Update August 1: CalHR responded to CapRadio's request for comment on behalf of the Newsom administration. "The Governor remains committed to the four day in office minimum. The one-year delay is a result of labor negotiations and gives us the opportunity to refine those plans and work with departments to ensure a smooth transition."
From longtime butchers, family restaurants, and diners to breweries and bars, Sacramento has seen numerous food and drink closures in the city over the past few years.
This year alone, the city has seen many closures, including V. Miller Meats butchery, which was forced to close, Track 7 and Device Brewing, Station 16 and Public House downtown which were located right next to each other on 16th Street.
This week, Chandos Tacos also closed all locations in Sacramento.
Experts say several factors can contribute to the closure of these establishments, including rising operating costs, insufficient disposable income, and low customer traffic.
The owner of V. Miller Meats Eric Veldman Miller told CapRadio’s Vicki Gonzalez the butchery had to close down after a decade for multiple reasons, stating the overall costs were rising.
According to the president and CEO of the California Restaurant Association, Jot Condie, there have been numerous “high-profile” closings in large metropolitan areas like San Francisco, Los Angeles, and Sacramento.
He said the high-profile closures come from the fact that the number of restaurants in California is at an all-time high.
There are more than 85,000 restaurants in California, with nine out of 10 being small businesses, according to the National Restaurant Association.
Condie said Sacramento is a government town, and post-pandemic, you're starting to see some metropolitan centers where the downtown core is coming back to life, with workers returning to the office five days a week.
He said that's not the case in Sacramento. Newsom postponed state workers' return-to-office until July 1, 2026.
“I think if you look at a lot of the businesses that are closing just in the last several years, it's largely because you don't have that prepandemic or sort of typical customer pattern of dining,” Condie said. “Sacramento is largely a ghost town compared to pre-pandemic, and that's having an impact.”
State workers are affecting the restaurant industry downtown
Condie said cities like San Francisco and Sacramento have a large workforce coming into the downtown core to work in their offices. He said prepandemic venues in those areas were thriving, and not having those workers coming in often is hurting businesses.
“Monday morning, the coffee shops were thriving. The lunch spots were thriving. And in many cases, the watering holes, for maybe someone who wanted to grab a couple friends and have an after-work drink,” Condie said. “When you lose a huge part of those ‘day parts,’ as they call it, in the morning, lunch, and afternoon, because the workers are not coming in five days a week, that has a huge impact.”
Barry Broome, the president and CEO of the Greater Sacramento Economic Council, said they’re disappointed Newsom didn’t bring back the state workers as promised.
“That's like 30,000 people all-in, even if they're there during the day,” Broome said. “So imagine taking 30,000 lunches and snacks and possible dinner drinks after work, taken out of a trade area besides downtown Sacramento. That's a huge blow.”
Newsom’s team did not respond to a request for comment in time for publication.
Broome said the Downtown Partnership and Visit Sacramento have done a great job improving the capital mall and events planning, but 30,000 is an incredible amount of activity you would need to offset.
Broome pointed to other factors that are hurting restaurants — minimum wage increases, expensive food costs, and people not having enough disposable income.
“The minimum wage law has been devastating towards fine dining restaurants, because they're already paying people a lot of money,” Broome said. “I think California is increasing restrictions and complications for small businesses. And then we're still beat up from Covid. So that's a lot to overcome in short orders.”
Despite all of the closures, Broome said Sacramento’s economic momentum is going great.
“Sacramento is in the top 10 as a region in economic growth, we're about seventh in job performance,” he said. “I think over time, with more success in the urban core on capital investments, you'll see the downtown recover.”
The cost of doing business
Owners and managers of The Monk’s Cellar, Touchstone Brewing and Logoff Brewing joined CapRadio’s Insight with Vicki Gonzalez to touch on the closures of Track 7 Brewing and Device Brewing.
Andi Klein, owner of The Monk’s Cellar in Roseville, told Gonzalez there’s uncertainty with tariffs and ingredient costs have been going up, which in turn has caused people to pull back a little.
Condie said restaurant expenses are increasing across the board.
“Whether it's rising food costs or increased labor costs or rising rents, the utility price of energy, depending on what part of the state you're living in, it's much worse than others,” he said.
He also mentioned credit card processing fees that restaurants have to pay companies, given that most restaurant transactions are with a credit or debit card.
“You're seeing all sides of restaurants are being squeezed in a business where the profit margins are notoriously thin,” Condie said. “And they've got to figure out, can I raise prices?”
Condie stated that price increases pose a significant challenge for small neighborhood restaurants, which lack the advantage of bulk purchasing, and thus cannot operate on a cost-effective basis.
“The larger restaurants that can take advantage of the economies of scale that they command may be able to get a better deal, but for small independent restaurants, it's more difficult.”
Jim Denny’s closed its doors abruptly for the second time in 85 years in early July due to the property owner wanting to sell the land the restaurant was on.
People of Sacramento took to Reddit to discuss the restaurant closure, and Brandon Mullins, as of mid-July of this year, said he still hasn’t gotten paid for being a sous chef at the restaurant.
Mullins told CapRadio he worked at Jim Denny’s from when they reopened in 2023 and is still owed around $3,000 from his time working there. He quit in July 2024.
N’Gina Guyton, the owner of the restaurant, did not respond to multiple requests for comment. Guyton did give a lengthy response to an Instagram comment alleging that she doesn’t pay back her employees.
She wrote on July 12:
“...there were a lot of things against Jim Denny's financially that first year, including employee theft, 7 robberies (9 in total), permit issues with the city and a raise in taxes etc. And trust, I’m not the only restaurant that’s going through the exact same thing. A lot of us are struggling to pay employees, keep the lights on and keep cost down so we are affordable. At the end of day, I know everyone will be paid. There’s a lot of restaurateurs that have closed their spots and never paid their staff back or reopened, so that could have a means to do so…”
Condie said labor costs are close to 50% of a restaurant's operating expenses and restaurants have to find a way to cut back on costs. Not paying the employees isn’t an option, he said.
“What restaurants typically do is they will reduce their staffing size or cut back hours,” Condie said. “A lot of restaurants are scaling back their hours of operation. It's not uncommon to find a restaurant that's closed on a Monday or a Tuesday and the hours are shorter, on the days that they're open.”
Condie said restaurants would also reduce shift hours and adjust menu items to make things more affordable.
Future of the restaurant business in Sacramento
Condie said it’s hard to predict the restaurant business in California because there is a lot of uncertainty, but food costs are volatile right now.
“I don't think it's ever been worse than it is today,” he said. “Our suspicion is once this whole tariff discussion settles down, there's more sort of predictability in terms of supply chain issues and food cost issues, that will be good because business operators and restaurant owners need to plan.”
Broome said Sacramento is poised to succeed in the upcoming years because the metropolitan economy is doing well.
“I think Sacramento will have a successful urban core in the next five to 10 years, but a lot of grinding in the next five years,” Broome said. “And we have to get into a stable political environment, which we haven't been in in a long time.”
