These Dallas restaurants have had record sales despite the pandemic. What is their secret ?
At first, the conversations seemed ridiculous. “Business is fantastic,” says Bob Sambol, the namesake of Bob’s Steak & Chop House on Lemmon Avenue in Dallas.
“We all have record sales,” he adds.
He talks about a group of successful steakhouses that include Nick & Sam’s and Al Biernat’s. Sambol says it saw higher-than-ever sales in 2021, making it the restaurant’s most profitable year in nearly three decades.
2022 could be just as strong, says Dallas restaurateur Al Biernat, who has been in the business for 50 years.
But how? Nearly 20% of Dallas-Fort Worth restaurants closed in the first year of the coronavirus pandemic, between March 2020 and March 2021, and thousands more have since closed or are struggling today. Fort Worth restaurateur Tim Love said The Dallas Morning News at the start of the crisis that restaurants could survive without money for a shocking three days, saying the pandemic had the opportunity to “destroy everything I’ve built”.
Slow sales, supply chain issues and the burden of pivoting to takeout have destroyed many North Texas restaurants. (But Love, Fort Worth’s most prolific restaurateur, didn’t experience the widespread restaurant closings he predicted.)
At first, successful restaurateurs didn’t want to talk publicly about their sales. Maybe they didn’t want to jinx it. Some had survivors’ guilt.
By the end of 2021, an anthem was brewing among a fraternity of restaurateurs, often in upscale North Texas neighborhoods serving wealthy customers: We have been at war. But we win.
“2020 has been a disaster”
The successes of Dallas-Fort Worth restaurateurs in 2021 cannot be considered without looking at 2020.
“2020 was a disaster,” says Sambol. “We lost money for the year, we dropped significantly in sales. I couldn’t sleep at night.
It’s been a devastating year — both for sales and profits — in almost every sector of the restaurant industry, not just in fine dining, says Emily Williams Knight, president of the Texas Restaurant Association. One exception was fast food and delivery services, many of which had already streamlined strong business models before the pandemic and were able to thrive, almost effortlessly, when the coronavirus forced customers to stay home.
“If you had drive-thru or sold portable food, you were killing it,” Knight says. “But that wasn’t a lot of our restaurants.”
The pizza, in particular, thrived.
For Zalat, which is Dallas-Fort Worth’s fastest-growing independent pizza brand, it was already poised to perform well as it was growing rapidly. Founder Khanh Nguyen and his team opened seven stores in 2021 and it was the most profitable year in the company’s seven-year history.
Sammy Mendell, owner of Greenville Avenue Pizza Company, says the start of 2021 — a time when restaurants typically see depressed numbers due to post-holiday health consciousness and cold weather — was “crazy,” in terms of sales. Customers wanted to eat at restaurants and were excited to order food again at their favorite places as the world headed into the first anniversary of COVID-19 in the United States, he says.
But Mendell says the hard work came at a cost. The pandemic has wreaked havoc on the mental health of restaurant workers through 2021 and 2022.
GAPCo began overloading its schedule to provide a cushion for workers who got sick, needed a mental health break, or quit their jobs. Mendell says he spent $4,000 a month in early 2021 recruiting new workers. The last half of the year was the toughest of his 14 years in the pizza business, as restaurant workers had endured more than a year and a half of uncertainty and stress.
Do higher sales mean higher profits?
Restaurant owners like Sambol, Biernat, Nguyen and Mendell saw big sales in 2021, but their expenses were also much higher, eating away at profits.
2021 hasn’t been GAPCo’s best year, profit-wise, its owner says.
Steakhouses like Sambol’s and Biernat’s did not suffer the same fate.
“High-end restaurants are so isolated from many of the problems faced by our fellow restaurateurs,” says Sambol. Biernat, which operates two steakhouses – on Oak Lawn Avenue and Spring Valley Road – says its profits have also increased.
“The volume covers everything,” he says.
Inflation rates have increased significantly in 2021, from 1.4% in January 2021 to 7% in December 2021, according to Statista. (It was up 9.1% in June 2022.) Almost all restaurant costs have increased. For example, Sambol raised wages so that cooks’ wages averaged about $25 an hour. He raised the prices of steaks. Laundry companies charged more to clean laundry. The forks were out of stock.
Some of these costs can be passed on to the consumer, and in some cases restaurants have seen sales decline from cash-strapped customers trying to save money.
But steakhouse customers didn’t seem to carry the same burden, say Sambol and Biernat.
“Our client is not price conscious, he is quality conscious,” says Sambol. “So if you want to raise your price, you’d better raise everything else with: quality of service, cleanliness, hospitality.
“Everything has to improve, so that your customer always thinks it’s worth it.” And it’s the gourmet restaurateur’s job to erase all those worries once a customer is seated.
Sambol had a strong enough 2021 to open a new Bob’s Steak and Chop House in McKinney in 2023.
It should be noted that Sambol is among several Dallas-Fort Worth restaurant owners who have accepted what he calls “crucial” PPP funds to bolster their businesses. In 2020 and 2021, the Small Business Administration had allocated nearly $800 billion in P3s nationwide. Restaurant companies received the largest PPP funding of any industry in 2021, at $41.5 billion.
While that money has given a boost to struggling restaurateurs like Sambol in 2020, experts interviewed by The news were still surprised to hear of their successes a year later.
So how did they do it?
It’s easy to say that customers returned to restaurants in droves in 2021 because they wanted to get out of their homes. Pent-up demand, a phrase we’ve read so many times since 2020, was real. But there is much more than that.
Customer loyalty goes a long way.
The talent of the chef and the waiter is important.
Privilege is a factor – both for established restaurants that make big money and for the affluent customers they serve.
Size and scale are also key: Dan Bejmuk, national restaurant consultant and member of the National Restaurant Association‘s Executive Marketing Steering Committee, says mid-to-large restaurants thrived because they had the necessary support. to get through an uncertain year. . They also had the manpower to look to the future.
“When you’re trying to operate and just stay afloat, looking for growth potential means walking away from exploitation,” Bejmuk says.
“Everybody trying. But when you have more resources, you can definitely be much better at it.
Geography matters, says Robin Gagnon, CEO and co-founder of We Sell Restaurants. She works with restaurants in 45 states and says without a doubt: National restaurateurs are looking to grow in Texas and Florida more than anywhere else.
And how about that other lucky charm? Opportunity. A select few restaurateurs were in the right place at the right time, and then had the resources to pounce.
Scott Christian, owner of the Hochatown Saloon near Broken Bow Lake, says the watering hole in his hometown was seeing sales of $2 million a year, before COVID. Now that restless Dallasites are flocking to this growing northeast Texas city, the Hochatown Saloon is poised to double its annual sales to nearly $4 million.
“I think people stopped going to Disney World and Mexico and started coming here,” Christian says. Maybe they rented a cabin, which felt safe during the pandemic. Maybe they will come back next year to spend more money. If that happens, Christian has just created a new destination during one of the most devastating financial crises of our lifetime.
Consultant Izzy Kharasch, president of Hospitality Works, guided the ups and downs of the saloon. “The most successful do not seek to overcome COVID,” Kharasch says.
They thrive on it.
Biernat is already optimistic about the sales figures for 2022. He hints at what’s to come: “It wasn’t just a one-year affair.”