In recession, what do you believe is the #1 reason good restaurants in Los Angeles and O.C. are shutting down?

James I will have to disagree that rich people are suffering, no matter how the economy is they are well off (much more than other classes)... now about middle class their budget has droped so instead of going to some of the finer resturants every so often they are cutting back to cheaper alternatives. For the lower class, they do not have much of an impact at those types of resturants..

NOW to answer the question. There is no 1 reason.. it is a large number of combined reasons... However I would say the more significant reason is the fact that the cheaper resturants target their consumers by being a low cost provider.. this is certainly more appealing to many people in a time when they have to cut back a little...

So in this instance the low cost strategy beats the differientiation strategy..

While some of the top resturantes are very different, thus the high cost, lower cost resturants and fast food places are taking those customers..

Not only do those nice resuturants compete with cheaper alternative they also compete amongst themselves.. so your going to see a few survivors, but some are going to not make it...

Well, many of the people being hit hardest are middle class and rich people. Now in good restaurants in LA and O.C. many of the customers are rich or middle class. This lack of customers means their budget is lowered. When the budget is lowered the quality of the food decreases. And when the quality of the food decreases less customers want to eat there. It's a vicious cycle.