Interview provided by Marianne Schleicher, Hospitality Practice Leader
It is no secret that the Hospitality industry has been especially hard hit during the COVID-19 crisis. Hundreds of thousands of hotels, restaurants, and bars have completely closed their doors, and a very large percentage of them will never reopen. The effect is devastating to the economy and to the workforce. EPIC is a trusted advisor to hundreds of Hospitality clients across the country, and each day we hear stories of financial hardship and distress from these businesses.
However, we also hear stories of how our clients are reinventing themselves in these difficult times. One of these clever companies is Burger Lounge. Before the shutdown, Burger Lounge was operating 23 burger joints in California. Their business model is to use only the highest quality ingredients, including grass-fed beef, free-range turkey, organic produce, sustainably-sourced seafood, and the list goes on and on. They offer guests a menu of premium burgers, sandwiches, and salads, as well as gluten-free, vegan, and paleo options.
We were inspired by how they reinvented themselves, so we sat down (virtually) with Chief Financial Officer, Miguel Rossy-Donavan to discuss what they are doing differently during the shutdown, how they came about making the changes so quickly, and identifying opportunities that inform their post-COVID strategic plan.
Miguel explained that there was a reason Burger Lounge was ahead of the curve. The Burger Lounge executive team kept an eye on what was happening in China and Europe and collected data on what was happening to restaurants – especially in Italy. He believed it was very likely that businesses would be interrupted in a similar fashion in the United States. It became clear to Burger Lounge that they would need to create a new operating model, and do it quickly.
The shutdown came abruptly, but when it came, Burger Lounge was ready. Their first priority was, and has always been, employee and guest safety. They were proactive in focusing their Operations Services & Safety team to focus solely on enhancements to their already strong safety procedures in order to address the new risks posed by the pandemic. The second it hit, Burger Lounge sales decreased 45% – 50% over the same period from last year. Five days later, on-premise dining closed. Fortunately for Burger Lounge, they had already positioned themselves to take advantage of the uptick in takeout and delivery by implementing curbside delivery for touch-less service, installing Plexiglass to protect employees and guests, and restructuring their labor deployment to drive volumes up.
Miguel mentioned that Burger Lounge chose to think of the shutdown as an opportunity to reinvent itself. They see this as an opportunity to evolve the brand and position itself competitively in what the new-normal will be. New sales channels were added to the Burger Lounge website and the restaurants.
- Burger Lounge Essentials – a corner store where you can purchase seafood, grass-fed beef, dairy, lemonades, sauces, bread, fresh fruit and vegetables and more.
- The Lounge Box – now you can buy burgers, buns and all the fixings to cook for yourself at home.
While it is true that 7 stores are not currently operating, Miguel’s philosophy is that these locations are merely in hibernation, temporarily. They see a correlation between sales in restaurants based on the trade area they occupy. Restaurants in high residential areas do better than those in a commercial office area. However, because so many other restaurants in commercial office areas have closed, they have begun to see an increase in sales in those areas as well. Because of their quick thinking and inventive new products, their sales trend improved to being down 15% to 20% instead of the earlier decline of 45% to 50% versus prior year. In fact, two of the stores are doing more sales than last year, when on-premise was open, and those were already high-volume stores.
Miguel and the others on the leadership team have found a way to keep employees engaged even if they are temporarily out of work. They have a weekly newsletter to update all employees on what is being done to prepare for on-premise to resume, to keep employees and guests safe. They want all employees to feel connected to Burger Lounge even if some employees are not currently working. They want them to be excited to return to the workplace. Employee morale is up as they see what the leadership team has done to emerge in Burger Lounge 2.0. Miguel believes that it is easier to navigate the crisis together by keeping employees focused on the strategic opportunities Burger Lounge is working on to thrive after COVID-19, because they have something inspiring to return to and can hold their heads high.
It’s important to EPIC that we support our business partners during and after shelter- in-place and hope our readers will do the same. Currently, there are 5 stores open in the Los Angeles area, 7 stores open in the San Diego area, 2 stores open in Orange County, and 2 stores open in the Bay Area. We encourage you to order online during the shutdown and enjoy their curbside pickup for a tasty burger, fries, salad, shake, or their Lounge Box! Be sure to visit them again on the flip side of the shutdown for dine-in experience. To quote Miguel, “We’re here to do a common thing uncommonly well.” After your first visit, we know you’ll agree!
For more of our coronavirus coverage, visit epicbrokers.com/coronavirus
EPIC Hospitality Team
Successfully managing risk by identifying and controlling potential sources of loss is the most effective strategy to protect and grow your business and to reduce insurance costs. As your advocate and partner in this process, our experienced team of hospitality industry specialists will identify the risks you face and recommend strategies to minimize, mitigate or eliminate them.