Money is not something most restaurant owners like to discuss, especially when the main goal at the moment is survival.
In mid-April, I first spoke with Brittanny Anderson, the James Beard Award-nominated chef and co-owner of Brenner Pass and Metzger Bar & Butchery, about the costs of operating the restaurants, specifically Brenner Pass, the Alpine-inspired venture in Scott’s Addition.
Four months later, the dining room at Brenner Pass remains closed for the safety of the staff, with its outdoor patio open for dinner. Although there have been a number of changes in that time — the lifting of indoor dining bans; the launch of a blue-crab delivery service, Sharktooth Seafood, with her uncle; checking employees' temperatures daily; two-hour limits for diners; and cocktails being sold to go — one thing has remained constant: fighting to keep her restaurants alive.
“At a place like Brenner, we break even at 100% capacity,” Anderson says of the restaurant she co-owns with Wine Director Nathan Conway, Beverage Director James Kohler, former Pastry Chef Olivia Wilson and Brad Hemp. “I need my sales to be, minimum, $40,000 a week — just to pretty much break even.”
Since the onset of the pandemic, Anderson says Brenner Pass is making anywhere from 15% to 25% of its pre-pandemic revenue. “We’re losing between $5,000 to $10,000 every week,” she says. “Right now, I would say that is probably pretty average at most places, depending on your rent.”
That statement is the gut-wrenching reality faced by restaurant owners, and it’s why many wonder whether their restaurants will ever return to normal. According to the Independent Restaurant Coalition, it is projected that 85% of independent restaurants could close due to COVID-19's effects on businesses.
While each restaurant has its own unique blueprint — size, location, concept — and Brenner Pass is a larger, 140-seat venture, the majority function with single-digit profit margins and have always done so. Since COVID-19, these barely-scraping-by margins reveal the fragility of an industry that relies almost entirely on having its dining rooms open and its bars occupied.
“Ideally, you’re hoping for margins of 7% to 10% profitability, which is a perfectly run restaurant,” Anderson says while going over profit and loss reports from Brenner Pass. “We don’t share this stuff a lot — everyone is often quiet when talking about profit margins.”
Staying True
Although many restaurants continue to offer strictly takeout, it doesn’t mean that quality has diminished. Handmade pasta, Seven Hills beef, local greens and charcuterie plates all grace Brenner’s to-go menu.
“Our burger is $16,” Anderson says. “I want to charge $18, even if I’m putting it in a to-go box. The to-go box isn’t coming back; I have to buy those repeatedly, and that gets factored into the price. If we want to be more equitable, our industry needs to charge more for food.”
At restaurants where the menu evolves with the seasons, or even weekly or daily, there is more room for food prices to fluctuate.
Restaurants with a consistent menu, or perhaps those that are part of a large group, can purchase bulk orders, which helps with maintaining more consistent costs.
Sourcing is another key factor in costs. Anderson notes that premium, locally sourced ingredients are more expensive.
“Are [diners] thinking about the Trainums [of Autumn Olive Farms] and their farm and the pigs they raise and all the money and time they spend?” she asks. "Are they thinking about Jo Pendergraph at Manakintowne [Specialty Growers]? That’s where their money is going. It’s a big chain, and I don’t think people think about their food like that.”
Everything Else
The cost of operating a restaurant doesn’t stop at food and labor.
“There are the other things people don’t really remember or think about,” says Anderson, as if sharing a secret when discussing overhead.
She is referring to rent, fees to participate in OpenTable’s online reservation platform, cleaning supplies, vendor surcharges, utilities, paper goods, as well as flowers, decor and linen rentals when the dining room reopens, which she envisions will not be anytime soon. Since the pandemic started, costs have expanded to include personal protective equipment (PPE), hand sanitizer dispensing stations and patio furniture.
Asked whether she thinks it’s important for diners to understand the cost of operating restaurants, even with an unknown fate, Anderson responds, “I do, especially those fixed costs. If I close [my dining room], I still have to pay rent.”
Operating costs related to labor and food may be down due to fewer staffers and customers, but even without diners inside, a restaurant remains an expensive business. Whether there are 10 people at Brenner Pass or 100, many expenses don’t cease.
A New Chapter
Since the pandemic, Brenner Pass has condensed its staff, relying on an all-hands-on-deck approach. Anderson believes this is a chance to ignite a systemic change in the restaurant community.
“I think you’ll see a lot of restaurants move into a more ‘everybody helps with everything’ model,” she says, noting that managers prep in the kitchen or expedite food to tables, while chefs hop in the dish pit and servers answer phones. “Those are the people that will be valuable in this new world, people [who] can do everything.”
Apart from salaried managers, Brenner Pass' back-of-house staff now make $15 an hour, while front-of-house staff make $5 an hour. Currently employees are given two weeks of paid sick leave to self-quarantine or get tested, if needed. The goal is to introduce a service charge that will be added to customers’ checks to support the new system — if a diner leaves an additional tip, it will be split among the nonsalaried bartenders and servers. Both Brenner and Metzger want to embrace this system moving forward.
“We believe this is the right direction the industry needs to be headed,” Anderson says. “We are lucky we got the kick in the pants to do what we did.”
To support these operational changes, Anderson says menu costs need to rise. Just as restaurants are adapting, guests will have to do so as well.
“The system is broken, and in order to fix it, the guest is going to have to take a hit here, and it’s not that they’ll be paying more, it’s that their tips won’t be a voluntary thing,” Anderson says. “It will be included in the price of the goods. We have to make changes, and some people will have to make sacrifices.”
"behind" - Google News
September 28, 2020 at 09:30PM
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Behind Brenner - Richmond magazine
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