Danny Meyer on the key takeaway for rescuing restaurants

Danny Meyer on reviving the restaurant industry
Danny Meyer on reviving the restaurant indust... 07:51

"I miss people," said restaurateur Danny Meyer. "I miss smiling. I can't smell the smells of restaurants."

For Meyer, after four months, the Connecticut countryside – no matter how beautiful and safe from coronavirus – is one long reminder that it's not New York City.

"I can't hear the clanging of dishes and glasses. There's a sound of camaraderie that you get in restaurants. I miss that. I miss seeing our staff members."

His longings, their longings, scrawled on the papered-over windows of his Michelin-starred Gramercy Tavern, like eulogies for the once-upon-a-time world before coronavirus.

gramercy-tavern-we-miss-you-620.jpg
A sign in the window of Danny Meyer's Gramercy Tavern in New York City.  CBS News

Among the 20 restaurants with Meyer's name attached are some of New York City's top-rated and most popular (including Union Square Cafe, Blue Smoke, Caffe Marchio and Manhatta). Meyer closed them all in mid-March, and then laid off all but about 70 of his employees – nearly 2,100 jobs lost. But being let go meant staff qualified for unemployment benefits.

Correspondent Martha Teichner said, "It must have been a nightmare."

"It was only a nightmare on the nights when I slept," Meyer said.

The Union Square Hospitality Group, the company he'd spent 35 years building, went from more than $100 million in revenue in 2019 to zero, overnight.

"In the restaurant business, you don't have enough cash flow to get through probably more than a month or two without just running out of money," Meyer said.

Shake Shack, also founded by Meyer, got a $10 million federal Paycheck Protection Program loan, but gave it back because, as a public corporation, it could raise money to stay afloat from other sources.

Not so the privately-held Union Square Hospitality Group. The restaurants kept the PPP loans they got (less than $15 million) to pay salaries, utility bills, and sky-high New York City rents for who knows how long? Meyer calls the money "a lifeline."    

"And so you say to yourself, 'If I want to be a great employer when this is over, the best thing you can do for people is actually to be in business when it's over and to be solvent,'" Meyer said. "And that was the really bitter pill to swallow."

WEB EXTRA VIDEO: Danny Meyer on overcoming threats to business success:

Danny Meyer on overcoming threats to business... 02:33

So, Meyer said he wanted to be a great "unemployer," and created the HUGS fund. "I gave up 100% of my compensation, gave it to the fund. We sold gift cards for a week. We've conducted a number of auctions. And at the end of the day, we were able to raise over $1.5 million, and granted out just about all of that so far to people on our now-former team as a way of saying, 'Look, we didn't stop caring about you.'"

Meanwhile, he tries to figure out what hospitality will look like for the Union Square Hospitality Group in an inhospitable COVID world. Meyer said, "I've always believed that hospitality is something that human beings need to give and need to receive, kind of like a hug." Sorry, no hugs allowed anymore.

Everything about social distancing contradicts Meyer's notion of hospitality.

At the bar at Union Square Cafe, Chip Wade, president of the Union Square Hospitality Group, said, "This was a very vibrant and active bar, that could have been two, and sometimes three people-deep. And our patrons, our loyal guests, would be standing in deep conversations, reconnecting with people."

union-square-cafe-bar-620.jpg
The bar at Union Square Cafe, decidedly less crowded, is now doing takeout orders. CBS News

Inconceivable now, the café is currently the staging area for themed six-packs of wine the restaurant is selling online for curbside pickup – a stab at generating at least some revenue, with indoor dining still weeks away in New York City.

"We don't have a playbook for this," said Wade.

How to second-guess re-opening at 25 or 50% of capacity, when breakeven is more like 80%, and safety is an issue, for guests and employees?

closed-restaurant-cleaning-620.jpg
CBS News

The company has put together a training guide – 23 pages of small print. "There's a validation and certification that every chef and general manager, and ultimately our employees, have to take and pass before we will invite them back to work," Wade said.

"Really, a test?" asked Teichner.

"There is a test, exactly."

The National Restaurant Association said that COVID has put at least 20,000 restaurants out of business in this country. So, the big test is how to survive.

Meyer said, "I see restaurant dining rooms that are staffed by a much more diverse group of people. I see restaurants that love you more than they ever did. I see a lot less attitude at front doors, a lot less small talk around the table: 'Is the lady still working on her salmon?' Stop it. I see authenticity. I think it's gonna be a while before people say, 'The thing I really crave is the 18-course tasting menu.'"

outdoor-dining-620.jpg
Indoor dining is still not allowed in New York City.  CBS News

Danny Meyer is nationally-known as a leader and innovator. He thinks the COVID crisis has exposed an ugly truth: that the restaurant industry is broken, and now is the time to rethink not only how to social distance restaurant kitchens, but everything about the business model, from employee pay and tipping, to impossibly high rents.

Restaurants, he says, are essential to recovery "both for the economy and for life. There's 660,000 restaurants in this country. You don't understand, if you're a typical American, that our industry employs more people than the auto industry and airline industries combined."

Three Danny Meyer kitchens have just started cooking for a charity feeding needy New Yorkers – that's 20 rehires, a start.

danny-meyer-kitchen-for-charity-620.jpg
Kitchen employees prepare meals for charity.  CBS News

Wooing the public back is about building trust, and at his Daily Provisions, basically high-end grab-n-go, there's a personal note with that takeout bacon and egg sandwich with the special sauce: "Thanks for visiting, Martha!"

Hospitality is the key ingredient in the Union Square Hospitality Group's recipe for survival. But of course, what's a recipe without a secret sauce?

      
For more info:

       
Story produced by Jay Kernis. Editor: Steven Tyler.