One sleepless night in 2020, Cameron Mitchell Restaurants president David Miller’s wife looked at him and asked, “If this doesn’t work out, what would you do?”
The restaurant industry was in chaos, uprooted by the COVID-19 pandemic and shutdowns across the nation.
His answer was simple:
“I chuckled at her,” Miller says. “I’m like, ‘Honey, I know nothing else. So this has to work out.’”
Cameron Mitchell Restaurants underwent its own turmoil in the early days of the pandemic. The company shuttered more than 60 units and furloughed nearly 5,000 employees.
“Our goal at that moment in time was really just to try to protect the company, so that when and if we were able to reopen, we had a company to reopen,” Miller says.
So how did the company get here, in 2021, with an estimated $300 million in sales under management and average Ocean Prime average-unit volumes of $11 million, a 20 percent increase over 2019?
The comeback came after several restless nights and a heightened focus on taking care of employees. Miller says, although the decision to close restaurants even before many governors had issued orders was initially met with frustration by staff, their main reason was to protect employees and guests. After all, this was during a time when no one knew the full extent of what COVID was and how it was transmitted.
“To some degree, it was just a gut reaction to shut down,” Miller says. “I honestly think if we had not shut down, we could have possibly bled the company dry of capital.”
“We look back and we say that, ‘Thank goodness we did that,’” Miller adds. “We protected our associates, and we preserved the company.”
In the meantime, CMR raised roughly $600,000 for employees to help them put food on the table. The company continued paying for employees’ health insurance and did the best it could to take care of workers, Miller says.
Upon receiving a $10 million PPP loan and working with landlords and partners to renegotiate leases and rent, CMR emerged from the depths. By June 2020, the majority of CMR restaurants were open. Still, some markets like Philadelphia, D.C., Chicago, and Los Angeles were more restrictive and slower to recover.
Once they got to the point of reopening, the company still didn’t know to what degree guests would feel comfortable coming back. Sales varied over this time, from 40–60 percent of CMR’s volume in what Miller says was not a sustainable business model. By early 2021, sales were still at 60 percent. Today, though, CMR is bringing in sales 120 percent north of 2019 levels.
- CMR’s Ocean Prime brand’s average-unit volume: $11 million (20 percent increase over 2019)
- 2021 Ocean Prime Boston run rate of $20 million (40 percent increase over 2019)
- 2021 Ocean Prime Tampa run rate of $19 million (15 percent increase over 2019)
- 2021 Ocean Prime New York run rate $17 million (10 percent increase over 2019)
Miller attributes greater demand to higher consumer confidence as more and more people got COVID vaccines and longed for the social gathering spaces of restaurants. But the gray cloud of the omicron variant hovers over CMR and all restaurants, he says, and he continues to occasionally wake up wondering whether COVID will throw the industry a new curveball.
Other twists for the industry, like the labor shortage, persist. In September, there were roughly 1.6 million open jobs in leisure and hospitality, which is 10 percent of all jobs in the industry. Some CMR units still have to restrict reservations or operate on different hours due to staffing challenges, Miller says.
Staffing remains at about 90 percent of full levels at CMR. Part of the reason the company continues to retain employees is through its culture, which Miller says is the lifeline of the organization. When CMR originally brought back managers, the company could only offer 80 percent pay. Eventually, pay improved to what it was and more. Managers got a raise of up to 110 percent their pre-COVID figures.
“It’s a family environment,” Miller says. “And we work very hard at that and keeping that environment. And what do you do with your family? You protect your family. You care for your family. And that’s what we’ve always done and we’ll always do.”
There are many reasons to be grateful at CMR, he adds. Management turnover is low, and customer demand is at an all-time high.
In earlier pandemic days, carryout comprised 15–20 percent of business at restaurants. It’s now slowed down and kept consistent as diners return inside.
“Guests certainly have a new appreciation for carryout businesses and carryout food, and restaurants had to rethink how we did carry out to make it as efficient as possible,” Miller says. “So our guests have as close to the same experience eating at home as they do in our restaurants.
Catering hasn’t recovered as strongly and likely will not until more businesses return to their offices, Miller says. Overall, however, customers have been excited to be back in restaurants.
When guests were cut off from the restaurant industry completely during shutdowns and COVID restrictions, they realized how important the industry was to the fabric of their social lives, Miller says.
“There are some silver linings,” Miller says. “And I do feel that the average consumer really has a deeper appreciation for the restaurant and hospitality industry than maybe they did before.”
So CMR remains bullish on its future, planning to open five restaurants in the next year and a similar amount in the next three to five years.
“It is the lifeblood of our organization,” Miller says. “We have associates that came to work for us to build their careers and build their families and their personal lives, and we want to create those opportunities today just like we have over the past 28 years.”
As long as CMR can continue to operate restaurants at a high level, it will continue to expand, Miller says. The only periods the company briefly stopped was during 2020 and the Great Recession in 2008–09.
For CMR’s national brand, Ocean Prime, the company plots a footprint in major markets, from New York City to Boston and Beverly Hills to Tampa. CMR’s specialty brands, however, are systematically and slowly expanding into markets they’ve already found success.
Barring any other unexpected circumstances, Miller predicts sales to keep climbing next year. However, with inflationary headwinds and labor costs driving up, guests will likely see a higher price tag on their menus.
Some recent movement:
- Budd Dairy Food Hall, opened April 2021
- Prime Social Kansas City, which opened November 16, 2021
- Del Mar Naples opens December 2021
- Ocean Prime Kansas City opens in early 2022
- Valentina’s, Columbus, Ohio, opens in 2022
- The Pearl, Tampa, Florida opens in 2022
- Four additional Ocean Prime locations (TBA) in 2022–2023
Miller anticipates a price raise of 5 percent to meet these headwinds as he believes the labor shortage will likely not improve until late next year. Typically, CMR increases prices by 2–3 percent a year.
“In our restaurants and all restaurants, you have no choice,” Miller says. “Labor costs are going up through the roof at a rate they’ve never gone up before. Your cost of goods are going up at a rate that they haven’t gone up before. So the only way restaurants and people can combat that is you have to pass some of that on.”