Lazy Dog Restaurants LLC got creative in the kitchen during the coronavirus pandemic, ultimately taking away some wins from a challenging situation.
While stay-at-home orders choked its mostly in-restaurant business, the Costa Mesa-based company’s focus on meal and essential kits with its Lazy Dog Pantry has helped stop the bleeding. The pantry offerings evolved over the course of the past two months to an expanded range that more recently included make-at-home Pop-Tarts and Mother’s Day packs.
The restaurant operator is likely to continue producing the food kits longer term even as the team focuses on a phased reopening of restaurants in states where restrictions are being lifted.
“There’s definitely a need for them and I don’t know how long it’s going to take to get back to normal,” said Lazy Dog co-founder and CEO Chris Simms.
“I definitely see people wanting to probably stay at home a little bit more than normal throughout the year, so I want to make sure we’ve got plenty of options for them when they decide to come to us for food.”
Simms’ quick work restructuring the focus, and operations, of OC’s 11th-largest restaurant chain earned him a nod in this week’s OC 50 listing of the area’s most prominent business executives, see page 52 for more.
Entertainment, Alongside Food
Lazy Dog, which had sales of $213.3 million across 36 restaurants last year, seized on the scarcity of basics, such as eggs and milk, at the start of the pandemic with its Pantry offering. But the team got more creative as time went on, with options such as the $25 nacho kit, $35 pizza night package and $45 brunch.
“We’re still, to this day, selling a ton of those [essentials kits] because people don’t necessarily want to go into the supermarkets. From there we expanded it,” Simms said.
“We said, ‘Well, people are going to be stuck at home, they’ll need some kind of entertainment.”
The kits also helped bring back more workers to the company. About 95% of Lazy Dog’s staff initially had to be furloughed when the lockdowns closed dining rooms and seized some 80% of the company’s in-restaurant sales.
“It obviously has been incredibly challenging,” Simms said of the past two months.
“We had to make some pretty nasty decisions and one of those was to furlough almost 95% of the people in our company. That was the worst day. Thankfully, we made the decision to stay open with takeout and delivery because we were able to keep a lot more people employed. At the same time, it’s really strengthened the relationships with everybody in the company because information is changing so quickly so we have to communicate on a daily basis with everybody in the company.”
Georgia, Texas Openings
Communication is critical with the company now reopening restaurants.
Lazy Dog reopened its doors in Atlanta, six more restaurants in Texas and Roseville. The policies for reopening have varied by state. In Georgia, restaurants are allowed 10 customers for every 500 square feet of dining room space, amounting to about 50% occupancy for Lazy Dog. In Texas, it was about 25% of the normal occupancy initially, which was expected to be bumped up to 50% late last week.
Simms applauded the local restaurant associations for keeping operators in the know on individual state reopening policies so they could ready their workforces for when doors opened.
“We could not be happier to get our dining rooms open,” he said. “We’ve been asking the states—governors and health departments—for a little bit of warning when they are going to open up the states because it takes time to train our people on the new way of doing things.
“Our kitchens have always been safe and sanitized, but when you look at the dining rooms, that’s where the social distancing occurs. That’s where servers have to wear masks and gloves.
“It takes time to get people together and walk them through that,” he said. “It’s not something you can rush into. You have to think it through and do it the right way so you can earn the confidence of your guests.”
Optimism Ahead
As for new restaurant openings, a door in Fairfax, Va., was originally scheduled to open the first week of April and is now set to debute in June. Another in Stafford, Texas is partially built with three other restaurants also previously slated for construction this year.
“I think we’ve got to understand what the new normal looks like before we can make those [opening] decisions right now,” Simms said. “We definitely want to grow.”
Whether that happens in the remainder of this year or future years is up in the air.
Simms, like many other executives, is cautious about forecasting. As dining rooms reopen, he’s guessing that’ll lead to a spike in sales getting to 50% to 60% of normal levels and growing from there.
“I’ll tell you, that is the million-dollar question right now,” he said of what the rest of the year looks like, “because nobody has any idea.”
“I am definitely an optimist of course. As the entrepreneur, you have to be an optimist. The big question is what happens with the coronavirus during the next winter? I don’t know that answer. I do believe we’ll get back up to prior sales volumes or somewhere near those by the end of the year, but it’s a really big question mark.”
