I got back from a tour of Europe a couple days ago with my family, visiting Florence/Tuscany, London and Paris. I used to go to all of these places quite a lot, so I have a reservoir of perspective, but it’s also been a few years. This trip, I went with a SFSVA lens to observe what gathering establishments are doing and how community members interact with them vis a vis what we see in San Francisco.

First, let’s get the obvious out of the way. Whether it’s coffee in the morning or the after work aperitif or pint, getting out of the house and into the community is culturally much more valued in all three of these places than it is in the United States. There is simply much more demand for cafes, restaurants and bars, even compared to San Francisco’s most bustling neighborhoods. 

That said, I observed some of the same dynamics business-to-business. In all three cities, if there’s an over-saturation on the same street or in the same neighborhood of similar products, there are definitely winners and losers. Also, the human instinct of being drawn to the bustling establishment (because why is the other one empty?) is a universal concept.

So why is there more demand and the hospitality industry seems healthier in the European cities? While London and Paris are obviously much larger, all three cities in their neighborhoods have similar density to San Francisco. I looked at a few factors.

Cost Balance

I tried to do analysis that would give a broad stroke comparison between these cities. Admittedly I spent time in nice, trendy neighborhoods, so my comparisons are about equitable to the equivalent of Pac Heights/Hayes Valley/trendy Mission. I wanted to compare average rents with average costs. The products that are universal in all these cities are coffee and beer, so think of this as two-bedroom apartments, an Americano or drip coffee, and a pint of some semi-premium beer. Also, right now the exchange rate with the pound is $1.28 and the Euro is about even, so I’m ballparking both into dollars.

Florence

Rent: $1400

Coffee: $3

Beer: $4

London

Rent: $3000

Coffee: $4

Beer: $5

Paris

Rent: $3600

Coffee: $3.50

Beer: $5

San Francisco

Rent: $3800

Coffee: $6.50

Beer: $10

What these observations tell me is that the cost of doing business in San Francisco has to be much higher even than in London or Paris, or that the increased demand in those cities allow businesses to make up the difference with volume. My guess, however, is that rent and labor costs are lower. If that’s the case, and rents are similar in at least London and Paris, yet the average cafe worker is making less money, where do they live and how do they make their life work? Taxes are higher in these places. Do they save so much money by not having a car that is makes up for it? Doubt it. I’d love to hear insight from others as to how this balance works as I only have what I observed and what I can research through Google.

Public Safety

All of these cities have decent levels of quality of life crime and low levels of violent crime. All of these cities have a presence of homeless people and of drugs. San Francisco simply has waaaaaay more visible homeless encampments and visible intense drug abuse per capita. In three weeks in the other three cities, while I saw a regular homeless presence and people definitely dealing with drug abuse, I did not see one person with the fentanyl/meth psychosis that I will see many times just today in San Francisco. Not one dead-eyed zombie.

Are those cities less permissive? Maybe, but I can’t be sure. Are the drugs we have chemically different? If they’re “all coming from China and Mexico” as many say, likely not. Either way, the results are radically different on both visible homelessness and drug abuse between those three cities and San Francisco. Does this affect the health of the restaurant/cafe/bar businesses in all three cities? The correlation is unclear, but in San Francisco, I hope we find out! 

Menu Makeup

One thing that stuck out to me as different between the European cities and San Francisco is that I found it much more common for an establishment to offer less ingredients prepared in much more various ways. Call it the taqueria/pizza model that can be very profitable when busy in San Francisco. While there are definitely still some European restaurants especially in London that offer 15+ menu items with ingredients mostly unique from each other, the taqueria model is more prevalent. This could be a contributor to keeping costs passed on to the consumer down.

Simplicity of Transacting

Overall, the transacting experience was much simpler in all three European cities. The handheld devices, which are becoming more prevalent in San Francisco, definitely help. Also, the costs are easier to understand and bills easier to read. Tips are either added on as standard but optional (you can ask to have them adjusted) or simply built into the cost. There were no equivalents to “SF mandate” or dine in charges. Basically, it was always a more frictionless experience.

Retail Isn’t Dead

Retail isn’t my bag, but it’s adjacent and important to social venues. In the context of what we’ve been hearing as narratives around downtown and what happened to Westfield/Nordstrom, I observed that in-person retail is definitely NOT dead. Just like how malls in Corte Madera, Walnut Creek and Stanford are thriving, the retail districts in these European cities are thriving with a ton of foot traffic, energy and commerce. Also, shoppers and diners there feel safe, which I believe is connected.

Overall

In these European cities, costs seem to be more in control, the cities seem to be creating a more hospitable environment for residents and tourists, and there may be some other minor factors that Europe may have figured out a little better. That said, what can San Francisco’s city government learn from these other cities? I/we plan to have more conversations to better understand what’s working from a policy level in these cities that we can implement here to make the ecosystem better, whether that means more sustainable businesses, more consumer demand or both.