It’s quite a gloomy place for South African restaurants at the moment – and that’s why we really enjoyed hearing about restaurateur Larry Hodes’ experience with changing his Voodoo Lily Café in Birdhaven into a grocery. Here, he chats about what’s gone into the pivot.
Why did you decide to open the Gourmet Grocer at Voodoo Lily?
I realised that restaurants would not be able to open for sit down business for quite a few months and we had a restaurant standing empty. My wife Annie and I were trying to conceptualise a grocer as we knew that it will still be a long time before restaurants got back to normal and at least with a grocer customers could buy foodie items from us as we could be classified as an essential supplier. Ahead of Mother’s Day, we went onto WhatsApp and Facebook, and asked if anyone was interested in selling premium, upmarket products from our store. 24 hours later we had a retail gourmet grocer. Most of the suppliers were small local suppliers who either sold to restaurants or at markets which they could not currently do, so it was a brilliant collaboration between us and small local suppliers.
How have you had to adapt to this new kind of operation?
I thought that long restaurant hours were behind me. However, since we opened the Gourmet Grocer both Annie and I have been working every single day, open to close. Even though I have been working all these hours, I have really enjoyed this new challenge. The retail model is very different though. In my restaurants I worked with gross profits of 60/70%, however in retail, gross profit can be as little as 15/20%.
Where do you source the items you sell?
All our products are sourced locally from local suppliers. Over 90% of our suppliers are small businesses and as part of our business model going forward we are committed to supporting small business. Even though it has only been a few weeks now, the word has spread and we have new suppliers approaching us almost daily. We are currently working on our business model as we would like to continue supporting small business. As of now, we are looking at an 80% local, small business and a maximum of 20% large business as suppliers to us.
Has it been successful?
Absolutely incredible. Every day our sales are growing. The community in the Birdhaven/Melrose area are very loyal to small local businesses like mine, so the response has been wonderful. Most of the locals will rather support us, the fruit and veg shop and the butchery before doing their shopping at the well-known supermarkets. We now have so many customers asking that we keep the Gourmet Grocer going forward, so we will be doing a hybrid of the Gourmet Grocer and a restaurant.
Are there any learnings that you can share about making the ‘pivot’?
There have been so many. First of all, you must have a positive mindset. I do not believe that what we have created here is unique – other restaurants could also have pivoted. Quite a few restaurateurs fell into a negative mindset and missed opportunities by only focusing on the negative. As Henry Ford said “If you believe you can, you can. If you believe you can’t, you can’t. The thing is you are always right”.
You must also be prepared to make many mistakes along the way. For example, with certain suppliers I thought we were doing well in terms of gross profits etc, only to find out that we were actually making a loss. However, the journey has been incredible.
In times of crisis, I believe the worst thing you can do is do nothing. I believe that even if you do not know where you are going, it is still worth going for it. I had a manager who thought I was doing the wrong thing by converting to a grocer. In the beginning I was not sure myself. But I was always of the opinion that I would rather try something and fail than regret later that I did not do anything. And now, look at where we are.
I was reading an article about restaurants in Forbes where people predicted a huge decrease in restaurants after various calamities, such as both world wars, the Spanish flu, Hurricane Katrina in New Orleans, the Great depression etc. But statistics have shown that restaurants come back much stronger than before.
I believe that post-Covid, there is going to be a huge demand for great, unique, fresh ingredients in terms of menus. In the eighties it was all about the product, then the nineties until now has been more about the customer experience, but I believe we are going to go back to it being all about the product and the customer experience. Yes, when the pandemic starts to decline people will look for comfort food and go back to certain restaurants, however eventually they will also look for great food, coupled with a great experience. So all restaurants are going to have to up their game. If you are sitting at home, there has never been a better time to work “ON” your restaurant – work on your systems and processes, your menu, your recipes and recipe costings. Work on your business, so you can become a lot more efficient. Start planning on how you are going to open your restaurant when the opportunity comes up.
It isn’t an easy road going forward, however those that have a positive mindset with an attitude that they are going to come out better I believe will definitely come out better on the other side.