Hedging bets on safety versus revenue, while knowing when to move on from traditional ways of operating.
By Luis Navarro as told to Chris Mohney
The lockdown was March 16, but there were already rumblings before that. Everyone was talking, “Yeah, they’re going to shut us down.” Nobody really knew. There was no roadmap for what we were going to see, what was in the forseeable future. So when the lockdown did happen, at least in the state of California, the governor went on his press conference and he laid out the guidelines. I immediately had to figure out how we were going to pivot.
The other part of my thought process was, “Do we just shut down?” We were weighing our options. What do we do? How is it going to be? Are we exposed? Are we susceptible to getting sick? Honestly, there was a whirlwind of emotions, a whirlwind of fear, a whirlwind of not knowing what our next step was. We couldn’t call anybody. We couldn’t look at anything. We just didn’t know.
I’ve been in the restaurant business about 20 years now. I’m one of the many that is not too keen to change. We’ve been using our POS system since we opened Lola’s, our Fourth Street location, which is our oldest store. The reality is that those systems have become antiquated. My wife Brenda runs our entire IT system. In about 2018, she was very, very insistent on updating all of our POS systems throughout the whole company. I pushed back, like “But we’re so used to the system.” Obviously, wives usually win.
We updated our systems to Toast. And with that upgrade, it brought all of the technology available at that time, integrating the delivery apps. That was when we started doing delivery. We didn’t know delivery was going to be so crucial now, but we couldn’t ignore the fact that the delivery game became a huge part of our business profile even back in 2019.
When the pandemic hit, we had to figure out what team sizes were adequate. We’d already been operating our takeout, and we had packaging and all that good stuff, but we didn’t know how customer behavior was going to change. That was a really, really interesting point, because the first three weeks of the lockdown were very quiet. People were hoarding, everybody was cooking from home, and nobody was leaving the house.
But at Lola’s, which has been the strongest of the three takeout concepts—that stayed steady. So we were able to identify how many employees we had to furlough, and who was staying on board. For example, the Social List didn’t lend itself well to takeout. It’s more of a hangout spot. People come in and do happy hour. We attempted it. We were open for about four weeks, but we were losing money. Ultimately, we had to make the decision to shut that place down for awhile. We were able to get it back open with the Open Streets initiative that the city of Long Beach is operating with the parklets and all the outside dining that they’ve offered.
Eventually, people started to get fatigued with constantly cooking at home. Americans are just not programmed to design our menus at home for every day. The next step was ordering pizza. Once people were tired of pizza, that’s when we were able to see an uptick of delivery orders. That’s when the alcohol sales just started to take off. Once lockdown dragged past the six-week mark, people just let go. They were like, screw it. We’re just going to drink.
Now the to-go alcohol is a really nice, stable business because you can place a takeout order and add a cocktail, which is awesome. I don’t think people are drowning themselves in alcohol at this point, but it’s still very steady.
Luckily, one of my things has always been outdoor dining. I love eating outdoors. If I have the opportunity to eat outside on the patio, that’s what I gravitate to. So when we built out our stores, all of them had an outdoor dining element. Some of them were more significant than others. But when we were allowed to open at 25 percent indoor occupancy—which lasted a week and a half—we specifically chose not to. That was for the protection of ourselves and the protection of our employees. We continued operating with just outdoor seating. Once the city announced they were going to offer the Open Streets program, and we were able to put seating out on the street and get that going, it was a shot of adrenaline for us.
What we’re hyper-focused on is the weather. Here in Long Beach, our winters aren’t that bad, but we do have an occasional rainy season. What are we going to do when it rains? How are we going to pivot if all of our seating is outdoors? That’s something that we’re trying to figure out right now. Do we tent? We’re not allowed to have walled tents. If it’s rainy, people aren’t going to want to sit with just a roof. It’s still going to be windy.
When we were working on the first Lola’s location, we started the buildout right at the beginning of the Great Recession. By the time we opened our doors in May of 2008, it was right in the thick of the housing crisis meltdown. But we were small enough to be able to morph and create what we needed to do. I remember we had a value menu with a $5 mini-taco plate. We realized that that kind of stuff worked.
For a small family-owned business, survival really depends on the dynamic. For us, it’s me and my wife. She was able to pivot us into the modern technological age. We’re young enough to understand that. But I have a lot of friends, people that we’ve traveled through Mexico with and gone on these culinary trips, who have been around for 50 years. They weren’t able to pivot as fast. I think a lot of it is because their management was older and almost stuck in their ways.
If you weren’t positioned to pivot into the takeout world, you were kind of screwed, because now you’re talking algorithms and you’re fighting for some visibility on the apps. And all those delivery platforms became inundated. You couldn’t even get a call back from any of these platforms for at least four weeks. So by the time they got back to you and set you up on their platform, you’re so far behind.
There are operators out there just chomping at the bit to get open indoors. They don’t give a crud. They just want to get open. In our mindset—and I think it’s because we are a family-owned business—we’re looking at it from a safety perspective first. That comes for our customers as well as our staff. The daunting part is that not just restaurants, but all businesses that have been operating during this time—we have to be the face mask police. Some people get mad when you ask them to wear a mask. We’ve had people threaten us and our teams.
I don’t know if even a vaccine is going to make us feel safe enough to open for indoor dining. We just don’t have enough information. But as of right now, we are not in any hurry to get our indoor dining back in action.