Like many people in the neighborhood, one of the places that I have been longing for is Hayes and Kebab.
They have been closed for some time now, but I keep looking up at the sign painted on the wall every time that I pass by, “Hayes and Kebab coming soon.” I called the phone number from their old website. The number has been disconnected. Meanwhile a new restaurant, Kebabs on Hayes Valley, has taken over their old location at 406 Hayes Street, and is doing a pretty good job, too.
After the longing, my mind wanders to the lessons that I learned in microeconomics. If Hayes and Kebab comes back, can two similar restaurants, within blocks of each other in the same neighborhood, both be profitable in the long run? Will consumers switch from other foods to kebabs for the local market to expand, or will they cannibalized the revenues of each other?
This is not a problem unique to the two kebab restaurants in the Hayes Valley. In a city as competitive for the dining dollar as San Francisco, the issue of competition is on top of the minds of many other restaurant owners. The great thing about San Francisco is that the diners are fairly sophisticated, and there are many neighborhoods where a kebab restaurant might thrive. But I still I miss Hayes and Kebab and I wonder.