What Does It Take for a New York City Restaurant to Survive?

At the end of the day, the restaurant business is just that—business. Illustration credit: Gabrielle Muller.

“Will outside dollars force Brooklyn’s most anarchic restaurant to lose its soul?” read the subhead of an Eater story last May. News quickly spread: Beloved Bushwick pizzeria Roberta’s was selling a significant percentage of its company to Chorus Hospitality, a corporate group run by billionaire Michael Tisch. Chorus Hospitality describes itself as a “service-focused management partner” that helps its acquisitions “bring original culinary concepts to market,” while Roberta’s has long been hailed as a pie-slinging temple of free-spirited quirk and anti-establishment realness.

The irony was not lost on fans, who immediately feared the worst. As one tweeted: “Must hit Roberta’s one last time before it’s ruint.”

Details of what such a partnership will mean for Roberta’s have been slow to emerge, however, and, not surprisingly, none of the naysayers have offered alternative solutions for how the restaurant should deal with the rife financial and legal problems it’s reportedly suffered of late. Roberta’s did not respond to interview requests for this story, but co-owner Carlo Mirarchi has described the decision to “sell out” as a pragmatic one, telling Eater, “Ultimately, the people here who are creative are going to have the financial backing to really do the things they want to do.”

Financial backing: It’s not something patrons often consider when tucking into a dish that seems more akin to a work of art than a work of business. But no matter how transcendental a restaurant’s food or anarchistic its ambience, money-making is always a goal and necessity. “At the end of the day, the restaurant business is just that—business,” says Ravinder Kingra, a lecturer in food and beverage management at Cornell University. “You’re always concerned with food and labor costs, and with the $15 minimum wage coming up soon, I think it’s going to become even more difficult for restaurants to stick around for a long time.”

This is especially true in New York where space is the costliest in the country, competition is constant and dining trends fickle. Even beloved establishments are not immune to things like rent hikes (Union Square Café), land sales (WD-50) and changing tastes (Lutèce). Just last month Carnegie Delicatessen announced it would be closing after a 79-year run, a decision that came on the heels of a spate of personal and business trouble for owner Marian Harper Levine. “I’m very sad to close the Carnegie Deli, but I’ve reached the time in my life when I need to take a step back,” she told the New York Post.  

Yet, somehow, others weather such challenges for decades, or even a century. How do they do it?

Many of New York’s most celebrated culinary landmarks say it starts with an obsession with quality. “You can have the greatest gimmick in the world or the most charming place—the food could Instagram so well—but if the product itself is not of great quality and the best you can put out there, then why the hell would anyone ever come back?” says Jake Dell, owner of Katz’s Delicatessen. “As my grandfather always said, as long as you do the food the right way, hopefully people will recognize that.”   

Many of New York’s most celebrated culinary landmarks say it starts with an obsession with quality. Illustration credit: Gabrielle Muller.

Others agree. Every week, David Berson, vice president of Peter Luger and great-grandson of the famed steak house’s founders, personally goes to the market along with several family members to pick out each piece of meat that comes into their restaurant. Consistency in quality also extends to consistency in experience: The menu and space have remained about the same over the course of 60 years, centering around the simple goodness of a perfectly cooked, excellent piece of steak. “We don’t embrace all these new food trends that are popping up left and right,” Berson says. “We have a really good grasp on what we do, and I think we excel at it.”  

Adds Kingra: “Peter Luger figured out their recipe, literally and figuratively, and stuck with it.”  

In other cases, though, the ability to adapt to changing times is precisely what’s needed. In 1907, the Palm Court within the Plaza Hotel became a New York mainstay almost overnight when dignitaries, celebrities and socialites adopted it as the place to go for afternoon tea. But as decades passed, things became outdated; the color scheme seemed wrong, the lighting too dark. The space also closed each evening, leaving an awkward void in the center of the hotel. In 2014, management decided to give it a complete architectural and design overhaul, and to relaunch the menu as well. Now, lunch and tea hours are extended; the ambience is brighter, airier and lusher; and instead of shuttering after hours, the space transforms into a cocktail lounge. Regular customers embraced the update. “They were hungry to see some new changes,” says Amin Deroui, manager of the Palm Court. “Most feedback has actually been outstanding.”

Peter Luger figured out their recipe, literally and figuratively, and stuck with it. Illustration credit: Gabrielle Muller.

Maintaining a balance between the old and new has also been key for Sahadi’s, a Middle Eastern bulk supplier founded in 1895 in Brooklyn Heights. But as the neighborhood evolved and shoppers’ interests extended to other international products, Sahadi’s realized it needed to expand the geographic range of the foods it sells. The shop, which is still family-owned, now considers itself a general specialty goods store with a Middle Eastern slant. “We have to grow with the times and change with the neighborhood, because if not, we won’t be here,” says proprietor Christine Whelan. “We also try to get involved in the fabric of Downtown Brooklyn by participating at various events, to constantly keep ourselves in the community’s eye.”

Even community staples can experience rough patches, though. Katz’s Delicatessen opened in 1888 and was an icon well before it was featured in the famous orgasm scene in When Harry Met Sally. But business still ebbs and flows, to the point that Dell has had to take out loans on occasion. Finances were especially strained after 9/11, when the city practically shut down and Katz’s set up as a command center, supplying free food to firefighters and volunteers. Hurricane Sandy’s power outages also left a dark mark, while a busted water main recently caused basement flooding and cost $100,000 in lost merchandise. “In the restaurant business, there’s always a fire, literal or metaphorical,” Dell says. Occasionally, he has been tempted to accept one of the many offers for franchising, purchase or investment that Katz’s constantly receives, but so far he and his family have been able to remain independent. “We do accept corporate money in the form of catering orders—ha,” he says. “But seriously, I do understand the appeal.”

Peter Luger also gets approached “all the time” by people who want to buy or franchise the business, Berson says, but it’s not something his family has ever been interested in pursuing. “As you expand outward, you very quickly lose that grasp of control over every detail of the business,” he says. “Things start falling through the cracks.”

But what’s good for Peter Luger is not necessarily right for others, he continues, including Roberta’s. “Whatever you feel is necessary to promote and sustain your business is what you have to do,” he says. “If Carlo thinks this is the best thing for his business, I give him all the support in the world.”

Time will tell what effect, if any, the corporate involvement has on Roberta’s food, service and ambience. But as Kingra points out, “So long as they’re running a great business, then what does it matter who’s signing the checks at the end of the day?”

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