‘Change is right here’: Gee insists Starbucks closures, Arnie’s shutdown prove a restaurant crisis has arrived

Starbucks announced Thursday that it will close approximately 250 stores across North America this week, representing about 1% of its more than 18,000 locations. It’s the second major round of closures under CEO Brian Niccol, who shuttered 627 stores last year as part of his “Back to Starbucks” turnaround.

Starbucks has not released a list of closing locations, though one downtown Seattle store near Pacific Place is reportedly among them.

Closer to home, Arnie’s, the waterfront restaurant in Edmonds, permanently closed Sunday after 45 years. A partner told The Edmonds Beacon the current business climate does not allow them to continue. Arnie’s had already lost its Mukilteo location in 2023.

Gee Scott and Ursula Reutin, co-hosts of “The Gee and Ursula Show” on KIRO Newsradio, said the two stories are part of the same problem.

“If the math doesn’t math, no love or connection can keep a store open,” Gee said. “Starbucks is an institution, and they are closing down places. So if Starbucks is doing it, what do you think regular businesses are going to do?”

Gee said the closures are not a warning about the future; they’re the present.

“Can we all admit that things are different today?” Gee said. “Most of what everyone is doing is that they are preparing for what the world is going to look like in five to 10 years. GLP-1 is a real thing; people are eating less. The economy isn’t that great for the working class. Inflation is up, workers have to get paid more, and the cost of meat is up. We talk about how change is coming. Uh-uh. Change is right here, in real time.”

Ursula said the numbers back him up. The National Restaurant Association estimates total restaurant expenses are close to 40% higher than before the pandemic. Wholesale food prices are up about 35% since 2020, and average hourly earnings for restaurant workers are up more than 40%.

“Food and labor each consume one third of every sales dollar for a restaurant,” Ursula said. “Around the country, one in three restaurant owners said they were not profitable during the first half of this year.”

Ursula shared that Arnie’s hit personally.

“My parents used to live in Mukilteo. We have family in Edmonds,” Ursula said. “Arnie’s was like a staple for us growing up, for family fancy get-togethers, milestone celebrations.”

Fewer customers, less alcohol, less appetite — and a vicious cycle

Ursula noted the squeeze isn’t just on the business side. Customers are pulling back, too.

“Think about your own habits, are you eating at home more often?” Ursula said. “Customers are squeezed, restaurant owners are raising prices, fewer customers are coming in. It is a vicious cycle. I feel for people who own restaurants right now. You have to be really good to succeed.”

Gee added that declining alcohol consumption is another revenue hit restaurants aren’t talking about enough.

“People are drinking less alcohol,” Gee said. “That was a big money-maker for these restaurants.”

Both hosts pointed to Seattle chef Edouardo Jordan, who they said predicted this wave of closures.

“He told us this was coming,” Ursula said. “And it’s coming unfortunately in many places of the country, but we’re seeing it here for sure.”

Watch the full discussion in the video above.

Listen to Gee and Ursula on “The Gee and Ursula Show” weekday mornings from 9 am to 12 pm on KIRO Newsradio.