Iconic Stonestown Galleria McDonald’s Shutters
A beloved McDonald’s in San Francisco’s Stonestown Galleria has permanently closed its doors, marking the latest business casualty in the wake of California’s newly implemented $20 minimum wage. The closure of the fast-food outlet, located eight miles southwest of downtown San Francisco, ends its 30-year service to the local community.
Franchise owner speaks out
Franchise owner Scott Rodrick expressed deep regret over the closure. “This is a gut-wrenching day for my family,” Rodrick told ABC 7. He attributed the decision to multiple factors, primarily the recent increase in the state minimum wage from $16 to $20 per hour.
Rodrick noted additional financial pressures, including high property taxes, a mall tenant fee, and a landlord’s refusal to negotiate on long-term rent. These costs collectively made the Stonestown location the most expensive to operate within his restaurant company.
Impact on employees and community
Despite the closure, Rodrick ensured that his employees were not left without options. “All of our valued team members have been offered opportunities to continue working with my restaurant company or at other nearby McDonald’s,” he stated in a note posted on the restaurant’s door. The closure has left a significant void in the 19th Avenue and Ingleside neighborhoods, where the McDonald’s had become a staple over three decades.
Broader economic challenges
Since the new minimum wage law took effect on April 1, a wave of business closures has swept across California. Notable among these was an Arby’s on Sunset Boulevard in Hollywood, which closed in June after 55 years in operation. “With inflation, food costs have gone way up and the $20-an-hour minimum wage has been the nail in the coffin,” Gary Husch, general manager of the Arby’s, told the Los Angeles Times.
Similarly, Taco chain Rubio’s Coastal Grill closed dozens of locations across the state and filed for Chapter 11 bankruptcy shortly thereafter. Fosters Freeze, another fast-food chain, shut down a location near Fresno, directly citing the new wage law as the cause.
To cope with increased labor costs, many chains, including McDonald’s, Wendy’s, Burger King, Starbucks, and Chipotle, have raised prices by up to 8% in California. This price hike has led to a decline in customer visits, as reported by analytics firm Placer.ai, indicating a broader economic strain on the fast-food industry in the state.
The closure of the Stonestown Galleria McDonald’s underscores the significant impact of the wage increase on businesses, highlighting the delicate balance between fair wages and economic viability.