seat’s business.
People still wear Girbaud, right? That label always gets the ladies looking in the right direction.
July 9th, 2012 at 5:26 pm
Kassie, are the kitchens in downtown Minneapolis (and thus subject to the extra Minneapolis DID tax assessments), though? Honest question, because I don’t know if they are or not.
July 9th, 2012 at 9:31 pm
One more point- No skyway restuarant has much competition from trucks on the street. And since most of the trucks park on 10th or 2nd no one really has a truck in front of their place. AND, skyway folks don’t go to the street or visa versa.
AND, don’t forget the truck season in Minnesota is only 6 months at best. So, for the rest of the year this doesn’t even count.
July 9th, 2012 at 10:37 pm
lefty, Girbaud jeans? What, are you old like me?
July 10th, 2012 at 6:45 am
Sandy, nevermind the Girbaud reference, County Seat? Lefty, when is the last time you were in a mall? ;-)
July 10th, 2012 at 8:45 am
Evidently lefty has more gray hair than I do. and judging by the clothes he wears, he doesn’t shopped much either.
July 10th, 2012 at 10:59 am
It is too bad that my excellent response to Alan got lost in the hilarity of my 80′s jean shopping memories.
C&V. Nobody could possibly have more gray hair than you do.
July 24th, 2012 at 11:39 am
D. Brian’s food is awful. Most skyway food is. What a bunch of whiney babies. It’s a simple economic principle that even I know: Supply and demand. There’s a demand for better food, and the food trucks supply it!
September 21st, 2012 at 7:02 am
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