Those of Wall Street week David Westin joining us as he does every day at this
time and David, we've gone to so many industries down here.
Finance a few others now look at the restaurant.
Yes. And you've got a pretty good guest.
Nice to get a sense of the economy from the ground level, what's really going on
there. And we're welcome.
We welcome now Danny Meyer. He is Union Square Hospitality Group
founder and executive Sharon Day. Thank you so much for being here.
Well, we've been with the restaurants in the New York area.
We think Danny Meyer. All of us really, in all honesty.
Give us a sense of what the pandemic did to your business and what's left over
from it. Well, we've got a near-term way to think
about that and a longer term way to think about that.
Near term, it brought our entire industry to its knees.
Think about it. Unlike 9/11, where I think restaurants,
especially in New York City, played a big role in bringing back the economy,
because we could be a place for people to come together with friends and family
and actually feel hope. We were not able to do that.
We were not allowed to welcome you into our restaurants for almost five months
after the pandemic started. So we were all scrambling to see how can
we stay in business? How do you stay in business in a
industry that already has really narrow margins when you can't have any revenue
whatsoever except, you know, a little bit of takeout and delivery, which not
many of us were really set up to do at that point.
So in our case, we went from about twenty four hundred employees in March
of 20 20 down to about 45 and glories by May.
And this is a business that had built itself on an employee first culture.
Really hard thing to reconcile. How do you how do you take care of
people by laying them off? And it was it was awful.
Now, what I can tell you is that we are now back all this time later to a point
where we've got about twenty eight hundred employees.
So we're significantly ahead of where we were when Covid started.
But probably more importantly than anything is who are those employees?
These are people, many of whom had not even been in the restaurant industry
before. I think that during the time we were
closed, let's not forget, we had the the national disgrace really of the murder
of George Floyd and our industry. I think did a very, very important job
of taking stock of where we were. We are a far more diverse industry in
terms of employment than we weren't going into Covid.
So that's a really good thing. The nature of business means you have
your finger on the pulse of New York and we all watch New York.
It certainly has come back some. How far back is it?
Come. What are you experiencing?
It's different today. It's come back beautifully in a lot of
ways, but it's different. So here's what's come back.
Broadway has come back. I think tourism is starting to come
back. International tourism is still lagging
just a little bit. Office density is the one thing that we
have yet to see. Come back in a big way.
Look, you can imagine that Mondays and Fridays, you have fewer people in the
office. They're working.
We believe we hope we're they're working remotely from somewhere else.
And so what that means is that the lunch business in restaurants is a little bit
off, but there's been sort of an unexpected dividend and that shows
itself in a lot of different ways. First of all, I have never in my entire
career seen our restaurants fill up with people earlier in the evening.
Mean, it is right now. You go to a restaurant like Manhattan
where this gentleman was married and you will see that bar fill up at 430 in the
afternoon. Let me fill up and then people will fill
our restaurants at five thirty or six. That used to be only if you were pre
theater or only if you were, you know, 70 years old or over did you want to eat
that early. And nowadays, that's what's going on.
So we're picking up a lot of what we lost at lunch.
One of the big things that also came out of the Pentagon and in addition to, of
course, getting people back, diners back in, there was also your input cost, the
cost of food, the costs of other things and even just the disruptions.
I remember talking to a lot of restaurant towards there was not just
that we're paying more, but if we want, you know, 10 cases of this bottle of
wine, we might only get five of them. So it makes you you have to be a little
bit more creative. And now you're playing out these menus.
Are you still dealing with that? We are to a degree.
What I can say is that the supply chain bottlenecks have largely loosened.
And what that did was a lot of times you couldn't fix the broken equipment.
Let's face it, restaurants are manufacturing plants.
We want you to think that we're just big showroom, the dining room, but the
kitchen takes a lot of wear and tear. And when you can't get something
replaced or fixed, like an ice machine or a dishwasher part or a stove or an
oven, it really slows things down. And the other thing that was really,
really slow for a good two years from 2020 onward was being able to rehire
talent. Now, I would say that if there is a
silver lining to the inflation cloud, it's that that has not only brought a
lot of people back to the workforce, because if you're a tipped employee,
your tip is a function of menu prices which have only gone up.
So you're making more money than ever. That's brought a lot of people back.
And I also think that it's it's it's really helped retention, which makes
restaurants even better. I'm curious about some of your
investments. Obviously, you have your own.
Runs under your own brand, your own company, but you've also been a pretty
prolific investor in other chefs and their ventures as well.
Yeah, we have a fund which is called Enlightened Hospitality Investments.
It's about eight years old right now. We've made twenty one investments and
our entire focus is on restaurants whose businesses some of some of our software,
some are not even restaurants. We invested in clear early on, some our
tech investments like Rosie was an early investment of ours.
Converse now as a more recent investment, which is an A.I.
ordering system for drive thru restaurants, Gold Belly, which is a
wonderful platform to have iconic foods from around the country delivered
overnight. Joe Coffee is one of our investments, so
we look for businesses that are employee first cultures that really believe that
when you take care of your stakeholders, your stake stakeholders take care of
your shareholders. Tell us about not go something you've
told us about about sustainability, which I find fascinating.
Sort of a ISE RTS at least machine learning.
Yeah, not CO is a food business which was founded in Schiller.
It's one of our investments and not CO is a business that found an algorithm.
They have a computer program called Giuseppe and it understands the
molecular structure of every fruit and vegetable and in which combination you
combine the right fruits and vegetables to create something that is not what you
thought it was. The reason it's called not co though, is
that, for example, their first product was not Manet's and then it was not
milk, not milk as widely distributed now throughout Whole Foods.
Shake Shack is actually just launching this week a non-dairy milkshake made
with not cow's chocolate milk. What do they make it out of?
They figured out the cabbage and pineapple juice and the right
combination makes milk taste good. Exactly.
So tell us about your empire. I'll call the park as it is an empire.
It's a collection. Where does it go next?
What's the next vista that you're trying to conquer?
Well, what we're trying to achieve, I wouldn't call it conquer.
And what I don't like about the word empire is it seems like we're trying to
gobble up territory. We're trying to create life enhancing
experiences for four human beings. And that's what we tried to do.
But I think we're incredibly excited right now for daily provisions.
It's in its early stages. There's only four right now.
They're all in Manhattan. We do have plans to open another one
soon across a certain river. And we're very, very excited about that.
It's an all day neighborhood café. I think you've even tried to.
I guess so. So far, our viewers aren't familiar with
it. This is more of a casual space.
So it's very, very what has now. You could eat there as well, but
definitely more of just show up with you.
Yeah, it's pretty much a 50, 50, 50 percent of the people dine and 50
percent of the people like that. I mean, you have a lot of high end
restaurants that I think would be much bigger profit generators.
What was that idea? I think one of the things that we have
learned is that that people don't want to park their taste.
So all the food is created by the same quality chefs that work in our, as you
would call it, high end restaurants. In our head of culinary is a woman named
Claudia Fleming, who is a James Beard award winning pastry chef.
And what we've learned is that people want the same quality of food.
They just sometimes want it more quickly and maybe a little bit less expensively
than sitting down in a full service restaurant.
So this is a way to do all those things. It works beautifully to have your food
picked up, delivered, eaten in the place.
It's a fun place. Morning, noon and night.
The roast chicken is second to none at nighttime.
And the crawlers? Well, I think you've already spoken for
the.