Apart from some of the biggest U.S. retailers, the past four or five years have not been particularly kind to most businesses.
Prior to the Covid pandemic, the industry had consolidated sharply. Shopping malls and specialty retailers were quickly going out of style as consumers began to prefer the ease and affordability of shopping online or at the big box stores, which provided selection at affordable prices.
Related: Formerly bankrupt retail chain makes painful decision, closing stores
Not just online sites like Amazon (AMZN) were to blame. Though Amazon certainly benefited throughout the pandemic, when more shoppers chose to make their purchases online, large corporate incumbents had been snapping up market share for years before the pandemic.
Once-massive stores like J.C. Penney, Macy’s and Bed Bath & Beyond had their fair share of struggles prior to Covid. But a rapid consolidation of competitors certainly hastened the downfall of weaker brands.
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Retail had been set for something of a tide change long before Covid. The industry is notoriously difficult to work in, with relatively inflexible hours, low wages and often difficult customers.
Pair those with a rapid adoption of automation — self-checkouts — to replace costly human labor and you’ve got a industry ripe for disruption.
Retail and restaurants have been shifting
Restaurants have followed a similar trajectory. As a subset of the retail industry, the food and service corner of the market has been particularly vulnerable to shifts in consumer behavior.
Restaurants fall under the consumer discretionary industry category, meaning diners choose to, but aren’t required to, eat outside their homes.
Related: Popular bankrupt restaurant chain unloads successful locations
So when times get tougher and consumers rein in spending, dining out at restaurants is one of the first expenses to go.
When Covid hit, even the strongest restaurants began to feel the pinch. Initially, nearly every restaurant had to close for some time early in the pandemic. But a sharp decline in foot traffic was a death knell for many smaller or less financially stable restaurants. And even as dining out roared back, high food costs forced surviving restaurants to make hard decisions.
Most restaurants had to pass higher operating costs onto customers, and in turn many customers chose to simply eat at home. Plus, dwindling interest in the food-service industry made waitstaff and other labor hard to come by. So many restaurants closed up shop.
Popular restaurant chain closes
And now the once-popular sandwich shop Melt Bar & Grilled has made the difficult decision to shutter all its locations.
The Cleveland chain, which specialized in gourmet grilled-cheese-style sandwiches and craft beer, at one point operated 14 locations around the U.S.
It struggled during Covid and never really recaptured the excitement after things began to open up again. On June 14, it filed for Chapter 11 protection in U.S. Bankruptcy Court in the Northern District of Ohio and closed locations.
In September 2024, it rebranded and started to improve its menu in hopes that a broader appeal would attract more customers. But the efforts weren’t enough to save the chain, and founder Matt Fish announced all locations would close permanently with its last remaining location, the original store in Lakewood, Ohio, closing on Jan. 1.
“Once we recognized the restaurant industry was not going back to normal, we made drastic changes,” Fish wrote in a statement on social media.
“In just over two years we pulled every lever possible to save the company. Closed 12 locations, trimmed our staff and corporate team down and reduced or eliminated as many expenses as possible.
“The financial burden of bankruptcy combined with the lack of robust sales have proved to be completely devastating.”
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