Closing Fio’s Cucina Italiana for lunch wasn’t an easy decision, recalled Jack Berkman, co-owner of the Gaslamp Quarter restaurant.
The upscale Fio’s, one of the first in the Gaslamp, will be open 10 years next month. It enjoyed a healthy noontime business until about 18 months ago, Berkman said. The bottom-line decision: Customer volume didn’t support labor and preparation expenses.
At the same time, nearby quick-service eateries, such as Rubio’s Baja Grill and the Cheese Shop, a deli that offers delivery service, have found lunch business stronger than ever.
The contrast between the Gaslamp restaurants reflect the difficulty that many in the Downtown district have had making lunchtime profitable.
It also illustrates many trends recently reported by the National Restaurant Association. The organization’s new study reveals consumers are turning to takeout, easy-to-eat and often hand-held lunches.
According to the Washington, D.C.-based group, these types of meals allow consumers to fit more into their day. The study indicates that 27.3 percent of full-time employees often spend their lunch breaks shopping, exercising, running errands or working.
Stephen Zolezzi, executive vice president of the local Food & Beverage Association, said that the trend is true across the county.
‘Happening All Over’
“It’s happening all over,” Zolezzi said. He said major clusters of restaurants in San Diego are in Downtown, La Jolla and Mission Valley, which includes Old Town.
“People’s lifestyles have changed and what they’re looking for at that time of the day has changed,” he said. “Those places that can accommodate that are still busy, and other places that can’t are not.”
The two-hour, martini-swilling business lunch of the past has definitely evolved, Zolezzi said.
It could be attributed to technology’s impact on the various industries, that more business is being conducted via E-mail, fax and telephone, he said. “It’s being done in other ways than in person-to-person conversations over a meal.”
Another reason for fewer sit-down business lunches is they are now 50 percent tax-deductible rather than 100 percent, he said.
Zolezzi agreed with the Restaurant Association’s findings about lifestyle changes impacting lunch. Other alternatives to restaurants or buying out at all is bringing lunch from home, or simply eating a large breakfast and exercising at lunch, he said.
To bring more people to the Gaslamp Quarter for lunch by sidestepping driving and parking concerns, the Gaslamp Quarter Association and several underwriters set up a $15,000 six-week pilot shuttle program this July.
Pilot Program Dropped
It was successful but there wasn’t enough funding to support it further, said Teresa McTighe, executive director of the association. She hopes to get it started again.
McTighe also hopes that retail development and new hotels will spur the area’s daytime business.
Consumer attitudes toward full-service restaurants vs. quick-service could change with the economy, said restaurateur David Cohn.
Cohn operates Dakota Grill & Spirits in the Gaslamp Quarter, which is open for lunch and enjoying a healthy midday business.
He attributes Dakota’s success to a private dining room available for the business lunch meetings that still take place and the restaurant’s proximity to Downtown’s financial.
A couple of blocks south on the same street, another of Cohn’s restaurants, Blue Point Coastal Cuisine, is closed for lunch.
With operating costs, labor, and escalating rent, keeping a restaurant open for lunch is tough, Cohn said.
As with Dakota’s, location colors a restaurant’s profitability, he said.
Cohn also operates the Hang Ten Brewery, close to the south end of Fifth Avenue. Because the brewery is further away from the financial district and closer to the Convention Center, its lunch business fluctuates with the meetings and trade shows held at the center.
The Cohn Restaurant Group often looks at the brewery’s books and questions whether lunchtime is profitable.
‘Kind of Marginal’
“It’s kind of a push, kind of marginal as to whether we should be open, but we do have a regular following down there,” Cohn said. “Of course, when the conventions are down there, it’s great for lunch.”
About half the time, lunch business is busy, Cohn estimated. “But, when we’re there 100 percent of the time, 50 percent can make it more difficult,” he said.
It’s tough to predict whether a lunch will be bustling or slow, so staffing is complicated, he said. Understaffing could lead to poor service and risk a restaurant’s reputation.
Overstaffing can be expensive, particularly in California and other states where food servers are paid full minimum wage rather than reduced pay, which takes into account that the servers will earn tips, Cohn said. The laws mean San Diego restaurateurs take more of a gamble when they open for lunch, he said.
A different kind of risk paid off for the Cheese Shop, which has been in the Gaslamp for 13 years. According to partner Tom Schutz, when the deli first opened, it launched a one-driver delivery service.
Delivery Service
Now, there are four drivers, and the deli’s delivery service outweighs its takeout business by 60-65 percent, Schutz said. As it turned out, the deli had jumped on the trend of convenience, he said.
The same is true for the Downtown location for Rubio’s Baja Grill. Lunch business is busier than ever, said CEO Ralph Rubio.
The fish tacos and other items are convenient, as is the 10-minute span from getting in line and being handed an order, Rubio said.
The Gaslamp location was more luck than planning, he noted.
“We weren’t as sophisticated then as we are now about site locations, but yes, we did want to service Downtown and wanted to be near Horton Plaza,” he said.
It’s not the best time to be operating a full-service restaurant in the Gaslamp, Rubio said. “It’s just too overbuilt,” he said. “There’s just too many great choices. Unfortunately, a lot of very good restaurants with great menus and great food just can’t make it there.
“The main reason, to a great extent, is that it’s just too competitive.”
Ingredients for food service success haven’t changed, Zolezzi said. “You get back to the same parameters , where you’re located, what kind of product you sell, what are the price points, and what the people want.”
