CDC regulations reduce profits
In the ever-changing COVID landscape, with local and state regulations evolving daily, Duluth area restaurants are struggling to stay open and to adapt. With many people staying away from indoor dining, restauranteurs must be creative with their menus, staffing, use of space and a myriad of other issues to keep their doors open.
As Gov. Tim Walz mandated, restaurants were closed from March 17 until early June, and most had to lay off or furlough their entire staffs. For some restaurants, doing delivery, providing takeout and curbside pickup has brought in at least some positive cash flow. For others having more limited online, delivery and takeout options, staying open has been more of an uphill climb.
All agree that it has been a blessing that the weather has been so nice thus far this summer so restaurants with existing outdoor seating could use or even expand that space. Those with very limited or no outdoor seating and operating with the mandated 50 percent seating for inside dining are struggling with even slimmer profit margins.
Tony Bronson, director of business development for Grandma’s Restaurant and president of the Duluth Local Restaurant Association (DLRA) said, “I am proud of the ways that area restaurants have responded to the crisis. They have worked their hardest to keep their staffs and their guests safe. Many have gone above and beyond the local and state mandates to operate responsibly.”
He added, “We never know when the governor will click back on the dial again. And operating at 50 percent is not a sustainable business model. The Paycheck Protection Program has been a lifeline for some restaurants. But there are no additional long-term guarantees for that.”
He noted that finding employees has also become a problem at some restaurants, with employees worried about getting the virus and bringing it home to their families. Other employees have had to find new jobs in the interim and some, especially college students, have moved away.
“When the colder weather sets in, with fewer tourists, and if many of the locals are still hesitant to eat indoors, the back side of this could be that, sadly for many restaurants, their futures are in doubt,” Bronson said.
Grandma’s family of restaurants
Tony Boen, Grandma’s director of operations, has been with the company for more than 30 years, starting as a busboy. Grandma’s, he says, is like all restaurants dealing with the “new normal.” He noted that each restaurant owner has had to learn and adapt depending on their individual situations.
“We have a modified takeout menu with online ordering and Food Dudes delivery. That has been a revenue generator for us,” Boen explained. They also are offering curbside pickup.
“Since our reopening, things have gone better than anticipated,” he said. “We are fortunate with our location in Canal Park. We aren’t hitting our normal summer numbers, of course, but we have seen lots of people on day trips from the Twin Cities, enjoying our outside seating especially.”
Besides using their upstairs deck dining, they have closed their lot near the Marine Museum, expanding their outdoor seating. They no longer have any bar area inside the restaurant.
“That is just not practical with the rules and safety regulations in place,” Boen said.
They are being flexible with their hours, especially with closing times, depending on how busy they are. Grandma’s has also reduced some menu items, streamlining for now.
“The restaurant business is tough in the best of times. For the future, we are exploring some self-service indoor ordering options in the Canal Park Grandma’s. We are considering the idea of people taking a seat, placing an online order and receiving a text when the order is ready. Today’s diners are much more tech savvy, and we see people interested in ordering and making their payments on their phones,” Boen said. “With sit-down service, we may also have more tech at the tables. We will play it by ear.
“We all want to follow the rules. The last thing we want is another shutdown. We are all just trying to hang onto our slice of the pie,” Boen added.
Sandy Kolasinski, general manager at Little Angie’s for 16 years, said, “Grandma’s Marathon is normally the huge kickoff to our summer season. This year with no Grandma’s, we were hoping people would still come down to Canal Park.
“Thankfully, we have been very busy on our deck,” Kolasinski said. “We don’t have a parking lot, but the city has been very generous, allowing us to add tables to the brick sidewalk area. We have, of course, been observing six feet apart distancing, and not allowing more than six people to a table. And we do not allow people to move tables. That is hard for people who come in with large families or groups, and we have to tell them we can only break them into groups, and that they can’t table hop to visit.
”We also have been doing reservations for both outside and inside dining so we don’t have people waiting in line,” she added.
Indoors, Little Angie’s has 50 percent capacity with only every other booth used and tables moved strategically to maintain required distance. They have also cut down substantially on their bar area with chairs six feet apart.
Emily Walters, the service and beverage manager for Bellissio’s, says the great weather has meant that business has been pretty steady so far this summer.
“Even with Grandma’s Marathon cancelled, some people who had hotel reservations came up anyway.”
At BusinessNorth press time, however, Grandma’s announced that its Canal Park restaurant and Little Angie’s would temporarily close because three employees had tested positive for COVID-19. That decision highlights how fragile the business world remains while COVID continues to circulate unchecked by science.
Many restaurants have adapted their hours and some are even changing their days of operation. Pickwick’s Executive Chef Dustin Tomasetti noted that they are currently open from 11:30 a.m. to close Tuesday through Sunday and that they are closed on Mondays.
“We have had to look at how to balance the equation and our operating costs,” he noted.
“We tried to do takeout and that just didn’t work very well for us at first. That has been getting better. Surprisingly, at the restaurant, our best selling items have been the upper end ones. People are treating themselves since, for many, it has been a long time since they have been out to eat,” he said.
“We have been missing our business groups. People are working from home or are furloughed, and where before we might have groups of 10-12 business people during the week, that has gone way down,” he said.
Tomasetti explained they have patio seating in their parking lot. and with their large restaurant, with three separate dining rooms, they have been able to distance tables with no more than six people per table. They have other adaptations as well such as disposable paper menus and cutting back on some menu items.
According to Tomasetti, the supply chain has been another issue.
“Some products we have been unable to get. Every week it changes. Meats have been especially challenging – beef, pork and chicken. It is starting to rebound and get a little better.
“Before all of this hit, we were having a great start to 2020 with our best quarter ever,” Tomasetti explained. “Now we are just adapting as we go and learning something new every day about the best ways to proceed.”
Lincoln Park family
Tom Hanson and his family have been Lincoln Park mainstays with their Duluth Grill restaurant and their newer additions to the area restaurant scene – OMC and Corktown Deli.
Hanson noted, “Like everyone else, we have just been adapting to whatever has been coming our way in all the unchartered waters around us. After the initial shock of the closings and all the unanswered questions, we just have learned to tighten our belts and make things work as best we can.”
With a combination of online ordering, takeout, indoor and outdoor dining, they were able to plug along during the shutdown. Now their tourist trade has picked up.
While OMC has had outdoor seating, the Duluth Grill has not until now. They closed down part of their parking lot, added a covered tent and some outside tables. They have just ordered new picnic tables to accommodate their outdoor expansion.
With the three restaurants, they have staggered their opening and closing times to save money. They have also been creative in doing things like having some of their OMC menu of meats available at their Corktown Deli across the street.
“Our local hospitality business is such an important part of our economy,” Hanson noted. “We are all working together to keep it alive.”
“One big draw for people coming to Duluth,” Bronson added,” is the wide variety of good dining options. It is hard to imagine the kind of economic impact it would have if many area restaurants go out of business.”
“I have been inspired by our local restaurants and how hard they have worked to keep going. The staffs at all the restaurants have been so flexible in making things work,” Bronson said. “And we all appreciate not only our tourists, but also our locals who have been sticking with us, even if it is with takeout instead of at the restaurants.”