Operations Roundtable – Adapting in Today’s Economy
March 2009
By Dora Burke
Restaurant Forum recently sat down with some of Georgia’s top operators to gain a perspective on how to save money and maintain business in today’s economic climate. Guests included Kevin Burke, Chief Financial Officer for Concentrics Restaurants, Bret Eldridge, President of Planet Smoothie, Chef John Metz, Co-Founder of Marlow’s Tavern, Christian Favalli, Partner, La Grotta Ristorante, Caroline Harless, Principle of Flat Creek Lodge and Sia Moshk, Owner of Sia’s and Mitra restaurants. Thank you to Concentrics Restaurants for hosting this interview at Lobby at Twelve Restaurant.
RF: What are you doing to maintain or grow revenue within your current customer base?
Metz: Last year, we started a program to really target and focus our marketing and varied the messages to each restaurant’s customers. We worked hard on building our database and we are seeing that pay off.
Favalli: We are relying more on our database, too, for direct mail pieces and e-mail blasts. In order to see more frequency out of our existing Buckhead clientele, we are going on foot to residents and concierges to encourage diners to visit us. It has been interesting to see who takes advantage of the incentives we have put out there. We have seen a direct result from these efforts.
Harless: Because we are in rural Georgia (Swainsboro), we have had to be more creative to reach our 
constituents – we look at what we produce to get our brand out. We have to promote the uniqueness of our location and educate people on our restaurant, cheeses and berries. Our customers come mostly from the area in the “triangle” between Jacksonville, FL, to Charleston, SC, to Atlanta, GA. As people are staying closer to home and becoming more price sensitive, we have to look to build value through great service and entertainment.
Moshk: It is hard for us to discount at Sia’s because of our high quality, so we have focused on incentives and getting to know what really works for our customers. We have been doing hand-written cards with a 25% off gift card saying, “It would be good to see you again.” We have also gone deeper into building true relationships with our existing diners, little things like a free bottle of wine on their birthday or a thank-you note for a corporate group.
RF: Have you modified the way you handle marketing, promotions or advertising to increase the frequency of diners?
Burke: We are utilizing more Web-based marketing to be creative in our promotions and focus on value-based programs. At most of our restaurants, we offer three-course fixed-price menus and provide discounts early in the week.
Moshk: We have started asking our customers what they would like to see on the menu. We have been around a long time and people remember certain dishes through the years. We have started designing our menus based on true customer feedback. You think you know your customer, but you really need to ask them what they want and continue to get them involved.
Metz: We are customizing our messages based on the various personalities of each tavern. We are allowing our general managers to make more local store marketing decisions.
RF: What turnover have you seen?
Eldridge: There is a lot of talent out there today. We have found people are willing to drop back and hold
a variety of “roles” within our company. As manpower is our biggest cost, we look for multitalented people because our managers are doing more with less.
Metz: We have been able to upgrade our people. We opened a restaurant in December of 2008 and we were fully staffed with great people before Christmas. We were thrilled.
Favalli: I am in a different boat, as we have not had to hire service staff for the last 20 years. I think now is the time to restructure and change with some new blood to rejuvenate our group.
RF: How have you been able to manage expenses to cut cost?
Metz: We have seen a change with our vendors – they are now coming to us with solutions on how to save money or change plans to keep us as customers. We have also scaled down our menu to just a few key items with a few seasonal specials to save on labor and food cost.
Moshk: I have seen that, too – my vendors are coming together and talking and bring me solutions that are good for all of us. Their future is as important as our future.
Eldridge: We are going back to our landlord at our 84 Shane’s Rib Shack locations and 128 Planet Smoothies and renegotiating at each site. Most of the landlords are willing to work with us because they do not want to look for a new tenant.
Burke: Our biggest change in 2009 is the way we handle our beverage program. In the past, we have ordered from a variety of purveyors. Now, we have paired our wine buying down to six to eight vendors instead of 12 to 14 and consolidated our purchasing. We went to each of them and asked to build a win-win relationship where we would increase their business if they helped us increase ours. We still allow our chefs leeway to be creative, but we have more leverage dealing with just a few vendors.
RF: Some of you are expanding; what challenges have you gotten from financial providers to secure funding and how have you overcome them?
Eldridge: Our main lender has gone under, so we are now having to rebuild a new relationship with someone else. It is very difficult because no matter how good your credit is, the money is very tight.
Burke: Our biggest asset has been finding a banker that believes in not only the company, but [also] us personally. We have also been approached by landlords and developers that want us in their location and they are willing to fund the project and bypass the traditional banking institution altogether. Restaurants will drive traffic to their site.
RF: How have local, organic and sustainable products, equipment and food played into your business – customer perceptions, marketing and operations?
Harless: At Flat Creek sustainability is a way of life for us. We produce a variety of local berries and cheeses that we sell to chefs. Consumers are now more than ever interested in what they eat and where it comes from.
Burke: We have overcome some challenges to make “organic” work and not pass the cost to our customers, but we have seen better success with locally produced, seasonal items.
RF: What advice do you have for a new operator opening at this time?
Moshk: Do your homework. If you have not been in this industry before, go wash dishes before you start. There is nothing luxury about it.
Harless: This is the most difficult industry to be in. You have got to love people. It is not about the food, but the people. People forget about the food they eat, but they never forget how they are treated. Great service can make up for mediocre food.
Eldridge: Make sure you have at least six months of operating capital.
