Lexington restaurants on life support: ‘We’re down about 60-70 percent’
When Gov. Andy Beshear ended dining out across Kentucky on March 16 hundreds of Lexington restaurants pivoted to takeout. Overnight, they became “ghost restaurants,” with curbside pickup, scrambling to get onto delivery apps like Grubhub, DoorDash or UberEats.
But after a week of the new shutdown economy, some have already decided that they can’t continue and just shut down instead. And a few restaurants — Alfalfa, Edley’s Bar-B-Que, Old Chicago Pizza and Logan’s Roadhouse — may have closed for good.
And it isn’t only here. Chefs in New York wrote an op-ed in the New York Times saying that without federal help, more than 10 million Americans restaurant workers could lose their jobs.
Will takeout be enough to keep Lexington’s thriving restaurant scene going?
Maybe, but only on life support, some restaurant owners say.
BHG: ‘we’re a shell of of our former selves’
“We’re trying to make decisions that keep the most team members at work while minimizing negative cash flow,” said Brian McCarty, co-owner of Bluegrass Hospitality Group, which operates Malone’s, Drake’s and Harry’s. The were doing brisk carryout business at the Lansdowne locations last weekend.
But even with staff running orders out to cars in the parking lot, McCarty said, “we’re a shell of of our former selves.”
One goal of his restaurants and others is to keep income coming in for the staff. BHG set up a team member relief fund that is selling gift cards and pooling the proceeds for those in need.
Last weekend, Coach Cal tweeted that he and his wife were buying $5,000 of cards.
With the majority of his staff laid off at the moment, “it’s about keeping our doors open and the blood flowing,” McCarty said. “The entire industry is in a lot of pain right now.”
But he is optimistic that many restaurants will still be here when the coronavirus pandemic shutdown is over.
“This is a blip,” McCarty said. “We’ve been doing this for over 20 years, and we’re planning on doing it for over 20 more. And when we look back on this in four, five or six months we’ll have learned a lot of lessons. You can’t lose sight of the of the fact that this too shall pass.”
Saul Good, DV8 owner: ‘One great thing is the generosity of the tips’
Rob Perez, owner of the Saul Good restaurants and DV8 Kitchen, hopes that is true. He has consolidated his operations to one location near Fayette Mall and is keeping the lights on for now.
“I don’t want to give up yet. ... We do need more traffic. And I think it may come but I’m not positive,” he said. “One great thing is the generosity of the tips. People are so kind to our staff. It’s not just one person, it’s every person.”
He is concerned that many restaurants burned through cash reserves in the first two weeks after Kentucky’s first coronavirus case was announced on March 6. When conventions and basketball tournaments started canceling in early March, sales hit the skids. The first week after the case, he said, sales were down 40 percent. The next week after Beshear ordered dining closed down, his payroll exceeded sales.
“Now, not many landlords can give you a holiday, they don’t know. And same with loans, and any recurring expense,” he said. “It’s not their fault either, but it’s a tough conundrum. At least everyone is trying to find an answer, but it’s intense. It’s tough.”
He’s trying anything to get more business, from offering free baked goods with takeout orders to selling his bottled spirits at a bargain price.
“We are trying to be creative with the inventory that we have. We’re hoping more business comes in so we don’t have to contemplate how long we can go on,” he said. “We are cautiously optimistic the losses will turn around. We just need more. We just need more.”
Goodfellas ‘down about 60-70 percent’
Some restaurants, like pizza places, already had a built-in takeout or delivery model. Even for many of those, the current situation isn’t sustainable.
Alex Coats, co-owner of Goodfellas Pizzerias, said he’s grateful for the customers “who are showing up in real numbers to support our business. Unfortunately, it’s not going that good. We are upside down with our fixed expenses, after cost of goods and labor, we are bleeding weekly, big time.”
He said that even with all the support for takeout sales, “we’re down about 60-70 percent from what we normally operate at.”
He and his partner Eric Boggs plan to keep their five existing locations open as long as they can, in part to help the employees still working.
“Right now the sales are kinda helping that hemorrhaging,” he said. “We’re either going to lose a little being open, or a lot being closed. ... Our employees live day-to-day, our bartenders rely on cash. So our job is to provide a paycheck.”
He has encouraged all his workers who have lost hours to apply for unemployment in Kentucky and elsewhere.
“If this thing’s three months, I don’t know if we can make it three months. We won’t have enough money to make it,” Coats said. “A small biz operator who just has one store, I don’t know how they can make it. We’re just taking it day by day, not trying to speculate on two weeks from now.”
Alfalfa says goodbye and ‘good luck’
Some restaurants have indicated that they may never make it back.
Alfalfa, a local favorite for almost 50 years, shut down on March 8. Owner Amy Messer said in an email after the closure that she is looking for a buyer.
“We are aware the virus is awful and affecting everyone but we felt Alfalfa was particularly fragile because we’re so dependent on downtown business, courthouse business, and tourists. The time from March 1st until the end of Keeneland is our busiest time of year and we are now expecting that to be totally wiped out,” she said.
And on Monday the restaurant posted a note on Facebook making it official: “After much consideration we’ve decide that we will not be able to re-open Alfalfa once it is safe to do so. We appreciate everyone’s help and support over the past two years. If anyone is interested in carrying on the legacy of Alfalfa and would like to discuss taking over the restaurant message us here or send an email to alfalfalexington@gmail.com Good luck to everyone on getting through these difficult times.”
Chains restaurants struggle
Chains are hurting too. Edley’s Bar-B-Que has closed the Lexington location at the Summit At Fritz Farm, the only one not doing takeout.
The parent company of Logan’s Roadhouse and Old Chicago Pizza & Taproom entered bankruptcy earlier this month. Now the coronavirus shutdown has thrown its financing into turmoil and the company has closed all 261 restaurants for now, including three in Lexington.
And Starbucks has closed its cafes in the U.S. for two weeks, only having locations with drive-thrus open.
Doodles closed amid uncertainty
That’s the situation that Doodles owner Melissa Jackson found herself in. She decided after last Saturday’s brunch to close down for the duration.
She had been doing breakfast from 8 a.m. to 11 a.m. was “we were doing plenty of business,” she said. But it was time re-order perishables like eggs and the uncertainty of when restrictions might be lifted or, in a worst case scenario, made even tighter, made it impossible to move forward, she said.
“For me it came down to ordering more supplies and not knowing if there was going to be a shelter-at-home order. My goal was to have the least amount of loss possible ... Up until Saturday I was selling what I had left, then we pared back, sold through all of my perishables.”
She also was concerned that even with limited staff and curbside takeout she couldn’t be 100 percent certain she wasn’t putting herself or others at risk.
“The risk-reward balance was just too much for me to continue doing takeout,” she said. “Hopefully this will all be open soon.”
She plans to go back to mowing lawns and landscaping to avoid going on unemployment and wait out the shutdown.
She said Doodles is very lucky. She has no debt and her landlord is willing to work with her on the rent.
But she doesn’t know how long Lexington’s restaurants can hold out.
“I don’t know what this looks like as time goes on,” she said.
She worries about all the local growers and producers she buys from, too.
“All of our farmers and purveyors are in the same boat,” she said. “In a good month we go through 9,500 eggs from several different farms. ... all of our bread is from Bluegrass Baking Company … that’s something I think about, too. All the small farms I work with.”
This story was originally published March 25, 2020 at 6:00 AM.
