Delaware’s Struggling Restaurants Cope Creatively with Shutdown, Plan for Uncertain Future

Seasons Pizza owner Angelo Halakos (left) and COO John Mazarakis 

It has been nearly six weeks since Delaware restaurants were forced with just hours’ notice to close their dining rooms and make sudden adjustments in compliance with COVID-19 restrictions.

Many adjusted to ramp up takeout and delivery services. Others have developed alternative models to bring in revenue while keeping as many employees on the payroll as possible.

Others have had to close.

The Seasons Pizza chain – with 29 restaurants and 1000 employees – was suddenly facing a financial doomsday. Chief Operating Officer John Mazarakis said examination of the spreadsheets had them contemplating a “worst-case scenario.”

 

In the early days of the restrictions, Seasons Pizza was uncertain whether it would remain an essential business and be allowed to continue operating at all.

“I mean, we were terrified… a lot of sleepless nights. It was a brutal transition,” Mazarakis said. “But slowly we adapted.”

Related: Devastated restaurant owners struggle to survive

In addition to losing all dine-in business, Seasons Pizza also estimates that its takeout and delivery business is down about 25 percent.

“So we had to be very prudent and very cautious. We tried to reduce our expenses across the board and reallocate labor in a fair and equitable way,” Mazarakis said.

Open only for take-out, delivery and curbside, Seasons Pizza has managed to retain 900 of their 1,000 employees during the COVID-19 pandemic

The executives have managed to keep 900 Seasons workers on the payroll – every server, cook, host, and bartender who wants to work has a job. Owner Angelo Halakos achieved this by rotating and cross-training many of their staff – and not paying themselves for the last two months.

About 10 percent of their workforce chose not to continue to work during the pandemic.

 

Takeout, delivery, and curbside pick-up only can only keep Seasons open for so long – Mazarakis says three to six months. “It’s not going to be enough, so we’ll see what happens,” he said.

Halakos says Seasons has been “trying to get back to normal – the new normal.”

He and Mazarakis share sentiments that could be echoed by virtually all Delaware restaurants that have chosen to remain open.

“We are going to great lengths to ensure that we have a very healthy crew, we take every precaution. And we also want our customers to know that it’s a good time to support a local restaurant, because we’re struggling, and we need the help,” said Mazarakis.

Mikimotos on Washington Street in Wilmington is offering sushi for takeout and curbside pickup

Delaware restaurants employ about 50,000 people – about one out of every ten people in the state’s workforce, according to Delaware Restaurant Association President and CEO Carrie Leishman.

The first two weeks of the dining room shutdown, restaurants that continued with carryout only lost an estimated $76 million in sales. Those losses have likely at least doubled by now.

Related: Your go-to list for local restaurants offering takeout and delivery

New data this week from the DRA indicates that about 90 percent of Delaware restaurants have laid off or furloughed employees. About 11,000 restaurant workers almost immediately had to file for unemployment.

There are also ripple effects.

 

“That employee who loses his job in a restaurant might not be able to pay his rent. That restaurant owner who shut down may not be able to pay his lease or mortgage. He certainly can’t pay his suppliers or the farmers,” Leishman said.

“Restaurants are the center of the crisis here in Delaware.”

Washington Street Ale House Head Chef Justin Vickers and General Manager Mike Schwamb

Big Fish Restaurant Group, one of Delaware’s major operators with 17 locations across the state, operates on the same razor-thin margins as all restaurants. Only four remain open for takeout, including three in Wilmington: Mikimoto’s, Washington Street Ale House and Bar Roja.

The restaurant group decided to consolidate their offerings, making the difficult decision to temporarily close local favorites like Trolley Square Oyster House, Torbert Street Social, and their flagship restaurant Big Fish Grill on Wilmington’s Riverfront. And there are many fewer employees on the job.

According to the Group’s Overseer of Operations Paul Debrigia, Mikimoto’s sushi offerings are going over “extremely well,” while Washington Street Ale House specializes in a two-tiered family-style menu that feeds four, either for $40 or $55.

 

Bar Roja is currently open for carry-out Thursdays through Saturdays and features taco specials and drink offerings. The company’s Big Fish Market in Rehoboth also remains open.

As for whether takeout only has been profitable, Debrigia said that’s still to be determined and difficult to measure. “Right now, we’re just trying to do the best we can to service the Wilmington area, keep our name out there and offer a great product at a great price,” he said. “Just because were doing some different things from the norm, you really can’t analyze it the same way you would do under normal operations.”

“These are incredibly challenging times that no one’s experienced before,” said Debrigia.

Stanley’s is a Wilmington institution – NBC10 beamed their NFL draft live shot from the empty parking lot of the north Wilmington restaurant

That crisis is deeply felt at Stanley’s Tavern on Foulk Road, which is celebrating its 85th anniversary. Steve Torpey has been its owner since 1982.

Currently, Stanley’s is closed after an attempt at staying open for takeout. Torpey said the tavern was not breaking even.

 

“It was costing me money every single day we were staying open for takeout,” Torpey said. “Although our loyal customers were coming in and trying to do whatever they could, we’re a big facility. The kitchen is big. Just to fire up what we’ve got, it just wasn’t profitable.”

Seventy-two employees in all are currently not working. According to Torpey, the decision to close was made to put Stanley’s in a healthy financial position when the time comes to reopen.

The bills, however, have not stopped coming. Stanley’s Tavern was closed last July for a month-long renovation. The kitchen was gutted, its equipment was replaced, and a new exhaust system was installed. The front of the restaurant also was overhauled with new furniture, flooring and walls.

The loan for that is still being paid off.

Stanley’s has applications for assistance pending, like many other restaurants across Delaware.

Torpey said terms of the forgiveness provision in the PPP program are challenging because it requires that 75 percent of workers be brought back within 60 days of reopening.

The state of emergency currently is expected to last until May 15th – at least.

Caffé Gelato now sells grocery items, like fresh meat, in addition to a full menu for takeout and delivery

Caffé Gelato on Main Street in Newark, meanwhile, has kept all of its workers employed – although not all of them are working at the restaurant.

The Caffé Gelato Market Place (www.marketplace.caffegelato.com) is open for business. It offers eggs, meats, cheeses, produce and baked goods at prices that may be less expensive than those found at grocery stores. Paper towels, toilet paper and Latex gloves are also available, and orders were being taken for an expected shipment of KN-95 disposable face masks.

 

“We felt, what better way to support the community and help everyone shelter in place than by saying we can deliver food to your door,” Caffé Gelato Owner Ryan German said. The Market Place has been filling between 20 and 50 orders a day.

German said the concept is getting food and products out of the wholesale distribution chain and into the hands of consumers – at sale prices while saving those consumers a trip to a crowded supermarket.

Caffé Gelato employees also paint houses. They stain decks. They power-wash. And, they mulch.

Caffé Gelato has kept some of its workers employed by redeploying them to home improvement jobs

The home services business has been passed along through German’s two brothers. On a given day, about 15 Caffé Gelato employees might be painting or power-washing a building. Approximately 25 might actually be at the restaurant.

This has enabled Caffé Gelato to continue paying 40 full-time employees and 20 part-time workers.

What would a reopening of restaurants even look like?

German envisions expanded use of Main Street sidewalks or parking areas for additional outdoor seating. Torpey said some social distancing component will likely be needed at the beginning, and perhaps for some time.

How long an edict such as operating at half-capacity would work within the confines of Stanley’s is still a big question mark.

“This is brand new for everybody,” Torpey added.

“We do whatever it takes – first of all to keep everybody feeling safe,” Seasons Pizza Owner Angelo Halakos said. “It’s going to take some time for customers to become confident enough to go out and visit restaurants.”

 

For the Big Fish Restaurant Group, Debrigia said employees are wearing face masks and gloves and sanitizing everything from trays to the pens that are used to sign credit card slips.

“We know that these types of things are going to be a necessity moving forward and eventually will be mandated,” Debrigia said. “We just decided that it’s in everyone’s best interests for ourselves and for our guests to just start that now.”

What might be the psychology of the restaurant guests – those who may insist dining out is the first thing they want to do when things “return to normal,” but might later be put off by the idea of gathering in public once again?

 

Debrigia said like everything else, that’s a big question.

“I think the customers are going to want to come out. That’s why we’re trying to do the best job we can to maintain food quality and offer a great product. Hopefully, that resonates within the customers and when they do come out hopefully, they’ll choose to patronize one of our restaurants.”

For about 20 percent of Delaware restaurants, there may be no reopening. The DRA forecasts that about one in five that have already closed may have closed for good.

If that happens, more will have been lost besides the restaurant, says Leishman.

“Restaurants are a part of every community. They add value,” she says. “Restaurants are the neighbors you want to have. When you don’t have a restaurant stabilizing a neighborhood, you don’t have community outreach. You don’t have a place to gather. You don’t have that community that everybody gets from being in their neighborhood restaurant.”


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About the Contributor

Mark Fowser

Mark Fowser

Mark Fowser is a veteran broadcast-journalist in Delaware and New Jersey. He has anchored and reported with WDEL, WHYY, Delaware1059, WILM and Delaware First Media (now Delaware Public Media). Mark lives in New Castle.