How do you operate a popular restaurant in NY?

I must confess that I am a fan of Balthazar. For those who have not heard the name, it is a french brasserie in the SoHo neighborhood of New York. I think their onion soup is sublime, fries are delicious, and profitroles are absolutely the best. However, this is an operations blog, so, here fittingly comes an article from the NY Times magazine, nicely describing why Balthazar is so good.

For starters, I knew that the restaurant business is extremely competitive and labor intensive, but this article is eye-opening in a few aspects. First off, the restaurant is literally a 24 hours a day operation:

For now, everything is quiet at Balthazar. The last guests from the night before left just a few hours ago, and the nighttime porters are still finishing their thorough scrub of the restaurant. But the delivery trucks are starting to arrive all over again, idling on Crosby.

Second, the sheer volume of the food they serve is impressive:

By the end of the day, the rotating staff of six cooks behind the line will have produced 111 steak frites, 90 French onion soups, 88 Balthazar bar steaks, 69 burgers, 68 omelets, 62 goat-cheese tarts, 56 chicken paillards, 51 chicken clubs, 48 seared salmon fillets, 46 heirloom-tomato salads, 45 sides of fries, 44 chicken-liver-and-foie-gras mousses, 43 duck confits, 40 grilled dorades, 39 steaks au poivre, 39 eggs Norwegian, 38 steak tartare appetizers (plus 16 entrees), 32 escargot, 32 moules frites, 29 grilled trout — the list, pulled from the P.O.S. terminals, goes on and on and on.

 

The day referred to in the article is a relatively slow one with 1247 people eating there (normally it is 1500). Mind you that the restaurant has only 180 seats, so the table turnover is essentials. Accounting for less than 100% utilization, each table has to be turned about 10 times, multiplying that by 90 minutes average dining time means that all tables are completely busy for 15 hours a day!

Third the margins – here we can get only an estimate, but it is impressive:

During the busy season, Balthazar spends $90,000 a week on food to feed some 10,000 guests.

So the cost of food is $9 per customer. Average check I reckon, is no less than $50. That does amount to a quite a markup, that allows decent pay for waiters, food runners and bus boys.

The key to all of this – is, not surprisingly, a careful process design: Continue reading

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