Matthew Suárez

Buoyed by drink sales, the takeout business at the two Señor Grubby’s restaurants flourished.

The restaurant business, as Bette Davis once said about growing old, ain’t no place for sissies. The hours are long; the profit margins, razor-thin. Customers are notoriously fickle, and a few bad Yelp reviews can turn today’s hot spot into tomorrow’s ghost town. On top of that, in markets such as San Diego, soaring real estate values can spell disaster when leases come up for renewal.

And that was before COVID-19.

Photograph by Matthew Suárez

Within days of the World Health Organization’s March 11 declaration of a global pandemic, California’s governor, Gavin Newsom, ordered the closure of all non-essential businesses, including bars and restaurants.

And an already precarious business model took a sucker punch to the gut.

Some of San Diego County’s more than 8,100 restaurants remained open, offering takeout and delivery only. Others closed temporarily. Some closed for good – including Troy’s Family Restaurant in Clairemont, Mother’s Saloon in Ocean Beach, and the San Diego-based Souplantation chain, which shuttered all 97 of its all-you-can-eat buffet restaurants in the wake of an admonition by Frank Yiannas, the FDA’s Deputy Commissioner for Food Policy and Response, that restaurants should “discontinue operations such as salad bars, self-service buffets or beverage service stations that require customers to use common utensils or dispensers.”

Here in San Diego County, restaurants were allowed to reopen the last week in May, but due to social distancing requirements most are running at 50 percent or less of their prior capacity – particularly after state officials, citing a spike in COVID-19 cases, on July 6 banned all indoor dining for the next three weeks. Tables have been removed or roped off to make sure every party is at least six feet from everyone else; a number of restaurants, such as the Local Tap House and Kitchen in Oceanside, have converted a portion of their parking lots into outdoor seating to make more room.

With summer here, restaurateurs remain in survival mode. Here are some of their stories.

Marketing takeout

Tom Spano is the 56-year-old general manager of Piatti Italian Restaurant and Bar on Avenida de la Playa in La Jolla Shores, a mainstay of the community’s dining scene for nearly 30 years.

The traditional Italian trattoria, with an open kitchen and a stone-hearth pizza oven, is a favorite among locals and draws heavily from tourists of the nearby La Jolla Shores beach. Piatti is owned by a limited partnership that owns and operates nine restaurants, mostly on the West Coast.

Spano remembers hearing about a novel coronavirus spreading from China into neighboring Asian countries and then Europe and thinking, “This will never happen to us. This is the United States — we’re going to get this thing nipped in the bud before it becomes a problem.”

Then came the World Health Organization declaration of a COVID-19 pandemic on March 11, and he and his team had to do some quick thinking, Spano recalls.

“We’re down to 14 tables, or 25 percent of capacity,” says Tom Spano, general manager of Piatti Italian Restaurant and Bar in La Jolla Shores. He’s encouraged by the emergency executive order San Diego Mayor Kevin Faulconer signed on July 7 that allows restaurants to expand outdoor seating onto sidewalks and parking lots without cumbersome regulatory requirements.

Photograph by Thomas K. Arnold

“I remember on Sunday, March 15, when Governor Gavin Newsom ordered restaurants to cut their capacities in half — we tried it that night, leaving all our tables out but taking away the chairs from half of them,” Spano says. “People were coming in and asking us, ‘Why can’t I sit there?’ So the next day I thought, ‘Let’s just take out half the tables, as well. So I loaded up a truck and took them all in my garage. And then the very next day we were told we had to shut down completely except for takeout, and I remember thinking, ‘Ugh, I could have left those tables in the restaurant.’”

At that point, Spano says, “we thought we’d be shut down for two weeks, so we started painting the walls, painting the tables — all this deferred maintenance we never got around to doing before because we were always open. I even put new linoleum in my office, and all the while we were doing takeout.”

Takeout accounted for no more than 10 percent of Piatti’s business prior to the pandemic, Spano said. After two weeks and still no opening date, he says, he and his team began aggressively marketing takeout, relying largely on regular customers, “who really supported us during this time.”

“We were able to do about 20 percent, 25 percent of our normal business, just with to-go,” he says. “And we were feeling really good about that, because we knew of so many other places that were only doing about 5 percent of their regular business.”

Strict sanitation controls were put in place for people coming into Piatti to pick up their food orders. “In the beginning, we weren’t encouraged or required to wear masks, and we couldn’t get any hand sanitizer, so we had to instruct our guests to wash their hands in the bathroom before they picked up their food and used our credit card machine,” he says. When the mask order came in, Spano says, “everyone started making cloth masks – my neighbor, even one of our bartenders. Then we were able to get hand sanitizer and that made life a little easier.”

To save money, Spano says, all but a skeleton crew were furloughed. Rent wasn’t a problem, because the partnership that owns Piatti owns the building. And to help workers who had been sidelined, he says, he and others who remained at the restaurant collected tips from to-go customers, which they then passed on to their furloughed compadres.

“The community really supported us,” he says. “I had two customers, in particular, who were extremely generous – one dropped off a check even though he didn’t order any food, and the other gave us a $500 tip.”

By the time Piatti reopened on June 4, Spano says, he and his team had collected more than $35,000 in tips that were then dispersed to the furloughed staff.

The dining experience at Piatti is a lot different than it used to be. Before, there were 26 tables inside the restaurant and another 24 on the outdoor patio, making a total capacity of 195. After the June 4 reopening, there were just 15 tables indoors and 14 on the patio – and as of July 6, inside dining is again no longer allowed.

“We’re down to 14 tables, or 25 percent of capacity,” Spano says. He’s encouraged by the emergency executive order San Diego Mayor Kevin Faulconer signed on July 7 that allows restaurants to expand outdoor seating onto sidewalks and parking lots without cumbersome regulatory requirements. “We’ll see what happens,” he says. “I’m cautiously optimistic.”

Since the early June reopening, Spano says, “we’ve been following all the county guidelines. We have people who are just walking around, sanitizing everything that a guest touches: tables, chairs, menus. If a table is next to a wall, the wall gets sprayed down. Bathrooms are sanitized every half hour. There’s nothing a customer touches that somebody else has touched – no sugar caddies, no salt and pepper shakers. If people order coffee or tea and want a sweetener or cream, they get little individual packs. And if they want salt and pepper or chili flakes, we bring them out and after they are done using them they go back into a box to be sanitized.”

Employees are only allowed in after a temperature check and a brief questionnaire they need to fill out on a computer before they clock in, Spano says. “They’re asked if they have a cough, a tickle in their throat, a fever, and if anyone they know has been exposed to COVID-19,” Spano says. “We’ve had a couple of situations where an employee has a spouse or a brother who works somewhere where someone’s tested positive. We make them stay home until they get tested and they get their test results back and they’re negative.”

Business at Piatti during June was running at about 75 percent of normal, Spano says – buoyed by takeout, which appears to be holding steady and may be in for another uptick given the ban on indoor dining.

“I don’t see things going back to normal until there’s a vaccine,” he says, “but in the meantime, we’re doing the best we can.”

Salvation came

Belynn Gonzales was devastated when the shutdown orders came. She has been running Garcia’s Mexican Restaurant on State Street in Carlsbad’s historic “village” since 1979, making a comfortable living but working upwards of 60 hours a week. The restaurant had been opened by her grandparents, who raised her, back in 1960. Gonzales, now 64, remembers working there as a child, busing tables while her grandmother worked the kitchen and her grandfather ran the barbershop next door.

Belynn Gonzales was devastated when the shutdown orders came. She has been running Garcia’s Mexican Restaurant on State Street in Carlsbad’s historic “village” since 1979.

Photograph by Thomas K. Arnold

The grandparents retired in 1970 and leased out the restaurant to another operator while Gonzales pursued an accounting degree at San Diego State University. After she graduated, she decided to reopen Garcia’s, at the tender age of 23.

For years, her business had consisted primarily of serving customers inside the restaurant; 14 tables seated two to four people each; another seven tables outside sit on a curbside patio that takes up three parking spaces under an allowance from the city. Twenty-five percent of her business came from catering, mostly pharmaceutical industry events; takeout accounted for just five percent.

The pandemic and shutdown orders happened quickly, with little warning. “It was a nightmare,” Gonzales recalls. “You know your monthly expenses, and all of a sudden it turned around to where we were able to do takeout only, so it was a scary feeling.”

Gonzales tapped into her savings to keep the business open, and put large hand-lettered signs outside announcing the restaurant was open for takeout. She offered home delivery and a 25 percent discount on all menu items.

Salvation came when the state Department of Alcoholic Beverage Control, the state agency that oversees licensing for alcohol at restaurants and bars, allowed restaurants to sell beer, wine, and cocktails to go, which previously had been forbidden. The only stipulation was that the drinks have “a secure lid or cap” and are sold with food.

“That more or less saved the day, particularly after people started receiving their unemployment checks,” Gonzales said. “The first two weeks [of the shutdown] were really slow, but then, during April, it was like New Orleans — everybody was tired of being locked up and they began ordering takeout and walking around the village with drinks in their hands.”

Even so, she said, total sales at Garcia’s Mexican Restaurant for the month of April were just 18 percent of what they had been in April 2019. It wasn’t until the end of the month and early May that takeout — both of food and of drinks — soared. “People were out and about, and what we found was that because we were open while a lot of other restaurants were closed, a lot of people discovered us — people who had never been our customers before.”

Garcia’s ended May with business at 75 percent of what it had been the previous May, Gonzales said, “and it was all takeout, since we didn’t get clearance to reopen until the end of the month.” When restaurants were allowed to reopen, the inside dining room lost six of its fourteen tables due to social distancing requirements, while outside, on the patio, Garcia’s lost only three out of nine.

Even with the reduced capacity, Gonzales says, business was actually up from what it was a year ago, with no slowdown in takeout. But with the July 6 ban on indoor dining, she says, she’s more than a little worried.

“We are going to start doing home delivery again, and we do have the patio, outside,” she says, adding that she’s considered putting up some tables out back, in the small parking lot. “But it just looks so ugly out there, I don’t know….”

Gonzales says she and other restaurant owners are lobbying the city to turn State Street into a pedestrian mall, at least during the summer, to allow for more outdoor dining — similar to what the city of San Diego has done in Little Italy.

“Let’s get tables out there, strolling musicians, a real European flair,” she says. “I think that would be so awesome.”

All that government cheese

Justin Jachura is the managing partner of a North County restaurant chain that was born in 2005 when he and a couple of friends — they had all attended Buena Vista Elementary School in Carlsbad — decided to open a taco stand in Oceanside.

Today, Jachura’s operation consists of six restaurants, about 125 employees and annual revenues in the millions. Jachura, 45, oversees three Los Tacos taco stands, two in Oceanside and one in Temecula; two sit-down Señor Grubby’s Mexican restaurants, one each in Oceanside and Carlsbad; and a Grubby’s Poke and Fish Market in The Shoppes at Carlsbad.

When the pandemic hit, he recalls, the first thought that came into his mind was “how are we going to survive, how are we going to keep our employees working and basically not lose our ass? Nobody knew there was going to be this huge supplemental income from the government, so we figured we had to stay open and figure something out. All six locations immediately shifted to takeout, but then the mall announced it was closing so we closed the poke place — that one took the hardest hit.”

No sooner had Governor Newsom issued his stay-at-home orders than the March rains came. It was a double whammy, Jachura recalls. “Those first two weeks were depressing,” he says. “It was a record low — we had close to a six-figure loss for the month. Business was down about 60 percent,” kept afloat largely by the three taco stands, which had always derived the bulk of their business from takeout.

Justin Jachura says the ABC’s decision to allow alcohol sales to go was his salvation, triggering an unexpected surge in business at the two Señor Grubby’s restaurants in Oceanside and Carlsbad.

Photograph by Thomas K. Arnold

Like Gonzales, Jachura says the ABC’s decision to allow alcohol to-go sales was his salvation, triggering an unexpected surge in business at the two Señor Grubby’s restaurants in Oceanside and Carlsbad.

“I had found out about it [the ABC decision] the night before,” Jachura says. “Some industry friends called me around 10, and right away I figured that in order to stand out we would offer two-for-one cocktails to go. I was up until 1 the next morning, designing stickers to put on the lids, and then I drove out to the poke restaurant we had closed and grabbed all the 16-ounce cups with lids I could find and brought them to Grubby’s. We began offering two-for-one cocktails the next night, within hours of the ABC announcement.”

Buoyed by drink sales, the takeout business at the two Grubby’s restaurants flourished, especially at the Carlsbad location, which is right on the town’s main drag, Carlsbad Village Drive, two blocks east of the beach. “April started bouncing back fast,” Jachura says; revenues amounted to about the same as they had been the year-ago April.

Then came Cinco de Mayo, when Jachura learned, firsthand, the meaning of the adage, “too much of a good thing.”

“What began happening during this pandemic was the way people order food went very much virtual, either through restaurant websites or through delivery services like Grubhub or DoorDash,” he says. “Before, people would either call or stop in to order takeout, and they would know right away how busy we were and how long their orders would take. But when you click a button, either on your computer or on your phone, you no longer have this visibility. At our Carlsbad location alone, we had $5000 in orders coming through in one hour, and it completely overloaded us. It was the first time ever I felt not in control. It got to the point where by 6, I had unplugged the phones, but there was nothing we could do — the online orders kept coming in. The printer would print orders until it ran out of paper, and as soon as we put a new roll of paper in, it would start up again. We finally turned off DoorDash and kept hitting the delay button on Grubhub; then I called my web guy and told him to take our website down. What we didn’t know was that Google had streamlined ordering so that when you went to our Google listing you could place an order, so we wound up taking down our Google listing too — that’s how bananas it got.”

Talk about a perfect storm. “I think it was a combination of people being caged up like animals for a month, easy access to online ordering, and people getting government checks, all that government cheese,” Jachura says.

Even with the poke restaurant out of the picture, Jachura says, chainwide revenues in May were up 7 percent from the previous May. He hasn’t yet tallied numbers for June, but expects even better tidings now that the dining rooms at the two Señor Grubby’s locations are once again open. Seating capacity is at 65 percent of what it was before the pandemic, he says, and in Carlsbad, he’s created additional outdoor seating by extending the back patio into the parking lot.

The biggest, and most pleasant, surprise, he says, is that takeout has held up even though the restaurants are now open. Prior to the pandemic, he says, takeout accounted for 15 percent of chainwide revenues. Now, it’s holding steady at 50 percent.

“I think the restaurant business is changed forever,” Jachura says. “Every delivery service spiked, and if it takes 30 to 40 days to form a habit, people have been using these apps for two or three months now and I don’t think they’re about to stop. Takeout is the new normal for the restaurant business. It’s gotten so that on weekends and Taco Tuesdays, we’re shutting down all our delivery apps – it’s crazy how busy we’ve gotten.”

Jachura is so optimistic about the future that he plans on opening a new restaurant in San Clemente and as many as two others in the North County area over the next year. He’s looking into opening a “virtual kitchen” to cook exclusively for takeout and take the pressure off his restaurant kitchens.

“I was telling my partners last year we should look into renting a warehouse and building multiple virtual kitchens and leasing them out to other people,” he says. “Just last week, I got a call from a company that’s doing precisely that, wanting to know if we are interested in leasing space. I thought, ‘Damn it, someone got ahead of us.’”

The July 6 ban on indoor dining, Jachura says, won’t have much of an impact, because “we’re already set up for this – all our locations have some sort of patio seating, and we’ve never let up with to-go. We’ve been through this before.”

Still, he believes the ban on indoor dining is a prime example of governmental overreach. “I understand what they’re trying to do,” he says, “but I don’t see the data to support it. It’s crazy — it’s somewhat asinine. I hate to see my fellow restaurant owners suffer for no reason, particularly because we’ve put into place every single safety protocol they asked us to do.”

Sanitize the tables

Tom Tarantino comes from a restaurant family. His cousin, John Tarantino, owned the popular John Tarantino’s restaurant in Point Loma in the 1970s, and as a teenager, he used to work in another of the family’s restaurants, Valentino in Mira Mesa.

Now 54, Tarantino owns and operates two San Diego restaurants: RoVino Rotisserie + Wine, a high-end Italian restaurant on Kettner Boulevard in Little Italy that he opened in 2015, and the RoVino Foodery, a casual Italian “comfort food” restaurant, deli and market he opened in East Village in 2019.

He began the year with much optimism, he says — especially for the newly opened Foodery.

“We were prepared for a huge summer,” Tarantino says. “We were excited about the Padres, excited about Kaaboo, excited about Pride, excited about Comic-Con and all the other conventions. And then, this….”

As soon as Governor Newsom ordered restaurants to limit their business to takeout and delivery, Tarantino says, he shut down RoVino Rotisserie + Wine completely. The restaurant specializes in authentic Sicilian and Northern Italian food and is known for its extensive wine selection. High-end restaurants don’t generally do much business in takeout, Tarantino says. Customers pay, in part, for the atmosphere, “the great wine selection, and the five-star service,” he says. And the food tastes much better when it’s served fresh.

“We were prepared for a huge summer,” says Tom Tarantino at RoVino Foodery in East Village. “We were excited about the Padres, excited about Kaaboo, excited about Pride, excited about Comic Con and all the other conventions. And then, this….”

Photograph by Thomas K. Arnold

“Quite honestly, when you order, say, lamb chops or steak, that food doesn’t really hold up well to go,” Tarantino says. “When you order lamb chops or a steak medium, we make sure it goes out medium, but if you order it for takeout, it continues to cook, and you’re not getting it at its best at that point.”

The Foodery remained open, with the market deemed “essential” and the rest of the menu, including many pasta dishes, ideal for takeout, Tarantino says. “There was a big uptick in meals for two,” he says. “We catered to people who typically went out to restaurants and were now doing takeout, and they wanted good food, not fast food. All of our food is homemade, and it’s really what people wanted for their families.”

RoVino Rotisserie + Wine reopened in early June at 50 percent capacity, Tarantino says, and as of the end of the month total business at both restaurants combined was running at about 60 percent of normal. “What happened with us, business was coming back, then the riots hit and that was another down spiral, but now it seems everyone’s coming back,” Tarantino says. “People are still a little cautious. They ask questions like, ‘What are you doing to keep us safe?’”

At the Little Italy location, he says, “we have acrylic dividers, we sanitize the tables, the chairs, menus and the wine list, our servers all wear masks and gloves, and we do everything we can to keep people safe,” he says.

At the Foodery, Tarantino says, takeout remains in high demand. “We have a hot line,” he says. “People order food through an acrylic shield and get served from behind the counter. We have options every day: meatballs, sausage and peppers, shepherd’s pie, different pasta dishes, chicken marsala, chicken piccata, stuffed bell peppers, risotto — all these options, and I think what makes us different is you can get that homemade comfort food you’re not going to get anywhere else.”

Tarantino says he’s optimistic that business will return to normal one day, although he’s not sure how long that’s going to take. “I think it’s just a matter of when they get a vaccine,” he says.

But until then, he says, “we’re doing alright. People are just so grateful to get out and see that we’re following the guidelines — they’re grateful to get out of the house.”

The July 6 ban on indoor dining won’t have much of an impact on the Foodery, Tarantino says, given the continued strength of takeout and the fact that most of the seating is outdoors, along Market Street. At RoVino Rotisserie + Wine, he says, the restriction on indoor dining “is going to hurt us a little,” although the restaurant has a good-sized outdoor patio. “We’re going to ask people to limit their stay with us to one and a half hours per table, so we can accommodate all our customers,” he says, “and we’re going to require reservations.”

What the pandemic taught us

The sustained rise in takeout cited by several local restaurant operators is not restricted to San Diego. The Red Robin burger chain has 415 company-owned restaurants throughout the country — including three in the San Diego area: in National City, University Towne Center and Escondido.

On the company’s latest quarter earnings call, in June, CEO Paul Murphy told analysts, “Following the onset of the COVID-19 pandemic and the shutdown of dining rooms, we quickly pivoted to an off-premise driven operating model and are emboldened by the continued strong growth in off-premise sales since the onset of COVID-19.... Our weekly off-premise sales momentum... has improved sequentially since late March when comp sales were down over 70 percent for the week ended March 22. Thereafter, we experienced steady weekly improvement to almost triple pre-COVID-19 off-premise sales levels, and at the 270 locations with reopened dining rooms, we are still capturing meaningful off-premise sales…. More specifically, restaurants with open dining rooms are maintaining off-premise sales that are approximately 1.5 to 2 times pre-COVID-19 levels and 40 percent of sales mix. The increase in our average off-premise sales per restaurant has been achieved by focusing on a few key drivers of the experience: taste of food, ease of order placement from a new enhanced website, order accuracy, speed of service, order packaging, ease of pickup, and team member friendliness.... We believe we will sustain strong incremental off-premise sales even as our dining rooms reopen.”

Later, in response to a question from an analyst, Murphy said, “My view is that what the pandemic has done is it has taught people how to use off-premise. It’s teaching people how to effectively order, pay, [and] use delivery for, in a sense, almost a meal replacement.”