Beating The Odds

Delaware’s hospitality groups are still on the move

Eric Sugrue, the managing partner of Big Fish Restaurant Group, is not one to miss an opportunity. When Joe’s Crab Shack closed in 2020 after 17 years on the Wilmington Riverfront, the company filled the gap with Taco Grande Mexigrill + Tequila Bar. And that’s not all. In the past year, the company replaced Harvest House in Wilmington with a Rosenfeld’s Delicatessen and opened a combined Big Fish Market and Rosenfeld’s Delicatessen in the former McCabe Gourmet Market in South Bethany Beach.

The restaurant group is in good company. Many multiunit operators have expanded during the pandemic. However, it’s hardly business as usual.

The Expansion Advantage

Why expand when the going gets tough? “We need multiple locations to support a strong management team,” explains Lee Mikles, who with Jim O’Donoghue own OMG Hospitality.

They planned on multiple eateries from the day they opened Grain Craft Bar + Kitchen in Newark in 2015. Today, there are four locations, including Grain on the Rocks in Lewes, which opened in June 2020. Thus far, OMG Hospitality’s approach is working. The human resources director is a former host, and a leading general manager entered the company as a server.

Guests enjoy riverfront dining at Grain on the Rocks. Photo by Matt Urban

To be sure, staff appreciate knowing there is room to grow, Sugrue says. That’s important at a time when restaurants face severe labor shortages. During Big Fish job interviews, prospective managers often cite the opportunity for advancement as the reason they applied, he says. (The hospitality company has 18 Delaware restaurants.)

Having multiple units lets a restaurant group relocate people as needed. When dining rooms were closed or had limited capacity, Forty Acres Hospitality moved people around to “keep them employed,” says Dan Sheridan, who with Rob Snowberger owns Locale BBQ Post and Stitch House Brewery. This summer, several Grain bartenders and servers moved to the busy Lewes restaurant.

Owning multiple restaurants gives companies more purchasing power.

“The food pricing structure will adjust … majorly once as a group you can purchase more annually,” notes Michael Stiglitz, who owns six Two Stones Pub locations. “Contracting early in the year for something like crab meat for the summer is very important because if you’re in the middle of summer and there’s a shortage, the price could double.”

Granted, the groups often need to narrow their purveyor list to reap rewards. And having more restaurants means more financial clout.

“We have a good relationship with our bank, and they are invested in us,” says Scott Kammerer, president of SoDel Concepts, which has 12 restaurants and plans to open Matt’s Fish Camp in Fenwick Island in fall. “That was very helpful to us in the early days of the shutdown” in spring 2020.

The Right Place, Right Time

SoDel Concepts slipped into Fenwick Island after Ropewalk Signature waved goodbye. The Matt’s Fish Camp will be the third iteration in SoDel Concepts’ portfolio. Opening the same concept is a smart move when you need to move fast.

“There is already a template for the business,” Kammerer says. “There are already design and menu ideas. It’s also much easier to make projections and cost, which is a huge advantage.” But launching a new idea lets chefs and managers tap their creativity, he added.

Inside Hakuna Hospitality’s Santa Fe on Pennsylvania Avenue in Wilmington.

Sugrue, who has various concepts, had been planning to open Taco Grande on the Wilmington Riverfront for years. When the stars did not align, he considered tabling the idea. Then Joe’s Crab Shack closed. Now he hopes to open more Taco Grande locations.

For Sheridan and Snowberger, the closing of Scrumptious in January 2021 offered a lifeline. Locale BBQ Post’s Little Italy store only had six seats and two picnic benches. The bulk of the business was catering, which dried up during the pandemic. Moving to Trolley Square was a no-brainer regardless of the circumstances.

“The pandemic just overloaded the pros on why we should move quickly while the opportunity was there,” Sheridan says. “We could no longer wait for the catering business to come back. We needed to get into a space that would give us more foot traffic.”

Pumping the Brakes

The pandemic has also slowed projects. Scott Stein and Antimo DiMeo, who own Bardea Food & Drink in downtown Wilmington, were ready to greenlight Bardea Steak in early 2020. Come March, they opted to keep their existing business afloat rather than take the plunge. The downtown steakhouse, located next door, is back in motion with a planned 2022 opening.

Xavier Teixido’s plans for a second Kid Shelleen’s Charcoal House & Saloon went into a holding pattern for several reasons. He waited while Branmar Plaza’s owner played musical chairs with some businesses. Walgreen’s, Branmar Liquors and Action Hardware all moved.

“The landlord is preparing to turn over the former hardware store space shortly, and we hope to begin construction this fall for a late spring opening,” Teixido says.

A rendering of SoDel Concept’s two-story Matt’s Fish Camp.

Well, maybe. “As you can imagine, schedules are really up in the air with material and equipment delays,” Teixido adds. “So, while we are committed to starting fit-out, we will be on a wait-and-see as the supply chain recovers.”

Javier Acuna of Hakuna Hospitality Group can relate. The pandemic hit a month into the construction on Sante Fe Mexican Grill in the new 2000 Pennsylvania Avenue building. It wasn’t the concept’s first Wilmington location. Santa Fe was previously in the Galleria Shoppes, which was torn down in 2017 to make way for the six-story luxury project.

Construction on the imposing building took so long that at one point, Acuna decided not to return.

“After really thinking about it, we decided [moving forward with the project] was good for the business,” he says.

It was no easy feat. In spring 2020, cautious workers put off coming to the job, and there were equipment delays. But when the economy slowly opened, many contractors were eager to find work. “It balanced out in the end,” he says.

Grain on the Rocks encountered a faltering supply chain when factories closed in March 2020. The accordion windows so critical to the opening were not available.

“Even simple things took forever,” Mikles says.

Unfortunately, the supply chain is still sputtering.

Lessons Learned

For restaurant groups on the fast track, the past year has been enlightening. Grain on the Rocks and Grain H2O at the Summit North Marina were “saved” due to alfresco options, Mikles says. “I don’t think we’ll ever open another location that doesn’t have outdoor dining.”

Locale’s new Trolley Square location has a generously sized courtyard, and Bardea Steak will have a four-season section and open-air features, such as a fireplace.

SoDel Concepts had planned to renovate the restaurants’ outdoor areas over several years. Thanks to the pandemic, those projects got a boost. “It needed to be done immediately,” Kammerer says.

Indoor space is as important as outdoor. Bardea Steak will occupy 5,000 square feet; Taco Grande is in a 9,000-square-foot property. The new two-story Matt’s Fish Camp is much larger than its two siblings. Social distancing, if needed, won’t be a problem.

Takeout, meanwhile, is no longer an afterthought.

“Little details matter,” says O’Donoghue of OMG Hospitality. “I don’t think I’ve ever looked at so many to-go containers in my life.”

The uptick in takeout business also prompted menu changes; food had to travel well. As a result, Grain restaurants nixed brunch to go. “Eggs get cold too quickly,” he notes.

The rising carry-out business has underscored the need for online ordering platforms. “It was invaluable to our company over the last 18 months, and, as it turns out, the guests want to keep it,” Kammerer says.

Multiple units also need a cohesive point-of-sale system that helps operators make data-driven decisions, O’Donoghue says. Managers with a penchant for dark beer might sober up if they spot poor sales. Such information is invaluable when owners are not on site. “You have to trust people but give them the right tools,” Mikles says.

Facing the Future

Meanwhile, OMG’s partners plan to open a worker-friendly concept on the University of Delaware’s Science, Technology and Advanced Research Campus. Hakuna Hospitality Group, which has six businesses, is not done exploring Central and South America for inspiration, says Acuna, who moved Pachamama Rotisserie Chicken from Newark to the Riverfront Market in Wilmington. A second Del Pez is in the works, although he declined to give the location.

Big Fish plans a steakhouse on the riverfront and is building the Kennett Square Oyster House on Route 1. Next year, expect to see Big Fish Market and Rosenfeld’s Delicatessen in Goat Kitchen’s former home in North Wilmington. And at the beach, SoDel Concepts has started construction on Ocean View Brewing Company.

Expect to see more of the same — a second Kid’s, hopefully — and despite the extra work, new concepts. As Sheridan puts it: “Keeps us from getting bored, I suppose.”

So, what do you think? Please comment below.