Yet another EG business closing shop because the rent is too high

This topic contains 16 replies, has 0 voices, and was last updated by  Aggies49 1 year, 11 months ago.

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  • #177533

    jusme
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    What can we do? This is about the 20th business I know of from the last 10 years that closed shop due to high rent.
    https://m.facebook.com/story.php?story_fbid=10153536986002102&id=295951997101

  • #294201

    newmom
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    I don’t know there is anything that can be done except shop small businesses more than chains. It’s always hard for small businesses to compete. In this case, she was competing against the grocery stores and other bakeries.

  • #294197

    joy
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    That sucks. Our family did our part, that is for sure. Her caramel cake is devine.

  • #294206

    Bainc
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    That’s too bad but I’ve never heard of them before. Where were they located?

  • #294203

    Scarlet
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    She is located at Laguna Blvd. & Laguna Park Dr. The shopping center where Big 5 and O’Reilly’s is located

  • #294208

    Aggies49
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    This is a very sad loss for the community. Terri and Herman are amazing business owners and very kind people. I hate to see them close because of high rent. It’s a shame to see another great small business close up shop.

  • #294192

    EGL Admin
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    I wonder if the rent was actually doubled. That’s not a very busy center and they have had quite a bit of turnover. Making money in the dessert part of the restaurant businesses has to be hard. It’s such a narrowly focused part of the industry. I think we went there a couple of times. It was good. I’m not a big dessert person. I like it but I just don’t really go out of my way to get it.

  • #294205

    gearshark23
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    Never heard of them. I never go to that shopping center anyway. Even chain businesses are hurting.

  • #294198

    LC
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    Was the rent too high or the volume too low? Rents today are down about 35% from the mid 2000s, now at mid 1990s levels where they have been since 2009 or so, and the costs to build and maintain are at 2016 levels. That is why we see very little retail development–you cannot make any money anymore. Usually rents find their own equilibrium–meaning they stabilize at a certain percentage of gross sales which depends on the use and category. Over 39 years of doing commercial real estate this July 1, I can remember exactly one tenant who told me he was closing because he missed the market. The others blame high rent because it’s convenient and takes the heat off of them for their failures.

    The other one is “no one knows we’re here.” Well yes, when you’re not willing to pay for great exposure and rent the cheap seats, you cannot expect the same result. But those are thoughts that get lost in the wind when a tenant is failing.

  • #294202

    violarose
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    Oh that’s too bad. I hope they realize they didn’t lose anything by concentrating on health more. May they have much luck in their next adventure.

  • #294204

    norules
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    I love desserts, but rarely go to a dessert place for pie or cake. I get that they have to charge a lot for a slice of pie to pay rent, but I have never found a dessert place worth $4-6 for a slice of pie or cake. That is the bottom line for me, do I want to pay that much for the slice of pie. How many dessert places have closed in EG? We just do not have the market for retail dessert place. I wish them well on the commercial kitchen and taking orders. That will be a lot cheaper than renting a retail place.

    Freeport Bakery, Ettore’s, and Rick’s Desserts Diners are probably the most successful in Sacramento area. The key thing probably? The opened a long time ago when things were cheaper and built up a reputation. I personally am not a fan of all three places, but they do have a huge following.

  • #294193

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    @lc 126376 wrote:

    Was the rent too high or the volume too low? Rents today are down about 35% from the mid 2000s, now at mid 1990s levels where they have been since 2009 or so, and the costs to build and maintain are at 2016 levels. That is why we see very little retail development–you cannot make any money anymore. Usually rents find their own equilibrium–meaning they stabilize at a certain percentage of gross sales which depends on the use and category. Over 39 years of doing commercial real estate this July 1, I can remember exactly one tenant who told me he was closing because he missed the market. The others blame high rent because it’s convenient and takes the heat off of them for their failures.

    The other one is “no one knows we’re here.” Well yes, when you’re not willing to pay for great exposure and rent the cheap seats, you cannot expect the same result. But those are thoughts that get lost in the wind when a tenant is failing.

    Hard to believe that the rent would have doubled unless they had some type of reduced rent deal previously.

  • #294194

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    @norules 126381 wrote:

    I love desserts, but rarely go to a dessert place for pie or cake. I get that they have to charge a lot for a slice of pie to pay rent, but I have never found a dessert place worth $4-6 for a slice of pie or cake. That is the bottom line for me, do I want to pay that much for the slice of pie. How many dessert places have closed in EG? We just do not have the market for retail dessert place. I wish them well on the commercial kitchen and taking orders. That will be a lot cheaper than renting a retail place.

    Freeport Bakery, Ettore’s, and Rick’s Desserts Diners are probably the most successful in Sacramento area. The key thing probably? The opened a long time ago when things were cheaper and built up a reputation. I personally am not a fan of all three places, but they do have a huge following.

    In my opinion, most dessert places are overrated. We have used all 3 you mentioned and the cakes are good, but they aren’t that good to drive that far to get it. Whenever my wife has a party for a friend, they get it from Ettore’s. Been to Rick’s a couple of times, it was good, but we were out that way and we had 10 people they wanted dessert. I think a dessert place has to be diversified and offer other things. Like a Leatherby’s. Or like Mrs. Kays. She offers other things and has some light lunch selections.

    I’m not their target market. Dessert and alcohol are two things I don’t care to pay a lot of $$ for. I would take a lemonade or a soda over a $40 bottle of wine.

  • #294207

    Bainc
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    I don’t think the typical Elk Grove family has enough disposable income to support all the specialty dessert stores. I’ve never been to snow bites, vampire penguin, ms Kay’s, cream, etc. I’m sure they’ll all great but my budget says no and my waist line thanks me.

  • #294199

    LC
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    I think the disposable income is there, but the priority of trading cash for a slice of pie or whatever is not. For us, it’s Karen’s in Folsom only, Ettore’s is a distant second choice, haven’t been to the others, and when we get something it’s either dine in or an entire cake, pie, etc. Who goes out for a slice?

    Look at Mrs. Kay’s and Mariel Black. Those women work their butts off promoting, but their primary targets are enterprise and gifts, not a slice of something. My daughter used to pick up goods from Mariel when she had the Stockton territory in her past job. I don’t know what she spent–$30-$40 probably–something where the proprietor can actually pocket some money.

    This month I’ll have a pretty good gross from the online bbq website–as much as some small stores might have–and i have zero overhead and don’t put any effort into it. I make 7.5% on my sales, net net net before taxes. Why would I want a retail store where my goal would be 20% clear profit, but I’d have to work the store to get that, have plenty of inventory risk, and always looking over my shoulder at the competition, unless I wanted to go big and have the biggest and best in the territory. Small neighborhood retail is still a great location decision for food and service, but beyond that we’re seeing a shrinking universe of prospects. For those in those two categories if they aren’t working day and night at promotion, and do not stand out as a premiere choice and great value, it’s simply making a living, often quite meager.

  • #294195

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    @lc 126387 wrote:

    I think the disposable income is there, but the priority of trading cash for a slice of pie or whatever is not. For us, it’s Karen’s in Folsom only, Ettore’s is a distant second choice, haven’t been to the others, and when we get something it’s either dine in or an entire cake, pie, etc. Who goes out for a slice?

    Look at Mrs. Kay’s and Mariel Black. Those women work their butts off promoting, but their primary targets are enterprise and gifts, not a slice of something. My daughter used to pick up goods from Mariel when she had the Stockton territory in her past job. I don’t know what she spent–$30-$40 probably–something where the proprietor can actually pocket some money.

    This month I’ll have a pretty good gross from the online bbq website–as much as some small stores might have–and i have zero overhead and don’t put any effort into it. I make 7.5% on my sales, net net net before taxes. Why would I want a retail store where my goal would be 20% clear profit, but I’d have to work the store to get that, have plenty of inventory risk, and always looking over my shoulder at the competition, unless I wanted to go big and have the biggest and best in the territory. Small neighborhood retail is still a great location decision for food and service, but beyond that we’re seeing a shrinking universe of prospects. For those in those two categories if they aren’t working day and night at promotion, and do not stand out as a premiere choice and great value, it’s simply making a living, often quite meager.

    Getting business owners to understand promoting and advertising is not easy. A Filipino restaurant was opening earlier this year. Late last year the owner contacted me about advertising and I said sounds good when you’re about to open let me know and we can help promote it. About a week or so before the opening he posted they were opening so I contacted him and asked if he still wanted to advertise and I could come in take some photos and do a live video. He said no. He has posted something on his FB page and it got like 60 likes and so he thought he was in like Flynn and that meant it would be successful. within 2 months they were closed. Not that advertising would have saved them. It was basically a breakfast place out in old town Franklin. Bad location and no marketing didn’t help. It’s one of those things where a person does something and all their friends think it’s a great idea and they come out the first week and then it dies out. It was a poorly conceived concept.

    I don’t think Terri did much marketing outside of doing EGO a few years ago. I contacted her numerous times about marketing. Never heard back.

  • #294200

    LC
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    @EGL Admin 126384 wrote:

    Hard to believe that the rent would have doubled unless they had some type of reduced rent deal previously.

    That’s exactly what happened; it’s the only thing that could have happened. I am writing a lease right now where the rent will more than double over 5 years, and at the 5th year he will be where most others in the center are today. Why–because it’s a very odd space with limited exposure and parking. If this guy doesn’t take it, we could be sitting on it for another year, and I told him that and told him I’d make it worth his while. It works for him so he jumped on it, and I’m glad to have him. But ya, the rent will have doubled. SMH.

  • #294196

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    @lc 126390 wrote:

    That’s exactly what happened; it’s the only thing that could have happened. I am writing a lease right now where the rent will more than double over 5 years, and at the 5th year he will be where most others in the center are today. Why–because it’s a very odd space with limited exposure and parking. If this guy doesn’t take it, we could be sitting on it for another year, and I told him that and told him I’d make it worth his while. It works for him so he jumped on it, and I’m glad to have him. But ya, the rent will have doubled. SMH.

    It’s kind of like what happened to the General Store that took over for the EG Brewery. I think they got a favorable lease for the first year or so and then it went up. Of course they blamed the landlord because it went up even though they agreed to that lease.

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