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Del. restaurateurs order up revised business plans

Roger Morris April 14, 2022

The middle of a pandemic is not a great time to launch a new place to eat. Just ask Xavier Teixido. COVID-19 and related issues delayed construction of his new Kid Shelleen’s restaurant in Branmar Plaza in north Wilmington for two years, and it ended up costing about $3 million instead of the planned $2

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SoDel Concepts is among the Delaware restaurants groups reconsidering its business models following the pandemic. | PHOTO COURTESY OF SODEL CONCEPTS[/caption] The middle of a pandemic is not a great time to launch a new place to eat. Just ask Xavier Teixido. COVID-19 and related issues delayed construction of his new Kid Shelleen’s restaurant in Branmar Plaza in north Wilmington for two years, and it ended up costing about $3 million instead of the planned $2 million. But when it opens this spring – finally – at 1812 Marsh Road, it will have incorporated important features not in the original drawings, ones that will help it better navigate the new environment that all eating and drinking establishments in Delaware face as they plunge into a post-pandemic world. “There were huge considerations we were able to deal with that weren’t in the original plans,” said Teixido, whose Harry’s Hospitality Group also owns Harry’s Savoy Grill and Harry’s Savoy Ballroom as well as the original Kid Shelleen’s in Wilmington’s Trolley Square neighborhood. The new Kid on the block will have improved space planning, more room for storage and an expanded outside dining area with 80 seats and room to socialize – the largest alfresco space in the area. What is happening with the Branmar Kid Shelleen’s is indicative of the new world of Delaware dining: Owners of the state’s restaurants that survived the two years since shutdowns began in March 2020 are pivoting to create their own silver linings by instituting new educated guesses as to how, where, what and when customers will want to eat when not preparing meals in their homes. Carrie Leishman, president and CEO of the Delaware Restaurant Association, in a recent interview reminds that “even before COVID, you are talking about an industry with razor-thin margins that now is still dealing with a surge in COVID cases, inflation, labor and supply-chain issues.” A February survey done by the group shows restaurant jobs in the state are still 4,000 short of what they were in early 2019, and, in spite of increased business, 80% of Delaware restaurant owners say they are less profitable now than before the pandemic. For survivors, new business strategies have concentrated on six key areas: Takeout will be key Scott Kammerer, president of SoDel Concepts, which operates more than a dozen establishments south of the canal, reported, “Carryout for us went from 5% to 7% before the pandemic to about 18% now. Before, it was a convenience for people, but now it’s part of the dining experience,” with many meals going out in components to be reassembled and added to when they reach the customer’s kitchen. Marc Ashby, head of Ashby Hospitality Group, which includes Deer Park, McGlynns Pubs and Cantwell’s Tavern, said, “Cantwell’s has surprised me because I didn’t expect people to order takeout from a fine restaurant and not have the restaurant experience.” Teixido said that, “Harry’s clientele is older, but the pandemic forced them to become tech-savvy in ordering takeout.” Leishman said the state’s “quick-service industry already had takeout and delivery, so they were the quickest to adapt.” However, unlike quick-service, most dine-in restaurant owners say they still do not plan to institute delivery services. And some expect less change. Carl Georigi, head of the five-restaurant Platinum Dining Group, adds, “We’re already seeing most customers returning to their old habits and wanting the in-restaurant dining experience.” Outdoor dining will grow Almost everyone who already had outdoor dining is rapidly expanding it. Georigi said that his two restaurants that did not have outside dining – Eclipse and Taverna – have added it with great success. Some owners have installed heat lamps to expand the season. But Ashby’s said his McGlynns pubs located in strip malls have no outside areas, and Tyler Akin, chef-owner of Le Cavalier at the Hotel DuPont, said his clientele seems to prefer dining inside, even though the city expanded outdoor space on Rodney Square. Return to pre-COVID staffing “Like with 9/11, the pandemic brought our employees closer together,” Kammerer said. “Now is the golden age for restaurant employees because you can write your ticket.” He believes employee development programs will be key for staff retention. “There are employees waiting tables who want to be in management. We have our chefs running classes not only for cooks and for those providing services,” Kammerer added. Georigi said that Platinum, like most restaurant employers, had to let people go during the pandemic but is now quickly moving toward full employment. “People who are re-entering the business are looking for stability, and we can provide that across our restaurants. We had 407 employees before the pandemic, and we have 380 now – about 10% below where we want to be,” he said. Menus, hours scaling back up Many restaurants used the pandemic experience and shortage of employees to look critically at what they are offering on the menu and what hours they are open. However, others say they are already returning to full menus and old hours. “We’re contrarians, often 180 degrees from everyone else,” Kammerer said. “Our menus and hours have stayed the same.” But there are some offerings that have changed. “You certainly are seeing less buffets than before,” Teixido said, and the same is true with salad bars. “It remains to be seen if they will come back.” Event scheduling and catering are picking up, especially with warmer weather coming and are expected to again become big revenue gainers. Live entertainment is already coming back. Supply chain forces innovation Everyone notes there have been shortages of what’s available from suppliers, especially with crab meat, and what was available often came in at high prices. Rather than remove them from the menu, most restaurants decided they would let the customer decide how much a crab cake was worth. With inflation and continuing supply issues, everyone agrees that menu flexibility is important to their new plans. Kammerer noted that supply issues may conversely affect big chains and fast-food places more than standalone restaurants. “Our chefs are versatile,” he said, “so if a meat or vegetable isn’t available, you substitute something else.” Georigi agreed, saying, “There have been times when we’ve 86’d [dropped] something off the menu, but we also are doing inventory twice a week and starting conversations earlier with our suppliers to find out if there may be a shortage.” Akin said that he orders seasonal items, such as turkeys, weeks, or even months, earlier than before. New technology coming “We’ve made our to-go website more efficient,” said Ashby, some of whose restaurants are also using tableside technology to place orders. “The server can ring it in as the customer is ordering it.” Akin said Le Cavalier still has QR codes available for tech-savvy customers. “More payment at tableside – which has long been available in Europe – is coming next,” Teixido said. Kammerer also pointed out that data mined from different ordering platforms “can be collected and analyzed” for marketing purposes. Leishman said her membership is working together to help businesses recuperate during 2022. “Rather than lose members during the pandemic,” she said, “we gained members. They all look at the association as a needed resource and as their advocate.”

Del. restaurateurs order up revised business plans

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