New AI-powered store closes in just 2 months in ‘America’s emptiest downtown’

An AI-powered smoothie shop in California drummed up a lot of attention upon its opening, where they promised to use new technology to create ‘perfect recipes’ based on customer preferences has ended up closing in less than two months, as San Fransisco is struggling to recover post Covid-19 shutdown

Labelled a “bespoke AI nutrition” store, a smoothy shop utilising the technology has opened and closed in less than two months, highlighting a key difficulty small businesses in San Francisco are facing.

BetterBlends advertised “Your Smoothie, powered by AI,” when it opened to much positive publicity, but, found themselves unable to stay afloat in less than two months. Co-founders Michael Parlato and Clayton Reynolds, who worked in the shop, handed people their drinks, which were created using AI based on each customer’s preferences.

So what caused the duo to close up shop? Customers say it was a combination of erratic hours, imperfect technology, and a dying neighbourhood that has struggled to find a new customer base since Covid-19.

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One review that was posted on Google said: “I was hopeful for this business. The owners, however, did not understand the discipline to run a restaurant. It was often open late and closed early. They changed their hours after a week of being open. And then 1 day they put up a sign, ‘Temporarily closed, be back in an hour.’ They have not been back in over two weeks.”

According to an investigation from the Guardian: “The fruits in the store window are, on closer inspection, unrecognizable blobs of fruit-coloured things. The clear plastic cups are branded with gibberish characters that don’t spell anything and filled with lumpy smoothie-ish mixtures.”

“They are cartoonishly large in the customers’ hands, one of which has only three too-long fingers. AI image generators have a documented history of failing to produce text within images or realistic human hands,” said the news outlet.

They’re not the only business to fail in the area. As San Francisco became known as ‘the emptiest downtown in America,’ home and business owners have felt that burn. The crisis has been exacerbated by the shift to remote work and massive layoffs within the tech industry. With no one coming into the office buildings in the area, the once-thriving food businesses are struggling to find customers.

The city’s office vacancy rate hit 29.4 per cent in the first quarter of 2023, up from 19.7 per cent from the first quarter of 2022, according to data from the real-estate brokerage firm CBRE. That rate has stalled and is hanging around 40 per cent weekly, making it among the lowest in the nation.

“This area was always packed with people,” recalled Maria Cerros-Mercado to the New York Times, a Mixt manager who built her career in food service downtown. “People would get off the BART, buy coffee, buy this, buy that. There was always just so much walking.”

“It is very ironic that our success created our exposure to failure,” said Wade Rose, president of Advance SF, a business advocacy group, in an interview in Yahoo Finance.

“[San Francisco] hasn’t come back due in large part to the strength of the economy prior, and that the companies we promoted to form the background of San Francisco were the ones that created the technology that allowed everyone to leave and work from home.”