Mom-and-pop restaurants becoming an ‘endangered species’
December 17th, 2012 Posted in Business‘When we first opened, some people would eat lunch here and then be back for dinner. Those are the people who kept us open.’ — Jack Carlisle
By Katie Swain
LOGAN – It’s early morning, still dark outside, and Mark Grodkowski arrives at Sweetly Divine to start the morning preparations before he opens his doors.
Kneading dough, Grodkowski starts the bread he makes fresh every day for his shop’s sandwiches. His morning employee arrives and starts making salads, while Grodkowski moves on to cooking the soup special of the day and then the myriad of pastries Sweetly Divine is known for.
At 10 a.m. Grodkowski opens his little shop and waits for customers to start trickling in, hopefully more than there were yesterday. He works long hours, staying sometimes until 6 or 7 at night before finally leaving the shop to his second employee and going home for the evening.
Grodkowski works like this six days a week, every week, serving just enough customers to keep open, just enough to stay at about a 3-4 percent profit margin, barely enough to stay afloat.
“If it weren’t for the jalapeno jellies I make and sell to stores like Lee’s, Macey’s and Gossner, I would already have had to close my doors,” Grodkowski said. “There just aren’t enough customers.”
According to city-data.com, Logan’s food scene is unique because it has a high ratio of restaurants per capita – 3.12 per 10,000. While this gives residents a near smorgasbord of restaurants to choose from, it makes small, local restaurants like Sweetly Divine have to compete unceasingly just to stay open.
“In Logan you have to fight for faces,” Grodkowski said. “I have to fight for every customer, and not just for customers in my own food category, for everyone. If someone goes to Wendy’s or Carl’s Jr., then they’re stuffed and they aren’t coming to me for food. Every time a new restaurant opens, I lose customers and sales go down.”
Grodkowski’s story very closely mimics that of Saboor Sahely, owner of the successful restaurant Angie’s. Though Angie’s has stood the test of time and become a local landmark, when Sahely opened in 1983 he worked more than 70 hours a week just to stay open.
“You have to be willing to work a lot hours,” Sahely said. “Working hard was the only thing I knew how to do. I was willing to do whatever it took to keep open. Failure wasn’t an option.”
One big problem small, local restaurants face is having their business taken from them by franchises. Establishments like Kneaders pose particular competition because they cater to the same demographic.
Gabe Anderson, owner of The Crepery, said he worries about losing customers to Kneaders but he has accepted the inherent fierce competition of restaurant business.
“Competition is part of being in business,” Anderson said. “If you’re going to open a restaurant, you just have to accept that. You’ll never be able to maintain a corner on the market. So I just try not to get too wrapped up in that and just provide the best product I can.”
Sahely said it isn’t just the competition for customers that makes him worry about all the franchises.
“Franchises have a huge advantage over little mom and pop restaurants,” Sahely said. “They have a corporate office there to take care of them and get them started. I did everything myself.”
The sheer cost of starting and then running a restaurant is another obstacle – Grodkowski’s 3-4 percent profit margin is actually not very unusual.
According to Forbes, a business owner can be set back $100,000 to $300,000 in startup costs to open a restaurant. “As for ongoing expenses, the cost of goods sold (food) will be the main course: 25 percent to 40 percent of revenues, depending on the restaurant concept. Payroll will gobble an additional 20 percent to 25 percent; rent should eat 8 percent. After marketing, payroll and taxes, if you end up clocking 5 percent profit margins, pat yourself on the back,” Maureen Farrell wrote in a Forbes article.
Sahely said he and his family lived off about $7,000-8,000 a year for several years before Angie’s took off.
“The restaurant business is a very fatal business,” Sahely said. “It’s very difficult to make it, and you practically have to kill yourself in the process.”
Jack Carlisle, owner of Jack’s Oven, said the only reason they were able to keep open is because of the stalwart group of regulars they incurred.
“When we first opened, some people would eat lunch here and then be back for dinner,” Carlisle said. “Those are the people who kept us open.”
Sahely said he has customers who eat at Angie’s three meals a day, six days a week. “I don’t think they know there are any other restaurants in town,” Sahely said.
Grodkowski and Anderson agreed that the loyalty of the customers and the love of the business is what keep them going.
But there aren’t enough customers to go around – too much food and not enough mouths. Despite the quality of food, comfortable service, friendly environment and the owners’ obvious love of the job; small, local restaurants are struggling.
“Mom and pop restaurants are the endangered species of the American economy,” Sahely said.
And Sahely said they can’t go on forever like this.
“For me, Angie’s is like that ride at the carnival that’s your very favorite,” Sahely said. “The ride is exciting and fun and it’s everything you ever wanted, but you know it’s going to stop. The carnival still goes on, but your ride stops. Angie’s is my ride, and I know damn well it has to stop sometime.”
Meanwhile, in Sweetly Divine, the lights go out, it’s the end of the day. Maybe there will be more customers tomorrow; maybe tomorrow things will be better. Because in the restaurant business, it’s a jungle, and Grodkowski is an endangered species.
NW
Tags: Angies, Jack's Oven, restaurant business, Sweetly Divine, The Crepery
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