Mike’s Diner Bar faces lawsuit after closing its doors, citing rising food prices

With the Covid-19 pandemic closing and eviction looming, running a restaurant has become increasingly difficult for owner Mike Wallau, especially with rising rent, taxes and labor costs.

Wallau said one of the most difficult challenges was ensuring high-quality ingredients were used to create Mike Diner’s signature dishes.

Bi-Rite Restaurant Supply Co., a Bay Area food supplier, filed a lawsuit against Wallau on June 14, seeking nearly $50,000 in damages over an unpaid invoice.

Wallau said he has still been in the process of paying outstanding operating costs since the restaurant closed on June 16.

“I have never been late on a Bi-Rite payment and I fully intend to pay the balance,” Wallau said. “We can’t estimate how much it is.”

Wallau said Bi-Rite’s food and supply costs have increased by about 20% over the year, but he couldn’t keep raising menu prices to keep up.

“These costs that are rising in such a short period of time are simply paralyzing,” he said.

Bi-Rite representatives did not respond to requests for comment for this story.

Customers lamented the restaurant’s closure when Wallau confirmed its closure earlier this month, citing the lack of long-standing institutions in Palo Alto’s Midtown neighborhood.

The business narrowly avoided eviction last year after Wallau paid rent just one day late, and a fire damaged or destroyed four businesses in 2023, not to mention a dozen more in the area that went out of business at the start of the Covid-19 pandemic. pandemic.

Wallau said he opened the restaurant because of the lack of table service options in the area where he grew up.

Wallau said the current state of full-service restaurants is in a dire state.

“Restaurant owners used to stand at the front door, greeting customers,” he said. “Now they can’t even afford to pay their waiters.”

Both sides of the dispute are scheduled to meet and discuss a solution in January next year.

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