From the surging cost of food and supplies to the rising cost of wages, Northeast Florida restaurant owners are facing the task of keeping their businesses profitable.
In 2020, Florida voters approved an amendment to increase the state’s minimum wage $1 an hour each year until 2026, when it would reach $15.
On Oct. 1, the minimum wage for hourly workers increased to $13 an hour with tipped workers earning $9.98.
While restaurant owners have had years to prepare for the rising costs, what wasn’t predicted was the coronavirus pandemic shutdowns and the following inflation that in some cases doubled the wholesale prices of products.
A case of chicken wings flew from $80 to $140. A case of romaine lettuce went from $35 to $55. Prices have fallen, but not to pre-pandemic costs, owners report.
Fiscal calendars for many purveyors are from Oct. 1 to Sept. 30. Traditionally, food and beverage prices rise in October.
Longtime restaurateurs are working to adapt to the increasing cost of doing business. Here is what they are doing:
Bill Cissel, 65, has been working in restaurants most of his life. He has owned several in the Jacksonville Beach area. Currently he owns RP’s Fine Food & Drink at 1183 Beach Blvd. in Jacksonville Beach.
The menu is a mix of sports bar fare – wings, burgers and po’boys – and plated fish dinners and seafood.
Cissel has about 30 employees. As with most any full-service restaurant, bartenders and waitstaff make up more than 60% of his employees.
He calculates that this year’s minimum wage mandate will cost him an extra $15,600 in server payroll. That doesn’t count the kitchen workers, whose wages vary depending on position.
In a perfect world, Cissel’s margins would be between 12% and 15% each year.
But a restaurant demands constant maintenance.
“There’s the wear and tear on your equipment and physical plant. You have to rebuy furniture, refrigeration, cooking equipment, air conditioning, so you have to rebuild your restaurant incrementally every year,” he said.
“And then after about every five years, you have rebuilt the whole restaurant,” he said.
“We’re going to put a significant amount of money back into the physical plant, and we have to have that money to do that. We don’t want to be out of business. It would be like never putting new tires on your car or if you never change your oil.”
Cissel’s restaurants have all been full-service. That may have to change to the fast-casual model. That’s when customers order at a counter or kiosk, get a number and take their seats, gathering cutlery, napkins and soft drinks on their way. Runners then bring the food to the customer.
Cissel used this model briefly during coronavirus pandemic seating restrictions. He was able to cut back his serving staff to two or three instead of five or six a shift.
“The full-service industry is being affected negatively and will be shrinking. I think you’re going to see fewer and fewer full-service establishments going forward,” he said
“At some point, it doesn’t make any sense to have a full service and that’s what you’re seeing with all the fast-casual type establishments popping up.”
John Crispens, 55, is another owner who has worked in the restaurant industry most of his adult life.
Seven years ago he opened Crispy’s at 1735 N. Main St. in Springfield. Its menu features pizza, wings, sandwiches and salads, a wide variety of craft beer and a full liquor bar.
He has a good group of regulars who find their way in after work, he said.
However, with the cost of living, customers he would see three or four times a week have cut back to once or twice.
“The amount of people we have coming through our front doors is definitely not what we’d like. It’s not what we need to grow. Well, we’re basically in a maintain and survive situation,” he said.
Depending on experience, he starts most of his 30-member crew at the minimum wage. If workers stay on, they earn raises.
Crispens is a rarity in the restaurant world. He doesn’t rent the building. He owns it.
He has a mortgage on the Akra Bros. department store building, which was constructed in 1933. Several businesses had occupied the 5,900-square-foot space since Akra Bros. closed after 40 years there.
When Crispens bought the property, it had been a pawn shop and needed renovations.
Having his own property was part of the business plan from the start.
“Crispy’s never would have happened if I hadn’t been able to buy the building,” he said.
He was reluctant to build-out a rental property only to see what is now a fixed expense rise at the end of each lease.
Inevitably, renters can struggle to build a business and just as they are seeing some black ink, they can count on a rent increase, he said.
Owning in Springfield means having a different business model than if his restaurant was in the suburbs. The neighborhood economic demographic limits the frequency of dining out. He plans to increase prices when he introduces a new menu in the coming weeks. It may have to be pushed out quicker than he planned to meet costs.
However, his local customers can’t take too much of an increase.
“I built in Springfield because I wanted to help build up the neighborhood,” he said.
When Crispens opened seven years ago, he stayed open later. To cut payroll costs, he has cut back an hour each night.
Robert Newell, 48, is the director of operations at The Local. The breezy full-service restaurant has locations in Miramar and Neptune Beach and next year will open in Riverside and Ponte Vedra Beach.
The menu ranges from burgers and a beer to chef-inspired entrees with craft cocktails.
Newell’s family was in the restaurant business and he helped out as a youngster. He has been working in the industry for 36 years.
The rising minimum wage doesn’t affect his employees. The Local already pays more than $15 per hour. Wages average between $18 to $21 for non-tipped employees.
That allows the company the luxury of hiring experienced hospitality professionals with proven resumes, he said.
With confidence in his hires, Newell doesn’t micromanage his restaurants. Rather, the on-site managers run their departments. If a purveyor has a question, instead of coming to Newell, he directs them to the appropriate manager to make the decision.
“They’re the ones who decide what they’re getting from who and when. So it’s entirely up to them. Same thing with all the way down to number of staff they want to run on a day,” Newell said.
“I think that is one of the reasons that we’ve been able to find and retain staff is first by creating a great work environment, and second is pay them. And if you’re living in the world where you’re still hiring people at 15-16 bucks an hour, you’re always going to struggle.”
Chef and owner Richard Robinson, 40, has tightened his belt about as much as he can. He calls his fare semi-fine dining, where his customers expect quality food and attentive service.
Pink Salt & Wine Bar and Veveta Tapas are two restaurants in one at 1571 University Blvd. W. in Lakewood.
He has the Pink Salt dining menu and a Caribbean, French and Asian-influenced tapas menu. Customers can mix and match by ordering off both menus.
He closed the original Pink Salt in San Marco about a year ago.
He is hesitant to raise prices. He has a staff of seven. That’s as small as he can imagine without hurting service standards.
“We have to suck it up. We can’t cut our nose off to spite our face,” he said.
The restaurants are open Tuesday through Sunday, and Robinson will soon introduce brunch from noon to 4 p.m. Friday, Saturday and Sunday. It’s a revenue-generator.
“Brunch is almost the same as breakfast, except you have heavier stuff that you can order. At most places these days, brunch entails alcohol. Most breakfast places doesn’t serve alcohol.”
He thought of changing the menu to feature lower-priced ingredients, but a special Valentine’s menu showed him that is not the way to go.
“People are so upset that we didn’t have a regular menu. So I just leave it in place. I just leave it as is,” he said.
“You’re going to have that one person that comes in and says, ‘I was coming just for this. The last time I was here, two years ago, I really enjoyed the gumbo, and you don’t have it today?’”
Now, instead of overstocking his kitchen, he takes a dish off the menu for a night if he runs out of any its ingredients.
“If we have it, we do. If we don’t, we don’t.”
Rebecca Gonzalez, 41, owns and operates six 1928 Cuban Bistros in the area and has about 50 employees.
She has locations in Baymeadows, Ortega, Jacksonville Beach, Fernandina Beach, Fleming Island and Saint Johns.
“I don’t like to focus on the negative. For me it is not a problem, it is a challenge,” she told the Daily Record last year.
Speaking this week, she sees the increased minimum wage as a positive and as a challenge.
“There are long-term benefits because there is reduced turnover and that is good for the staff,” she said of increasing wages.
However, besides the minimum wage increase, the economy has seen incremental rising costs of goods over the same period. She acknowledges that higher menu prices are a reality customers will face.
“We have to adjust menu prices to accommodate wage increases and overall cost increases. So, it’s kind of hard, because where you’re winning in one aspect, where you know the staff is happy, but then you know your customers will feel the impact on their end for sure,” she said.
“If we have increases in food costs and increased wages, then that is the end of the road. It is going to have an effect on the customers as well or small businesses won’t survive.”
Part of the business plan is offering breakfast, lunch and dinner. Four locations are open daily from 8 a.m. and close some days at 4 p.m. and some at 6 p.m. The Jacksonville Beach and Saint Johns restaurants stay open until 8 p.m. on Friday and Saturday. She also sells beer and wine in Jacksonville Beach.
The full menu is offered throughout the day. Gonzalez said someone could dine for as little as $12 at 1928 Cuban Bistro.
“I guess that is the upside with our concept. 1928 caters, I feel, to all types of budgets,” she said.