Out to Lunch?

Out to Lunch?

Even before the pandemic, lunch was dying. Americans went out for the midday meal 433 million fewer times in 2016 than the previous year, costing the industry about $3.2 billion, according to market-research firm NPD Group. When the pandemic forced people out of their offices and into their homes, lunch continued its decline, and even in May 2021, when total restaurant visits were up 23 percent over the disastrous 2020, day-part traffic managed to drop even further. (According to FastCasual.com, lunch is down four percent from 2020 and 10 percent from 2019.) But as more people receive vaccinations and workers slowly creep back into offices, will lunch make a comeback? Or will it be a COVID casualty? 

With rare exceptions, restaurants say that lunch has been the slowest meal to rebound. This is especially true of spots dependent on office workers for business lunches, like many located in downtown Denver and in the Denver Tech Center. Vacancy rates at Denver offices have climbed to an 11-year high, and restaurants are feeling that absence.  

“It’s not even on our radar; the conversation [of reopening for lunch] hasn’t even come up. Right now it just wouldn’t make any sense—I just don’t think there’s demand,” says Aileen Reilly, co-owner of Uptown’s Coperta, which drew its lunch crowd from the city center and surrounding office buildings. “We used to have some of those business groups in, and we got to be more of a leisurely lunch spot. People came in and sat for a few hours. That’s who we always knew was coming in, and they’re not coming back [because] people aren’t going back to the office.”

Without office workers to serve, Coperta has remained dark during the day. And while Reilly says she’s seen an uptick at weeknight dinner, it’s not enough to make up for the lack of lunch revenue. “I’d love to say there’s a secret equation for us to bring that [revenue] back, but there’s not. We’re not recovering sales.” Downtown lunch-only operations like the food truck-centric Civic Center Eatswere totally decimated. “We’re definitely not seeing that downtown workforce,” says Eric Lazzari, executive director of Civic Center Conservancy, which operates the summer weekday food-truck pod. “That’s 70 percent of our audience in a typical year, and they just weren’t there. The ones that were, didn’t come to the park as much.” 

Some of that was due to deteriorating park conditions (it was recently closed to the public for safety and sanitization concerns), and some was because of downtown’s changing daytime demographics. Civic Center Eats’ 2021 business was only 25 to 30 percent of what it was in 2019. When Lazzari was planning this past summer’s event, he scaled down operations to accommodate the anticipated drop in visitors, going from a pre-pandemic 10 to 20 trucks a day to only five to seven. But even the best-selling trucks took a hit. Lazzari estimates that, at best, top trucks hit only 75 to 80 percent of pre-COVID gross sales.  

To make up for the diminished lunchtime crowd, Lazzari tried something different: He added dinner hours to Civic Center Eats in the hopes of drawing work-from-homers out in the evening. “That didn’t work so well,” he says. “We’re operating at pretty thin margins, so we could give it runway for only so long, but overall, Civic Center Eats is one of the ways we bring in revenue for the rest of the stuff we do.” Instead of being a moneymaker for the nonprofit Conservancy, which helps with park upkeep and restoration, Civic Center Eats became something it had to subsidize.  

Even if diner demand exists, many restaurants simply can’t find enough workers to open for lunch. Natascha Hess, owner of the Ginger Pig, says the restaurant was pulling in $500 to $1,000 at each of its Friday through Sunday lunch services. That was money Hess was reluctant to give up when she closed during the day this summer, but without a fully staffed restaurant, workers were stretched too thin. “Having our three busiest nights and prepping during lunch and having lunch open was hard. We’re understaffed, and those long days of lunch and dinner were hard on the business and hard on the people,” Hess says. “It was scary for me at first, because we were giving up this revenue I felt like we needed.” 

But the outcome surprised her: Dinner got busier and Hess’ workers got happier. Without the extra-long days, everyone could focus on excelling at dinner, and, with the addition of karaoke and trivia nights during the week, the Ginger Pig made up for the lost lunch revenue almost immediately. Even if staffing issues go away and she can hire all she wants, Hess says she won’t bring lunch service back. “It’s not a good use of our time and energy. I made a shift—this is a dinner restaurant.”

Longtime restaurant consultant John Imbergamo says the decision whether or not to serve lunch has changed since the pandemic. “It’s a different calculation than it was two years ago. It’s nearly impossible to find staff, and when you do find them, you’re paying them more. It’s not just hiring hourlies; it’s finding, training, and paying for another full-time manager to run the additional five shifts a week,” he explains. “It’s also all packed into an hour and a half, which makes it more difficult to staff. Then people don’t drink as much during lunch. When checks are half (or less than half) of dinner check averages, but you’re doing the same amount of work for less revenue, you have to consider that. There are lots of challenges for lunch.”  

Staffing has been tough at Troy Guard’s fleet of restaurants, too. To pull in more workers, Guard has hired a full-time recruiter and he’s paying more than he ever has. Still, he doesn’t have enough staff to bring back daytime hours at some of his spots like Guard & Grace, Bubu in Republic Plaza, and Los Chingones at Colorado Mills and Central Park.  

Bubu and Los Chingones, Guard’s lunchiest restaurants, are serving the meal at select locations, but he estimates they’re bringing in just 70 to 75 percent of pre-pandemic sales. He attributes a good portion of that decrease to the drop in office workers. To make up for that lost revenue, Guard has been doing more catering, much of it himself. He’s appreciative of the uptick, but he’d like to get more of his restaurants open during the day.  

Guard hopes to resume lunch service at downtown’s Guard & Grace this winter, but the decision needs to make economic sense. The upscale steakhouse averages $100 per person at dinner. Tickets during lunch, though, are around $30. “It costs the same amount to run a restaurant at lunch as dinner, and I’m going to lose $70 a person,” Guard says. “It doesn’t add up well, right? We did it as a means—we think lunch generates dinner business. Lunch in most of our restaurants isn’t where we make money; it’s at dinner with the higher check averages.” 

The Ginger Pig’s Hess agrees. “More people spend money at dinner than at lunch,” she says. “Our average ticket price at lunch is about half of what it is at dinner.” That’s why so many upscale restaurants have elected to stay closed for lunch. The payoff just isn’t worth scrambling for workers in a tight labor market, potentially burning them out, and using up resources.  

Maria Empanada, though, is primed for lunch. Lorena Cantarovici’s three fast-casual empanada spots have remained open, to varying degrees of success. Her outpost at Aurora’s Stanley Marketplace has done the best, as the food hall brought in a wave of visitors with its immersive Van Gogh exhibit over the summer. Denver’s South Broadway Maria Empanada location has also been picking up, but the Platte Street spot, with its more urban setting and ongoing construction, has struggled with in-person dining. 

Cantarovici’s delivery business and nationwide shipping of frozen empanadas has made up for the drop in lunch traffic. “We weren’t ready for online ordering at the time COVID hit, but we saw the opportunity and did it very fast,” Cantarovici says. A mention from Guy Fieri on national television certainly helped with empanada demand outside of Colorado, and because of this increase in shipping and deliveries, she says overall sales are about where they were pre-pandemic. 

For restaurants still killing it during the daytime hours, a few factors seem to contribute to success. First, it helps if a spot has been around for a while and has collected a devoted group of regulars. Take the 54-year-old Bagel Deli: The east Denver staple is doing the same level of sales now as it was in 2019, according to owner Joe Kaplan. Lunch is its biggest meal and was the first to rebound, largely thanks to the restaurant’s intensely loyal customers who were anxious to return once vaccines were available. “Our clientele has been so wonderful,” Kaplan says. “We’re not in the Tech Center, we’re not downtown, so there needs to be a reason for people to come. We are a destination restaurant. People don’t come because we’re a half block away. It’s the loyalty of this long-term customer base we have.” 

Besides the familiar faces, Kaplan says he’s seen an influx of new customers who discovered the Bagel Deli through delivery apps. The shop has had so much lunch business that even with an earlier post-pandemic closing time, its numbers are just as good as they were two years ago. (The Bagel Deli shortened its hours mainly because of staffing issues, although Kaplan says they’re fortunate to have a roster of reliable employees.) 

Seizing the opportunity to take an entirely new approach to lunch can also be a boon. Larimer Square’s Rioja is doing better than ever during lunch because of its pandemic pop-up, Flavor Dojo. “We always wanted to gain lunch business at Rioja, so we went with something a little bit lighter, not quite as Rioja-esque,” says partner Beth Gruitch. “We decided to do a whole different concept. At first we thought [Flavor Dojo] would be great for takeout, but it never flew. We’re just not the place you think of for delivery.” Reimagining what Rioja had been doing at lunch and switching gears to the salad-heavy Flavor Dojo was huge. “We’re up 55 percent at Rioja [for lunch] from 2019. It’s pretty phenomenal,” Gruitch confirms. The other thing that helped the restaurant was expanded patio seating out into Larimer Square. “It basically tripled or quadrupled our patio seating,” Gruitch says.  

Ami Dia and Kim Gaiko, co-owner and manager of Le French, respectively, also credit expanded outdoor dining with boosting sales. “The patio business has been so valuable,” Gaiko says. “The extension allowed us to have larger parties that wouldn’t normally fit on our patio.” 

Located in the Denver Tech Center, Le French hosted many working lunches pre-pandemic, but since COVID hit, the lunch customer has changed. “We have more people coming for leisure, to just enjoy a lunch,” Dia says. “We’re getting a lot of big tables lately. We used to have, at most, four tops, but now we can go up to 10 or 12.” Le French has been able to accommodate bigger groups because of its increased patio seating; Dia and Gaiko estimate the patio’s capacity is about double what it could hold before. Still, the duo say lunch has been their slowest meal to come back.  

With outdoor dining looking less appealing during Colorado’s winter months and fewer people saying they feel comfortable eating inside a restaurant (60 percent in September 2021 versus 70 percent in July), there’s the possibility that restaurants could, literally, lose their lunch in the upcoming days. For some, it’s dead weight they’re willing to lose, but for others, it’s a critical part of business. Especially for eateries that fed office workers their midday meal, it was a chance to show off their food and entice diners back in for bigger ticket dinners, while making a few bucks during the day. “It’s a great opportunity to still get out without the commitment of dinner and still get great food,” Gruitch says of the meal. “We hope people come back with business lunches in mind.” 

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