Can Restaurants Survive Rising Costs?

Danny Meyer 0:00 I once got into a fist fight in the very first year I opened Union Square Cafe with someone who was drunk and parading around the dining room with his tie tied around his head, complaining that we didn't serve baked potatoes. Um-

Kara Swisher 0:13 Oh.

Danny Meyer 0:13 That's not-

Elazar Sontag 0:14 Classy.

Kara Swisher 0:14 [laughs] Classy.

Danny Meyer 0:15 Not really what I, uh, have built my career on, that kind of thing.

Kara Swisher 0:19 Yeah, wasn't about a potato.

Danny Meyer 0:20 It is on.

Kara Swisher 0:21 [upbeat music] Hi, everybody. Restaurants are up against a lot right now. Rising food costs, labor shortages, and affordability issues have made a tough industry even tougher. So today, I'm speaking to some of my favorite food experts on what it takes to succeed today, how the industry's changing, and where they see opportunity. Susan Feniger is a veteran chef, cookbook author, entrepreneur, and co-owner of the Mundo Hospitality Group. Danny Meyer is the founder and executive chairman of the Union Square Hospitality Group. And Elazar Sontag is the Washington Post's food critic. Why do I wanna talk about food? Well, we all gotta eat, but actually, it's the most, one of the most important industries in the United States, and one that has been hit by tech, by labor issues, by immigration issues, by food costs, by the tariffs. It's a really tough industry, as I said previously, and it's important to understand where it's all going. So let's get to it. Susan, Danny, and Elazar, thank you for coming on ON.

Susan Feniger 1:22 Thank you. Fantastic to be here.

Danny Meyer 1:24 Great to be here.

Elazar Sontag 1:25 Happy to be here.

Kara Swisher 1:26 Elazar, in your first column for The Post about a year ago, you wrote that in addition to

Kara Swisher 1:30 covering the DC dining scene, which a typical critic does, uh, you're also covering the way restaurant culture is evolving nationwide, and that's pretty ambitious. So I'd like to start by asking each of you, what is one of the biggest changes you've seen in the restaurant culture over the course of your careers, and what surprised you the most and why? And so Elazar, let's start out with you, and then Susan, and then Danny.

Elazar Sontag 1:55 So much has changed. I mean, uh, in the last, you know, I was gonna say decade, but, but even really in, in the last five years since the pandemic, I, I think it's, it's not an exaggeration to say that everything changed, and then, you know, some things sort of went back to how they were. But there, there really was a seismic shift. I think the thing that I'm paying the most attention to and that feels like it's maybe changed the most, and, and has sort of shifted in a way that feels most permanent, is hospitality, and just the broad relationship between diners and restaurants. Sort of like what, what diners want or expect a restaurant to be and, and what a restaurant really is or what a restaurant thinks it owes its diners, I think is mismatched now in a way that it maybe wasn't in the past. I think a lot of diners still expect a certain kind of customer is always right service, and you know, if, if I come four weeks in a row, then I expect a free glass of champagne or, uh, you know, a small gift from the kitchen. And on the other side of the equation are a bunch of chefs and restaurateurs saying, "You know, I'm, I'm barely, I'm barely staying afloat here," and the margins get smaller and smaller, and, you know, the costs of business just fluctuates madly.

Kara Swisher 3:14 Absolutely. Mm-hmm.

Elazar Sontag 3:15 And I, I think that that relationship has always been there, but to me, it feels particularly kind of poignant right now.

Kara Swisher 3:23 Oh, interesting. Susan?

Susan Feniger 3:24 Yeah, I mean, during COVID, I think, um, as always, the restaurant business stepped up in a huge way to support the community. I mean, we ended up, you know, initially starting with doing 3,000 meals a day for clinicians. That has expanded since then. Now we're doing around 3,000 meals a day for food insecure out of our commissary because, y- of course, it's the right thing to do, and the need is there, continues to be there. But diversification was so critical because people weren't going out. What we've seen in LA, which is, I think, across the country, but certainly in LA, we're just hit with restaurant closures. Food costs has gone up dramatically. Labor costs, which, of course, labor should go up because employees need to get paid more, but that's gone up dramatically. Like, we're talking huge numbers. Yet, I think the public maybe during COVID learned to cook, learned to understand they could do more at home, so people doesn't feel like they're going out nearly as much. I think profitability has shrunk, and, um, it just feels that there's been a whole shift in terms of how people are dining out. I mean, certainly there are restaurants in LA that are doing quite well, but it's mind-boggling to see not only large, sort of known restaurants going out of business continually over the last five years. The food business is such an amazing business. I mean, P- I can't tell you how many times we've called Danny to get questions answered and input, but everybody is struggling, for sure. But it feels like LA has just really dropped dramatically.

Kara Swisher 5:13 Plus the industry. Plus the industry. The main industry has certainly declined there.

Susan Feniger 5:17 All of the people that are working for us, so many people have been absolutely petrified to come to work and be there.

Kara Swisher 5:24 Because of ice.

Susan Feniger 5:24 So the labor shortage is-

Kara Swisher 5:25 Yeah

Susan Feniger 5:25 ... it's crazy. And yet the, I think it's true. The customer, which, of course, they should be right. That's, they're the ones paying. But there is sort of the same demand, although everything else has gone up.

Kara Swisher 5:38 Got it. Yeah.

Susan Feniger 5:38 You know, price is that, so it's interesting.

Kara Swisher 5:40 Yeah. Danny?

Danny Meyer 5:42 Well, I think we learned a long time ago that the customer's not always right, and that, uh, and that's because no one's always right. The customer needs to feel heard, but I do think that, um, y- when you're in the hospitality business, you're obviously have the same goal as your guests, which is that they leave a little happier than however they came. But I think that, um, that coddling people to the point of entitlement has not served anyone. Because at, at the end of the day, the, our first customers actually are staff members. Um, that's why we are in this business, is to provide career opportunities. And, you know, what Susan was saying is absolutely true. You know, 20 years ago, um, I'd never closed a restaurant before, and you, you lose a community when you do that. You lose the community of people who work for you, and you lose the community of the relationships you have with your guests. Now, a lot of other things have gone very well in that time, but if, if I were to say what's changed the most in the last 20 years, I think it's been technology-driven, which is that, um, people now know that, whether consciously or subconsciously, they are either voting with their meals for convenience or experience. And the convenience thing that did not exist 20 years ago is I can just push a button and have room service delivered to wherever I am from wherever I want it. The good thing is, I think we've kind of turned the corner right now, and there's so much, um, desire for people to be with people that restaurants actually still, maybe more than ever, provide that community opportunity, uh, for in-person humanity.

Kara Swisher 7:32 Well, it kind of accelerated a trend that was already happening. W- this takeout, sort of this soup, soup, like as if y- everybody lives in New York City, 'cause New York City always had that experience in some level, to some level. Um, Danny, I'm gonna continue just for a second. Your new book, uh,

Kara Swisher 7:46 is called "What Could Possibly Go Right," which makes me laugh every time I say it. It looks at the transition from restaurateur to leader of a major hospitality company, and the bumps and bruises along the way. Um, what's the distinction between being a restaurateur and running a hospitality company? Um, y- uh, what, what is the difference, and how has the approach changed to succeed in the, the more difficult industry?

Danny Meyer 8:09 Well, you still care just as deeply about every guest experience. Um, and I've been able to use technology to be able to see who's dining in our restaurants tomorrow, go over every single name the night before, and then the night, and then the morning after, I get a chance to read all those reports of what actually happened on those tables. However, when I was a restaurateur, I was the guy on the front door greeting every single table. And there came a, a tipping point where, probably when I had about six restaurants, uh, where I couldn't walk to every one, couldn't be at every single one for every single mir- meal period. They all used to be within a 10-minute walk of one another. And that's the point at which I had to just acknowledge that my job is now to lead a culture of people to hopefully make the kind of hospitality decisions I would've made if I had been the guy right on the front door.

Kara Swisher 9:02 So, uh, Susan, you and, uh, your business partner, Mary Sue Milliken, worked in the restaurant industry for decades also. The Border Grill in Las Vegas flagship is still going strong after 27 years. You've expanded into stadiums. I saw one the other day at, when I was at one. And you just opened the Feed, uh, Folks Border Grill catering commissaries, which you just noted, which you mentioned earlier. Um, y- talk about the difference of doing that, 'cause you've had businesses in business a long time, but still, have you suffered from the same thing?

Susan Feniger 9:33 Yeah, I mean, you know, I think, like I said, we, you know, during COVID, we diversified, like, because we needed to figure out how to survive. And really, I think like Danny said, the sort of most, in many ways, the most important thing, I think, for Mary Sue and I are the people who are our family, who work for us. And the idea of laying off so many employees, I think that the diversification was really wonderful. Not only were we supporting the city, you know, with helping food insecure and people in temporary housing, which was amazing, but also, we were able to bring people back to work. And so that was really rewarding. I mean, we've, Mary Sue and I have been business partners 46 years, and all, you know, basically, we started out as cooks and, you know, became chefs and opened up our first restaurant and didn't know anything about really running a business except how to watch food costs. But, you know, in many ways, it's about relationships. It's about the people that work for you and how to motivate them and keep them feeling heard and, um, passionate about what they're doing. Not that different than the restaurant business, but in terms of generating growth, it's very different because you don't have people walking in the door, and your business isn't 100% dependent on enough people walking through the door. With the commissary business, you have to go out and try to create a new business, and many of it is through the nonprofit world and through the county and city and federal government funding. But you sort of know how many people you're gonna be feeding each day. And so it's, it is a whole new business for us. We're doing, you know, we're working in the nonprofit world. We're working at, we're trying to, you know, supply hot meals individually plac- packed. In addition to that, maybe we're working on a program for perms, those people that are in temporary permanent housing, how to teach them how, get food-

Kara Swisher 11:39 Yeah

Susan Feniger 11:39 ... and how to cook and supply for themselves. It's very different than people, you know, getting ready for doing 100 dinners or 200 dinners.

Kara Swisher 11:47 Right.

Susan Feniger 11:47 It's, it's a, a whole different model. So it's one of the great things about the hospitality world, is that you continue to keep learning-

Kara Swisher 11:54 Right

Susan Feniger 11:54 ... which is really wonderful. But it is-

Kara Swisher 11:56 But it's not a business

Susan Feniger 11:57 ... a different business.

Kara Swisher 11:57 Yeah, a different business.

Susan Feniger 11:59 Yeah.

Elazar Sontag 11:59 I was just gonna add one, you know, what, what Danny reiterated and has really been saying for a long time now, which is like, obviously, the customer is not always right. I think part of what I'm sort of grappling with right now, just as a critic, as a diner, as someone who talks to a lot of chefs, but also talks more so to, to other diners, is that I think there's a feeling right now, a, a little bit of like almost Indignation on the diner front, often it comes back to the question of tipping. This is often where it comes up when I'm talking to diners. You know, "Well, if the service was bad, why should I still have to tip 18, 20%?" And I think it sort of all comes back to this question of like, why should I have to understand how restaurants work? And I, I think maybe if I had to put a fine point on it, the thing that has changed the most culturally in the last five years is that I think by and large, chefs do want diners to understand restaurants. Um-

Kara Swisher 12:54 Right. That's a really,

Kara Swisher 12:55 that's a really good point. But one of the things that's actually changed for you is you're the Post's first non-anonymous food critic, which was sort of a game for a long time, since most restaurateurs knew who the, what the critics looked like. T- why did you decide not to be anonymous? Because you're, because, a- a- and, and are reviews as important as they used to be, given the explosion in regular citizens, you know, reviewing things or y- we'll get, we'll get into influencers in a minute, but, um, how is the job different when people know who you are and, say, recognize you?

Elazar Sontag 13:27 I think in terms of anonymity, I mean, there's sort of a, a just a practical reality, and then also sort of a spiritual, philosophical side. The practical side is just, um, you know, I'm, I'm in my late 20s. I was in my very early 20s when I started in this industry and started working in media, so I always had a digital media life. Um, there wasn't really a world like previous generations of critics, where I could ever be truly anonymous, so part of it was just introducing myself as sort of part of a new generation of critics. There are gonna be fewer and fewer anonymous critics by virtue of people have been posting themselves online for a long time. Um, there's still things I do, I think, you know, I, I don't talk about this so often sort of in my reviewing process, but I still book under aliases, and so I still try to make sure restaurants don't know I'm coming. There have been one or two times where, you know, I sort of succeed in, like, getting in the door unnoticed, and then I look over to the kitchen and halfway through dinner, I actually see them switching out their chef. Um, so it does make a difference. Like, you r- you don't want to be noticed, but I also don't think that anonymity is necessarily-

Kara Swisher 14:38 Important anymore

Elazar Sontag 14:39 ... no, and it's not, it's not the thing for me. Um-

Kara Swisher 14:42 For you. For you.

Elazar Sontag 14:43 In terms of, you know, does a review matter, I believe that reviews still matter tremendously to diners who care, because they just serve a different purpose than an Instagram video, um, or, you know, a, a social media post of, of any format. And that's not to say that they're sort of inherently better. Like, I-

Kara Swisher 15:06 Mm-hmm

Elazar Sontag 15:06 ... I really don't feel that way. I, I'm, honestly, sometimes I think the medium of a, a quick social video, like, gets the message out more impactfully.

Kara Swisher 15:15 Mm-hmm.

Elazar Sontag 15:15 But a review is a different kind of project. You know, I go to every restaurant three times. You know, all, I pay for all of my food. There are sort of no comps, and-

Kara Swisher 15:26 Mm-hmm

Elazar Sontag 15:26 ... I don't have to navigate complicated dynamics around coverage in exchange for-

Kara Swisher 15:32 Right

Elazar Sontag 15:32 ... you know, a meal, which a lot of influencers do because either they want to and they can, or they can't afford the restaurants otherwise. Um, you know, I, I talk to every chef. I interview every chef, like any journalist would for any sourced story-

Kara Swisher 15:48 Mm-hmm. Mm-hmm

Elazar Sontag 15:49 ... before I write the review, and it's different. It's just different. It's-- And I, I hope that criticism carries on. There are less critics than there used to be, but-

Kara Swisher 15:58 Yes, there are

Elazar Sontag 15:58 ... I think it would be pretty sad if, if we lost, if we lost the restaurant review.

Kara Swisher 16:03 So Danny, how do you look at that? I mean, how much do reviews matter anymore compared to other things?

Danny Meyer 16:07 I think reviews matter tremendously, um, in a, but in a different way. So when I opened Union Square Cafe, um, in 1985 as a 27-year-old, just maybe a year younger than, uh, this critic on the call right now-

Elazar Sontag 16:21 That's right

Danny Meyer 16:22 ... um, the reason we needed a, a reviewer at that point is that people didn't-- the consumer didn't even know the restaurant existed. We didn't have Instagram and, and, you know, Twitter and all that kind of stuff. And so this was a, this was a way to let people know the place exists. Um, they went through all the dishes. Here's what you should order. Here's what you should stay away from. Now that's changed because with influencers, with social media, you know the place is open even before the critic arrives. You actually know which dishes you wanna order because you've read it on Beli or, you know, some other platform. Your friends told you all about it. But here's why I think it matters even more than ever right now. The impact of a review has two different potential outcomes. Number one is that if it's a great review, uh, or maybe even a horrible review, it, it could impact your business still up or down. There's an authority that goes with the small handful of remaining mainstream media reviewers out there. Um, so can it impact your business? That's one thing. The thing that I think it does maybe even more than ever, though, is to impact the morale and motivation of the team. And I can tell you that when The New York Times began a couple years ago, a handful of years ago, to be much more of a national newspaper in its aspirations and s- and ceased to, to do a weekly review of a New York restaurant, the impact was, was mighty on our industry. Um, the, the restaurant review of The New York Times or New York Magazine, I'm sure it's the same with The Washington Post, gives restaurants and chefs something to aspire to on a daily basis because you don't know if or when the restaurant critic is gonna come in. You're on your toes just a little bit more, and I think that, um, absent that, I just, I, I think it's a disservice to the consumer because there's not as many people kind of watching and giving restaurants something to strive for. So I, I think restaurant reviews matter more than ever. Um, I can tell you that, um, we, we used to always know that with a new restaurant, you were gonna see the, the critic

Elazar Sontag 18:42 Probably within nine to 12 weeks of opening, you knew it. Um, with a new chef at a major restaurant, you knew you were gonna see the critic. We have, we have a restaurant called The Modern at the Museum of Modern Art, which is now 22 years old. Um, we have two Michelin stars, um, Relais & Châteaux. We have not seen a New York Times critic for three chefs, not for something like, uh, 14 years. And-

Kara Swisher 19:08 Wow

Elazar Sontag 19:08 ... so that doesn't mean we can't self-motivate to stay on top of our game, but-

Kara Swisher 19:13 Right

Elazar Sontag 19:13 ... it, we miss that.

Kara Swisher 19:14 It, it adds to it.

Elazar Sontag 19:14 We miss that edge.

Kara Swisher 19:16 H- h- what about you, Susan? How do you look at that?

Susan Feniger 19:18 Yeah, I mean, h- you know, it's interesting because certainly, you know, back when we opened City, which was '81, and on with Border Grill, which was '90, you were, like, for sure, same thing as Danny said, waiting for, at that point, might've been Ruth, I'm not sure, Ruth Reichl at, back in the early days there, and you were waiting for them to come in. The thing that I think Jonathan Gold brought, because there was always this feeling, I think, for myself and for Mary Sue, is that there's so many great little restaurants that never get attention. And so, d- I think there's that, there was, not so much now, but there was such an inequality, whereas if you were a known chef or you were on TV or you were a big name somehow, you'd get reviewed, and the little guy that was doing amazing food didn't. So Jonathan, I think, really brought that, at least in LA, to, like, there's great restaurants here that nobody may know about unless you live in the neighborhood. So I loved that. There, there was an equalizing thing that happened there that was really important. Um, you know, I think, um, it, it is so important for the team when you get a great review, and there's a, I think an authority that happens when a food writer does it versus when an influencer does it. Now, there have been times where I feel like you might see a review of a restaurant that just feels like, okay, those are, those are just opinions. They're not necessarily, you know, what feels important. I think as a food writer, you have a responsibility to be really fair and objective about the things that really matter. You may not like a certain dish, and it's important to say why it wasn't your favorite. I think when it becomes very cutting, it's not valuable. When it's feedback that's important, just like any comment on Yelp or anything, you always wanna look at it and say, "Is there truth there?" And if there is, then learn from it. And, and, uh, so I think, yeah, there's certainly, there's huge value to food writers, and it's true, you don't see near what you used to see.

Kara Swisher 21:32 What you used to see.

Susan Feniger 21:33 And it does- doesn't have the power that it

Susan Feniger 21:35 used to.

Kara Swisher 21:35 That it used to.

Susan Feniger 21:35 And I think that's a loss for the industry, for sure.

Kara Swisher 21:38 Oh, sorry, you just released just the Washington DC's-

Elazar Sontag 21:41 Yeah

Kara Swisher 21:41 ... 40 best. I don't know why it's 40, but I'd love to, [chuckles] like, why 40, not 50 and 35? I don't know. But w- what were you thinking when you were doing this kind of thing?

Elazar Sontag 21:50 I, I mean, mostly what I was thinking, honestly, was, uh, just how lucky I am. I, I have always... You know, I, I've done a lot of lists. When I was at Bon Appétit, I did, you know, sort of, in some ways, bigger national lists, you know-

Kara Swisher 22:03 Mm-hmm

Elazar Sontag 22:03 ... that were the best restaurants in the whole country. But the thing that I had always sort of admired most as a young reader and diner, and then later journalist, is the kinds of lists that Pete Wells and Ruth Reichl and, you know, Jonathan Gold before would put out that would sort of capture the, the story of a single region. I think that there's just something so special, and now kind of rare, about, uh, a media product that captures the spirit of a region. And it's, you know, it's my spirit of a region. It's not the absolute value of DC, but I was so excited to do this. And, and you're right that it is, like, kind of a, an OG, very traditional, not breaking the mold, um, way of, of doing restaurant criticism. And, and I actually love that. The reason it's 40 is 'cause it's been 40 for a long time, and there are elements of this kind of journalism that I actually think are sort of just about, like, honoring the, the tenets. Um, uh, you know, I don't want to reinvent the parts of restaurant criticism that, you know, Tom Sietsema-

Kara Swisher 23:13 Work

Elazar Sontag 23:13 ... and Phyllis Richman before him did so well. I wanna give people the thing that they love and that they sort of trust, like that establishment value that is harder and harder to find now. I just wanna give it to them my way. But I also left a lot the same.

Kara Swisher 23:27 Left the same. S- so-

Susan Feniger 23:28 You know, I wa-

Kara Swisher 23:29 Go ahead. Sure

Susan Feniger 23:29 ... I wanted to just throw something at, completely off this, but I wanted to say it before, is that, you know, I mentioned it earlier, the hospitality, the restaurant business is so giving. W- I think everybody across the country, restaurants big or small, give back to the community. When there's some catastrophic thing happening, when COVID, when the fires, when the writers' strike, restaurants just step up in such a huge way, and the community steps up all the time. And maybe that's something that doesn't ever get enough attention, is how much-

Kara Swisher 24:06 Mm-hmm

Susan Feniger 24:06 ... the restaurant community-

Kara Swisher 24:07 They certainly are, yeah

Susan Feniger 24:07 ... one of the biggest employers in the whole country, give back.

Kara Swisher 24:11 [upbeat music] Support for this show comes from Indeed. If you're a small business, the right hire can make all the difference. When the pressure's on and you need the right person, this is a job for Sponsored Jobs. People are finding quality hires on Indeed right now. In the minute I've been talking to you, companies like yours made 27 hires on Indeed, according to Indeed data worldwide. With Indeed, you can spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results. When you need the right person to cut through the chaos, this is a job for Indeed sponsored jobs. And listeners to this show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support this show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need the right hire fast? This is a job for Indeed sponsored jobs. [upbeat music] Support for this show comes from Bilt. Bilt is one of those ideas that seems like it should have existed sooner. Becoming a Bilt member means earning points on every housing payment. Rent, mortgage, it doesn't matter. You're paying it anyway, so you should get something back for it. Bilt points can be redeemed for flights, hotels, Lyft rides, amazon.com purchases, future housing payments, and more. You can even use them for fitness classes at SoulCycle, Barry's, Pure Barre, CorePower, CycleBar, Rumble, and Y7, among others. Here's exactly what you need to do to get the most out of your Bilt membership from the minute you sign up. First, download the Bilt app. Second, link any credit or debit card to the app so purchases at your local spots become even more rewarding. And third, ask the neighborhood concierge in the app pretty much anything. It'll tell you about exclusive member benefits at restaurants, fitness studios, on your Lyft rides, and more. Download the Bilt app and join the membership for where you live at joinbilt.com/kara. That's J-O-I-N-B-I-L-T.com/kara. Use our link so they know we sent you. Danny, one of the things, speaking of that, you, you write in your new book about the concept of essentiality,

Kara Swisher 26:26 um, which you say is a grand goal of your restaurants. Um, it doesn't mean perfection. What, what is, um, essentiality in that regard? Um, and what does it look like at a place like Union Square Cafe versus, say, a Shake Shack?

Danny Meyer 26:41 I, I think essentiality looks the same way whether you're talking about your favorite music or the favorite boss you've ever had, or your favorite city, your favorite aunt or uncle. It's, it's something that means that the fact that it existed in the first place made your life better. Like, the song makes you so happy every time you hear it that you can't imagine if the songwriter had never been born. And what I came to learn over the course of four years of writing this book was that... And this, this came to me basically with, with one example. I, the first time I closed a restaurant was Tabla, which at that point was almost 13 years old. It was an Indian restaurant in New York City. And I felt a sense of shame, I felt, uh, for laying off 140 people. I felt a sense of shame for, um, losing a chef, Floyd Cardoz, uh, who would, who would put everything he had into it. And I thought that immortality in restaurants... Or actually, what the late Joe Baum used to say was, "The definition of a classic restaurant is one that outsurvives its first lease."

Kara Swisher 27:47 [laughs]

Danny Meyer 27:48 And so I felt, I felt like, well, we s- sure certainly hadn't done that, 'cause we had a 20-year lease. And over the course of the three years of writing this book, three and a half years, that sense of, of feeling like a failure actually evolved into understanding that immortality's not the issue. None of us is immortal. Restaurants are not immortal. But essentiality was the issue, is did you create something that actually made a difference in the lives of the people who would work there, dine there, the community? And I came to learn, um, just by getting letters from people over the years, that they really, really missed Tabla. I don't know where they all were when we needed them, but, um-

Kara Swisher 28:31 Yeah. Yeah

Danny Meyer 28:32 ... but, but the, the fact-

Kara Swisher 28:33 That always happens

Danny Meyer 28:33 ... the fact is that that is the goal. I, when I wrote Setting the Table 20 years ago, I thought that hospitality was the goal. And now I understand hospitality is a means towards something much more important, which is essentiality. We have not always hit it. We've had restaurants that have closed that, you know, nobody missed when it closed. Not 'cause we didn't try, but when you, when you have one, um, and I think, you know, by the way, Mary Sue and Susan have totally created those kind of restaurants that made my life better because they existed.

Kara Swisher 29:09 Mm-hmm.

Danny Meyer 29:09 And that's a... We can all do that in whatever-

Kara Swisher 29:12 Yeah, it's a little like a show

Danny Meyer 29:13 ... listen, Kara, I, I, I'm not t- I'm not trying to kiss up to you, 'cause no one gets to do that.

Kara Swisher 29:17 [laughs]

Danny Meyer 29:18 But I would really miss it if your podcasts did not exist.

Kara Swisher 29:22 Well, someday they-

Speaker 29:23 Amen

Danny Meyer 29:23 And they make my life more interesting.

Kara Swisher 29:24 Someday they shall. [laughs] Someday. No, I'm, uh, I, I know what you mean. It's, it's more ephem- uh, making it, it's an ephemeral thing because it's like a show. Like, it's like my code conference, which doesn't exist, and I'm hap- happy that it did, and I think it had a big impact, and then I was glad that it was not, in a weird way. But Susan, your Palm Springs restaurant, Alice B., inspired by Alice B. Toklas and Gertrude Stein, in fact closed its doors last fall, and it did mean a lot to community, like Danny was just talking about. Just g- going by the comments on your Instagram posts announcing the news. So talk about this idea of essentiality, connect to your work in a place like Alice B., and how do you know you've built a restaurant that's not just successful, uh, that's become not just successful, but essential, uh, to the community? And then when it has to close, w- what does that mean for you?

Susan Feniger 30:12 Well, there's a, a... It's interesting, 'cause there is a great quote that Wolf had in, uh, the film, in Fork, the film that got done of, about me. But just a great quote was Wolf said, you know, "If you never open a restaurant-" You don't have to worry about closing. So, you know, I think that was-- that's really important, which is that, you know, the hardest part of closing is, I think, like Danny said in the beginning, when we first closed City, back, I think it was after, like, 14 years, it was just, it was heartbreaking, and, and, and embarrassing, and, like, how come we couldn't succeed? And we've closed many restaurants over the 45 years, 46 years. But I think it's, you know, like with Alice B, you know, I was-- It's the first time in so many years since City days that we weren't doing Mexican, and we ended up getting a Michelin mention, which we've never gotten [chuckles] after all these years, and I was really proud of this connection. It, it's, it was in a concept, a high-end apartment complex out in Palm Springs for the LGBTQ community, um, 55 and over, and it brought such community together that I was-- It, everything about it was so heartwarming. I loved the food we were doing. I loved the service that it was providing, that when you would see people, and obviously, it was way more than just the community that came, but it felt like people were so passionate about what we were doing and about the concept of being part of a community. And, and I was so proud and excited about the food, but it just couldn't be supported by, to make it financially viable. After a few years, it was just like, it's just, it isn't viable given everything that was going on, you know, with Trump, everything that was going on with people not, you know, the Canadians not coming back to Palm Springs, with people not going out as much, with the seasonality of it. I mean, some people can make it out there. We just couldn't. We were off the beaten track, which I love because we were in the neighborhood, and so you felt like you were supporting the neighborhood. But, so that was really a-- I think that was a very sad closure for me. Not because-- I mean, it was interesting. We got the Michelin mention, and, you know, six months later, we closed. But I think it's, you know, at some point, these decisions, they have to become business decisions.

Kara Swisher 32:53 Right. Right.

Susan Feniger 32:54 Even though I really do feel like we, I, we've gotten so many texts and so many people following up on Instagram of just saying how sad they were that we left, that we left the community. And I think that, for me, cer-certainly because I come from the community, that just felt like such a letdown because to see the people and how they came together, creating a space that was safe and doing, you know, I think what was really great food, that, the whole-

Kara Swisher 33:23 It should've worked

Susan Feniger 33:24 ... you know, it just was big.

Kara Swisher 33:26 Yeah. Right.

Susan Feniger 33:26 And certainly essential for many reasons.

Kara Swisher 33:29 Yeah. So E-E-Elazar, let me, let me ask you specifically. You wrote about the closing of Little Deb's Oasis in Hudson.

Kara Swisher 33:35 A-a-and then I'd like to juxtapose it in the second part. In a 2023 piece for Bon Appétit about the San Francisco restaurant culture, you observed a lot of bland sameness among restaurants at the time, with chefs and owners investing in successful concepts that weren't innovative. So th-that's the, that's where some of it is going, which is sort of like, I, I, I'm thinking of hotels have been on that a lot. Hotels used to be interesting, and now, I mean, I, I always call Four Seasons a Holiday Inn for rich people, essentially. Um, but there's-

Elazar Sontag 34:05 There's a ring to it. [laughs]

Kara Swisher 34:06 Yeah. Thank you. But talk about that idea, Little Deb's versus what you had written a-in Bon Appétit, this sameness that-

Elazar Sontag 34:13 Yeah

Kara Swisher 34:13 ... then infects.

Elazar Sontag 34:15 Well, I mean, I'm, like, you know, the three of you talking about this idea of essentiality, um, which I find such a perfect concept and such a hard word to say.

Kara Swisher 34:25 Mm-hmm.

Elazar Sontag 34:25 Um, but I, I think it really captures something sort of critical about the way that diners are relating to their favorite restaurant. So that recent piece I wrote about Little Deb's, it's a restaurant in, in New York's Hudson Valley, and Susan, it sort of, it, it, it is in a similar vein, a restaurant that just is so important to the queer community, and, and ex- and extends beyond. It's important to a lot of people who just live in the region for a lot of different reasons. It sort of came to define a certain way of cooking and a certain kind of design in restaurants. But for me, it was just the restaurant that I-- that happened to open the year I went to college when I was coming out, and I wasn't feeling great about my life. I wasn't feeling great about myself, and here was this restaurant that was just beyond vibrant, beyond open, beyond welcoming. And so I, I, I didn't write a reported story about its closing. I wrote a personal essay. And, you know, it was the first time, I, I was gonna say in a long time, but really maybe ever, that, like, I was so devastated by the closing that I actually put off writing the story until the day it was due, um, because I just couldn't believe that it wasn't gonna be open for me anymore.

Kara Swisher 35:52 Right.

Elazar Sontag 35:53 And it actually, like, makes me emotional talking about it now. And I think, you know, I've been writing about restaurants for a long time now, and I, there was still something sort of profound about that realization. Like, I was shocked that it was like a, it was like a relative had died. And I think in that idea of, like, essentiality is how much of ourselves we sort of leave in our favorite restaurants. But that's also part of what makes them essential, right, is their impermanence. And so writing about it was honestly more than anything, like, I think some people, they resonated, you know, with the piece, and it made them feel good too. But mostly, I was just so damn relieved to get it out of my system 'cause I was so heartbroken. Um- The flip side of that is the sameness. Um, you know, I, I will say, first of all, in, in San Francisco's credit, I know the San Francisco bashing goes on and on, and, you know, in ways I've, I've taken part, but, you know, that's the area I'm from, and, and I-

Susan Feniger 36:49 Yeah

Elazar Sontag 36:49 ... wrote about it with sort of-

Susan Feniger 36:50 Well, that's 'cause we're so good. You know. Go ahead.

Elazar Sontag 36:52 Exactly. Um, and I think San Francisco actually has kind of moved out of the sameness a little bit. I, the, the food scene is, is I think a lot better than it was sort of right out of the pandemic. But yeah, I mean, you know, a lot of chefs are doing the thing that feels safe. Um, and safe for a chef isn't necessarily the same as making a space that's gonna feel safe and comforting for diners. It, it might feel sort of familiar in the way that a chain restaurant does, but, you know, I think that gets to sort, sort of some of the core disconnect between, like, what diners expect from our restaurants. We want them to be eccentric and surprising and have a point of view and sort of shock the senses, but, you know, then maybe those are restaurants we only go to once a month 'cause they're kind of exhausting. But I think that that's part of this too, is, like, chefs are investing in easy concepts where there's real estate development money, you know, which is hotels and, um, I mean, honestly, a restaurant in a, in the lobby of... or in a building is... Yours was the outlier. Like, often those are not daring concepts, but so they still exist. Like, there are ways to move through that world and have the financial backing and, and still create a restaurant with meaning.

Susan Feniger 38:05 Why don't each of you, uh, uh, first Danny and then Susan, talk about this, this idea of between

Susan Feniger 38:10 being innovative and interesting, and quirky was a word that, uh, Elazar used, and, and the, and the, and the pressures to be same.

Danny Meyer 38:19 I, I have some pretty strong feelings about this. I, I don't think being the same is being the same. Um, I'm, I'm gonna go back. Uh, James Beard, who I think I met once before he died, would famously be identified wherever he went. You know, big, tall, bald guy with a big bow tie. People would come up to him in airports, everywhere. "Where should I eat? What, where should I eat in this town? What's, what's your favorite restaurant?" And he would say, "My favorite restaurant is the same as yours. It's the one that loves me the most." And it's kind of hard to argue that point. And so I think about a city like Rome, which has taught me so much, and if there's 2,000 trattorias in Rome, there's probably an 85% intersection between every single menu item on every single one of those trattoria menus. And Rome is a city that, um, doesn't exist to shock you. It exists to take basically a canon of 20 dishes and give different chefs, sometimes it's the papa, sometimes it's the mama, an opportunity to say, "This is what I think carbonara should be. This is what I think cacio e pepe should be." But, and more important than that, is this is, this is your restaurant. I'm doing this restaurant for you in this neighborhood, in this community. And, you know, I'm not a San Francisco basher. I, I think it's great. I've been there three times in the last month. It's great that there's a lot of innovation happening, and I love going back to places like Zuni and Cotogna where, or, or the Cafe Chez Panisse, where I know this feels like San Francisco. And I think that sometimes we innovate at the expense of being good, and, and I, I, I'm okay with that.

Susan Feniger 40:07 I think my philosophy has always been, like, I wanna do the food that I love, that I'm drawn to. So I mean, it's not that I ignore what I think the customer wants, but I feel like I'm drawn, I've always been drawn to street food. You know, back, I took my first trip to India in 1982, eating street food. And in Vietnam and China when I, when, you know, when I opened Street, which only lasted, like, six years, I just, I thought the food was amazing. But there were all these different dishes that I, that I think even then was very eclectic because we were doing street food from around the world. Even with Border Grill, when we opened Border Grill, Mary Sue and I drove all through, ate street food all over Mexico back in the early '80s. I, I, I'm drawn to authentic street food from everywhere. And so when we create a menu, we create thinking like, "This is the most interesting dish to fill out this section of the menu." And I mean, we, we used to not even make the wording accessible. Then we sort of shifted that to try to make the wording, you know, more accessible to the people, so it wasn't pupusas, it was like hot, what is a pupusa? So that people could understand it. But so, you know, and maybe that's why we've closed restaurants [chuckles] over the years, but I really do feel like for me, it's about the food that I'm passionate about and how to do it well and how to respect the community that we're d- doing it from. And not putting chicken breast on the menu because I never eat chicken breast 'cause I eat leg and thigh. So we just don't, we don't, we don't sort of shift it that way. We try to make it-

Elazar Sontag 41:52 You're not thinking-

Susan Feniger 41:52 ... a dish that people will love.

Elazar Sontag 41:55 Yeah. Mm-hmm.

Susan Feniger 41:55 That they'll try the first time, that they'll love it, and try to get them there, get them educated about it and excited about it.

Elazar Sontag 42:02 Right. Right. I think that there's sort of a distinction, and I don't know that I'm particularly good at making it, maybe even in, in my own mind, but you know, Danny, like the restaurants in San Francisco especially that you mention, to me feel like they don't represent sort of that sameness at all. You know, like Zuni has so much intent, and it is just chicken. I mean, it is. It's, it's, it's chicken. It's chicken-

Susan Feniger 42:26 Chicken

Elazar Sontag 42:26 ... and martinis and really great fries.

Susan Feniger 42:28 Mm-hmm.

Elazar Sontag 42:28 But it, there isn't another Zuni. It, it's not the sameness. And-

Susan Feniger 42:33 Right

Elazar Sontag 42:33 ... I mean, a Chez Panisse cafe, it's, it's singular, and there's one million restaurants just like it, but there aren't. And I, I think that the thing It, it's hard to talk about maybe 'cause it's sort of ephemeral or, or nebulous, but it's like, it's the intent. And I think what you say, I love so much, the idea that it's like a restaurant that sort of loves you back. And I do think there are restaurants where that's not the case, where someone asked someone else, "What is the restaurant that's gonna be the most successful in this neighborhood?" "Oh, it's a steakhouse?" "Okay, we'll open a steakhouse." But I think that's very different from a restaurant, you know, Susan, like you're describing, that just serves the food that the chef wants to serve, which I think there's no sameness there. You know, that's someone's fingerprint. So it's, it's a weird distinction, but I think there's something in there of restaurants that have a soul and a heartbeat, and then restaurants that, you know, just have line items.

Kara Swisher 43:30 Or have a stunt.

Susan Feniger 43:31 I was just gonna say like, with, with Border Grill, I think we just try to do-- It's not like are we trying to be ex- innovative or like use achiote in a dish that makes no sense. I think we really try to think about what is, what was done for the last, you know, hundreds of years. How do we do it and improve upon it and just make it be wonderfully authentic, but taste really delicious? So it's not so much about how new or creative can we be as, but how can we do the same thing, but do it with the proper cooking techniques and make it really, really special and delicious, even if it's an enchilada. How do you do that? How do you make the homemade flour tortilla really yummy, or corn tortilla,

Susan Feniger 44:15 or whatever you're doing? I get the point. So every episode, we get a question from an outside expert. This is gonna shift the conversation, but here's yours.

Speaker 44:23 Hi, Kara. I have a question. What can restaurants that are concerned with hospitality do about a table of diners that are really rowdy and disturbing other guests? I have no idea what the answer is. Maybe one of your guests does.

Elazar Sontag 44:38 Oh my God, that's a great scarf.

Kara Swisher 44:39 I know, I know. [laughs] That's a great scarf, yeah. Um, uh, y- it's a total left turn, but it's the idea of what an experience is, 'cause a lot of times, diners are, have gotten very, I would say, indulgent of themselves, I've noticed in restaurants, much more so. The behavior of, of people in restaurants has changed rather dramatically. I'd love each of you to address it. Susan, what do you think, and, and Danny, and then Elazar?

Susan Feniger 45:02 Well, I mean, you know, I want people to come into the restaurant and have a great time, so there's no question about it. If, if a table gets too rowdy, where it's just like a little bit out of control, I mean, I think the way to do it is, I mean, often, if I'm there, I would go to the table and be really sweet and just say, "Can," you know, "Can you guys," assuming it's guys. May not be. [laughs]

Kara Swisher 45:23 Let's assume.

Susan Feniger 45:24 Yeah.

Elazar Sontag 45:24 It's a good assumption, Susan.

Kara Swisher 45:26 Good assumption.

Susan Feniger 45:26 And just try to say, "Can you guys just little bit, just keep it down a little bit? Try not to be so complete," like these guys are blah, blah, blah. I mean, I would just try to do it sweetly, or I would try to make sure our manager would take the same approach, and try to gently get them to lower their level. I mean, I never wanna stop someone from having a great time, 'cause that's what it's about. But I would try to respect the people that are having a quiet conversation, or people come in and they'll say it's too noisy. And on the other hand, if they come in and the restaurant's too quiet, then they think it's not successful. So it's a fine line between how to balance what the customer thinks they want and what they, you know, what their perception is of the restaurant.

Kara Swisher 46:07 Da- Danny?

Danny Meyer 46:08 Yeah, I don't, I don't think I disagree with anything. And, um, you know, I remember when we eliminated smoking from our restaurants in 1990. Uh, back then it was only one restaurant, Union Square Cafe. A big part of it was that every single night I was, you know, kind of mediating an argument between the last row in non-smoking and the first row in smoking.

Susan Feniger 46:29 Yeah. [laughs]

Danny Meyer 46:30 Can-- You can't even remember, but it was just awful.

Susan Feniger 46:33 I can remember.

Danny Meyer 46:33 And so noise in your face is like smoke in your face. It's like, here's another one. S- you know, someone wears this just disgusting cologne bathed all over their body, and now the whole restaurant has to smell that when they've just ordered a nice bottle of wine, and they can't even taste their wine. So there's been many, many times through the years when we've either had to move tables. Um, the, the, the one thing we won't put up with is if, if a table is harassing someone who works for us. And we've asked people to leave the restaurant. It's not fun. We're in the business of hospitality. We're in the business of making you wanna leave happier than you came, and then, you know, firing a guest is absolutely not something we want. But if it's a, if it's a baby who's crying, um, we've offered to hold the baby. Um, we've offered to take the baby somewhere else, and they usually get the message very quickly, and, "Oh, oh, I didn't, I didn't realize we were annoying everybody else who's paying for their meal." We serve alcohol, so obviously there are tables who don't handle their alcohol well, and if there's six guys at a table, that can get really loud and messy, and sometimes we just have to stop and cut them off. I mean, I once got into a fistfight in the very first year I opened Union Square Cafe with someone who was drunk and parading around the dining room with his tie tied around his head, complaining that we didn't serve baked potatoes. Um-

Kara Swisher 47:55 Oh.

Danny Meyer 47:55 That's not-

Elazar Sontag 47:55 Classy.

Kara Swisher 47:56 Classy.

Danny Meyer 47:57 Not really what I, uh, have built my career on, that kind of thing, but-

Kara Swisher 48:00 [laughs] Yeah

Danny Meyer 48:01 ... we went chest to chest, me and that guy-

Kara Swisher 48:03 Oh

Danny Meyer 48:03 ... out the door before he finally slammed my door, my head between the doorjamb and, and the outside.

Kara Swisher 48:09 What?

Danny Meyer 48:10 Um, some-

Kara Swisher 48:10 Over a potato?

Danny Meyer 48:11 Well, well-

Kara Swisher 48:12 Wow

Danny Meyer 48:12 ... I think, no, over drinking too much alcohol.

Susan Feniger 48:15 Thank God it wasn't about a potato.

Kara Swisher 48:15 Yeah, yeah. Wasn't about a potato. Elazar?

Elazar Sontag 48:17 You know, one of the things I, I do is I have this weekly chat with Washington Post subscribers. Every, every Wednesday at 11 o'clock, you know, I, I field questions, and dozens and dozens of them about largely, like, restaurant etiquette. And they're often these sorts of questions. And I think the, the easiest answer, maybe, like, the truest answer is usually, you know, tell them that they have to change their behavior. Like, I, I do think that's completely appropriate to go tell a table that they need to be quieter or- That maybe they're not noticing their baby is really, really loud, and there are, you know, dates around them, or that they need to leave. Like, the restaurant is in control. I think the thing that gets much more complicated with specifics is that often those scenarios are really uncomfortable, and it needs to be a pretty well-staffed restaurant with a really good support system for a manager, I think, to feel enabled to go do that, 'cause it's scary, and it's nerve-wracking. And so, you know, I'll often say, "Yeah," like, "You should've, you know, you should've kicked them out," or, "You should've told them they had to stop doing," you know, whatever, insert the blank. But I think that then the actual doing of it requires a team that's pretty seasoned and, and quite confident. And so, you know, it's like it's one more thing restaurants have to think about. And, um, often my answers end up being sort of like, as an, as another diner, if you're frustrated in the dining room, like, probably you're gonna have to grit your teeth.

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Kara Swisher 52:25 Danny had talked in his book about enlightened hospitality which prioritizes employees, by the way, where, where they are part of the important part. Um, I'm gonna talk a little bit more about the, um, the, the, the i- the big issues going on, the economy, obviously food insecurity as we talked, immigration and workers. Now, a Gallup poll found that a percentage of US adults eating out at least weekly has fallen 39%, down from 53% in 2019. Uh, and again, this comes as many Americans are struggling to afford basic necessities. Um, a- a- and more broadly, there's ripple effects of rising rent, labor costs, and food costs. Uh, immigrant labor, labor has been essential to restaurants and our food supply chain from farms to processing to distribution and the restaurants themselves, and the Trump administration immigration crackdown has led to labor shortages in restaurants across the country. I'd love you each to address this because the, the economics of it a- are stuff that are e- e- essentially external in many ways. Susan, starting with you, um, and then Danny, and then Elazar. What-- How have-- How's the labor issue been since, you know, you all prioritize the people who work there? Susan, why don't you start?

Elazar Sontag 53:36 Yeah. I mean, I think, yes, there's seems to be way fewer people going out. I think when you look, I think in LA, I looked, last time I looked, sales were down, like, 25%. And labor shortage is for sure happening out there. And part of it, I think, I mean, part of it I do think came from during COVID. People had to go out, and I think many restaurant workers ended up in the construction world, where they made more money and probably never came back. That, along with the fear in the last, you know, year or so of ICE has caused labor shortage. We lost a number of employees who decided it wasn't worth the risk to stay here in LA. I th- fif- probably close to 50% of the people who work for us, if not more, but I think across the country, are immigrants. And so that affected labor shortage, so labor costs went up dramatically. A- and I think as I mentioned earlier, food costs has gone up dramatically, and rents have gone up. So all of a sudden, you've got less sales

Susan Feniger 54:52 You know, higher costs. So the ability to sort of break even, which is why so many restaurants have closed, is because you can't maintain there. So

Kara Swisher 55:02 Is there a solution to that from your perspective, given-- I mean, obviously, Trump is not-- is still continuing with the ICE, maybe less, less, less aggressively, as you noted.

Susan Feniger 55:13 And tariffs.

Kara Swisher 55:14 Yeah, and tariffs, of course.

Susan Feniger 55:14 Tariffs have been a-- had a huge effect. I mean, I think that is really what we're trying to figure out. I think the industry is trying to figure out, how do you... Is it quick casual restaurants, so it's less labor? You know. Is it, um-- Which isn't necessarily good for the labor market, but it's causing that. Um, is it causing, you know, going away from higher-cost food items? When you look at, like, the cost of beef, you know, just sort of how do you sort of shift so you can bring your food costs back in line and labor costs back in line? So I think-- I don't know if there-- I mean, eventually, I'm assuming things will come back, but I think diversification is something we have looked at. But even that's challenging because it's a whole nother business. So, so I think we're all struggling to try to figure out what's the answer there. And so the challenge is, like, how do we shift to a new norm? Because I think there is a new norm out there.

Danny Meyer 56:13 I agree a hundred percent with what Susan just said. Uh, look, immi-immigration is where I would start because immigrants, both in terms of the people opening restaurants and the people working in restaurants, have been the backbone of our industry, and the uncertainty, uh, as to how to go forward with that. I, I know friends who-- in Minneapolis in the restaurant business who actually had ICE agents looking into the windows of their kitchens during service, and they had to pull the shades down in order to just operate their restaurants. And, and all they're trying to do is hire people and serve people in that community, and it, it just doesn't work. And as Susan just said, the uncertainty of not knowing how much we're gonna have to pay for goods tomorrow. We don't happen to make olive oil in New York State. We don't happen to grow coffee beans in New York State. We don't make s- you know, Brunello di Montalcino in New York State. So I'm only bringing those things up. They may sound like luxuries to the average person, but we're in a business with already slim margins, and we're trying to proffer experiences that make people feel better, that employ people. And so I think that the more uncertainty that government can take out, the better. Now, just getting back to something that came up earlier,

Danny Meyer 57:37 um, it's the tipping situation in this country is broken. I tried to address it-

Kara Swisher 57:44 Yeah

Danny Meyer 57:44 ...for five years-

Kara Swisher 57:44 You did

Danny Meyer 57:44 ...starting in twenty fifteen.

Kara Swisher 57:45 Let me just say, can I just note, you eliminated tipping at your restaurants in two thousand and fifteen, arguing it contributes to unequal pay and wage instability. You reversed the policy in twenty twenty during the pandemic, and you've said the Trump administration's no tax on tips is a misbegotten policy because it widens the gap between tipped and non-tipped employees. So I just want people to understand what you were coming-

Danny Meyer 58:05 Yeah, and a big part-- Thank you. A big part of the reason that, that I did it is that tipped employees, um, make more money every time menu prices go up, which is the only way I've ever seen it happen in my entire career, because a tip is a multiplier of that. And we're really, really happy because we think restaurant workers should be paid more money. The problem is that in many states, certainly New York State, it's different in California, which is more progressive. But in New York State, it's not legal for tips to be shared with cooks. Um, and therefore, the, the, the cook wages stay relatively stagnant through all these years.

Kara Swisher 58:44 Right. Right.

Danny Meyer 58:45 And so-

Kara Swisher 58:45 Right

Danny Meyer 58:45 ...that, that just doesn't really work whatsoever.

Kara Swisher 58:48 When it w-- I was just in Michigan. My son is a cook, uh, in at Boulevard in San Francisco, and, uh, he's working his way up to the hotline, I guess. I don't know what that means. Um, but we were in a restaurant in Michigan, where my other son is in school, and there was a thing where you could add ten percent for the kitchen, and, uh, which was really interesting. I had never seen it. It was a steak place, the place, the steak place that's famous there, Knights or something like that. And, um, my son, of course, did it four times. I was, I was like, "Wait, why is this costing me so much?" Which I loved because he's like that, and he goes, "The people in the kitchen don't get the same amount of money." It-- Right. And he was like... And then I got a lecture about that.

Danny Meyer 59:25 I just want to say, when, when we did bring back tipping-

Kara Swisher 59:28 Mm-hmm

Danny Meyer 59:28 ...in twenty twenty-

Kara Swisher 59:29 Mm-hmm

Danny Meyer 59:29 ...when the government finally allowed us to open our restaurants, we instituted for the first time a revenue share for our cooks, and, and so our cooks really appreciate that. The, the problem is, is that it shouldn't be our-- I think the government should make it possible for tips to be sh- And I think in California, it is legal to have those shared.

Kara Swisher 59:50 Yeah. That was-- I'd never seen that before. Uh, Elazar?

Elazar Sontag 59:54 Yeah. Before I answer, I just wanna say, while I've got Danny on the line, that I, I do bring up your tipping policies and the lack thereof, and then bringing it back often when I'm trying to help diners understand why they need to understand how restaurants work, even if they sort of feel like they shouldn't have to. Because, you know, when there are-- when I get questions about, "Well, why do I have to, you know, why do I have to tip?" And I think it really is important for people to understand that, you know, there was or there could be a world in which that was part of the cost of dinner, and for reasons both, both on the industry side and the appetite of diners to pay that extra twenty percent, you know, in the line item, it hasn't worked that well. Um, and so I always just sort of tell people it's not a great system, but it's the one we've got. Um, and in terms of what I'm seeing in relation to labor, I would say ever since COVID, I have Been writing about many more restaurants that feel like nice, somewhat upscale, kind of chef-driven restaurants, but operate like counter service casual restaurants. And I-- that's largely a labor issue, um, or, or a labor consideration, whether or not it's an issue. I like a lot of these restaurants a lot, you know, that are, um, getting rid of table service, that are cutting back on their number of servers and doing that by having you order at the counter before you sit. And this is happening in Austin, it's happening in upstate New York, it's happening here in DC, and, and that is really largely... You know, I think there's some philosophical things in there, too, of chefs reimagining after COVID the kinds of restaurants they, they want to run and the level of formality. But a lot of that is just, you know, I think doing the math and saying to themselves, "Okay, if I cut two or three people off of payroll, can I afford, you know, X thing that I couldn't afford before? Can I make my business a little more sustainable?" Or, you know, some of these chefs also are asking, "Can I use that money to, to better pay, uh, my, my existing staff to give them healthcare?" You know, like, um, Rye Bunny in DC is doing a really interesting job of this. So, you know, chefs are ever creative, restaurateurs are ever creative, and they're finding some, they're finding some good answers to, I think, just a crummy question.

Kara Swisher 1:02:25 So I'm gonna end, um, talking just about, very quickly, a more strange social media tech

Kara Swisher 1:02:30 and AI question, 'cause it is in the industry, it's happening. Um, Susan, I'm gonna start with you. I think, uh, you, you're a food media pro, but you and Mary Sue cooked with Julia Child and starred in "Two Hot Tamales" on the Food Network in the 1990s. You also competed on "Top Chef Masters," and now y- again, you're cooking on Instagram and TikTok. I really enjoy, uh, what you're doing there. Um, how do you look at it?

Susan Feniger 1:02:52 Well, you know, there's many things about the way so, the way getting to the public has shifted, which I think is incredible. I mean, I think being able to do social media, Instagram, YouTube, we're just launching a YouTube channel, you know, all that I think is really wonderful because it gives people the ability to get out there in front of the public if that's what they want to do in order to grow their business. I mean, for me, I think I do it in order to grow our business. It's, you know, it's, it's a, you know, it's work, it's a responsibility. I do it for fun, and, you know, often my wife is like, "Oh my God, I can't believe you posted that. You didn't even look at it. You didn't see, like, how bad you look. You didn't..." But I think-

Kara Swisher 1:03:37 I think that's the charm of it, honestly.

Susan Feniger 1:03:38 [laughs] Thank you. But, you know, I think it's just, it's important because it keeps you out there. And there's no question, it is, for me, it's work. I mean, if I'm cooking dinner at home, I have to, okay, put that on. I don't worry about it very much. It sort of is what it is, and that's what I do. If I'm doing actually filming, you know, and doing it with someone to film for YouTube, you know, it takes time. You have to set up. So it's actually like my work day. But I think it's critical in these days to be able to help and grow your business, and, and I love it because it gives you a voice out there to talk about things that are important to you and why, you know, people that don't use leftovers, use them. And it's crazy waste. There's too many people starving. Don't waste food. So it gives you a voice.

Kara Swisher 1:04:29 A- and Danny, how do you-- It's impossible, again, to ignore tech in restaurants, QR codes, touch screen ordering, weird AI slop ads, marketing photos. How do you think about using things like AI or what Susan is doing for yourself and your restaurants?

Danny Meyer 1:04:42 Well, I've never had a TV show like Susan has had, but, um, technology for us is-- I've, I've always looked at tech in restaurants as a way to advance touch. So if we can take the friction out of, out of the hospitality industry and actually add humanity to it through, through tech, we do that. So AI, um, yeah, I'm, I have no idea if the doomsayers are right, and I'm just not even thinking about that. What I'm thinking about is that we have a concept we call ABCD, so you can ABCD, always be collecting dots, so you can always be connecting dots. And the dots are pieces of information about people so that we can customize experiences, which is what I think hospitality is. And we have never had a greater dot-collecting agency than AI. It's, it's almost malpractice to not know who you're serving in the restaurant. Everybody has preferences. It, you know, hospitality is not one size fits all. That's what service is. Hospitality is customizing it. So I love it. I also love the degree to which we can use it in the back of the house to take administrative tasks that are really boring, that actually keep our managers off the floor instead of greeting guests. That's another way that we really like to use it.

Kara Swisher 1:05:57 Mm-hmm. You use it in both those ways. I would agree with you about, uh, it knowing customers, including in regular retail. Now, Elazar, I think your biggest, uh, story that got tons

Kara Swisher 1:06:06 of social media attention was this $60 loaf of rye bread that's being sold in this bakery. I read the hell out of that story. I want you to talk about putting that story out, because it really did for s- it got people talking. But talk very quickly about why, how you thought about writing that story and what it meant, 'cause it got enormous social media attention.

Elazar Sontag 1:06:25 Well, thanks for reading. Um, y- you know, that was a story that had already lived sort of a full cycle of internet virality by the time I got to it. Um, and so when I went to New York, ate the bread, was trying to form sort of some thoughts about it, I mostly was just thinking about how to write a story that maybe was less about the economics of actually producing the loaf of bread, which no, of course, does not actually cost $60 for them to produce, um, and more about sort of what it said about- New York, um, what it said about sort of consumers and just who, who we are right now. Um, and you know, it's, it's like 800 words. It's not profound story, but I had a sense that if it was just another sort of outrage story about, you know, essentially like, is the bread good or bad, um, it probably wouldn't have very much reach. Um, that that story had just been told, and I was already seeing it on my feeds. And so I, I just was sort of asking myself, "Well, how do you keep the conversation going one more day?" Um, and, you know, kept it going one more day.

Kara Swisher 1:07:37 Mm-hmm. And the bread was good?

Elazar Sontag 1:07:39 And the bread was really good. I mean, it, I-- it's a huge loaf of bread. I ate it for like a week and a half.

Kara Swisher 1:07:43 All right, my last question for all of you, and I really appreciate you being so thoughtful in this whole thing, is the restaurant business that we've talked about is a lot harder than it used to be. But chefs and restaurateurs have to continue to be scrappy and creative 'cause in, uh, food is a creative business of all things. Um, I'd love each of you to talk about who you

Kara Swisher 1:08:00 think, uh, who are succeeding despite the challenges in finding success. What is something you've seen recently that you think, "Wow, that was super interesting"? I'd like to leave it on a positive note. Like, what are you, what are you sort of heartened by? Um, Susan, you are first.

Susan Feniger 1:08:15 I am sort of amazed when I go to a restaurant, which I honestly can say I don't go to very much anymore because I, you know, for the first time in all my life, I'm actually cooking more at home than I have for years. But, um, you know, there are restaurants that, that I feel like are still doing amazing business, like, you know, in downtown L.A., like Auré Manèche, Babel, and Bestia. I think they're amazing, and they're busy. And Saffy's is, you know, there. And there's-- And so I think-- [sighs] I don't, you know, it's hard for me to say, have they changed anything? You know, I th- you know, I don't really have a very good answer for that.

Kara Swisher 1:09:06 That's okay.

Susan Feniger 1:09:06 Like, what's, you know, what is the formula now for having a successful restaurant? I mean, I do see, um, that, like in Vegas, we saw sort of a down, you know, a t- a downturn in business. We're seeing it come back up again now. Um, I think part of it is the community that is slowly coming back. What are they looking for? I think price is an important part of it. I mean, I think that's the dilemma for the restaurant business right now. What is it?

Kara Swisher 1:09:39 Uh, Elazar?

Elazar Sontag 1:09:41 I mentioned it a little earlier, but Rye Bunny here in D.C. is the restaurant that most comes to mind as kind of like embracing this central tension of how do you run a restaurant in 2026. Um, they closed their Michelin-starred restaurant that had been in that same space for, uh, 10 years and, you know, gave up their star and gave up everything attached to that restaurant and refashioned it as a more casual counter-ordering restaurant where you then sit down, and there's full-touch table service. And so it is just, frankly, a very weird model, and there are no reservations. So what it means is that dinner starts by waiting in a very long line because everyone to get a table lines up to order, and the only way to order is to wait behind the person who's ordering in front of you. And so there are elements of it that sound really kind of unpleasant or almost antagonistic, but it is really, really like a loving, friendly, warm environment. And, you know, not everything about it works perfectly for me, but I'm really encouraged to see chefs and restaurateurs-

Kara Swisher 1:10:58 Trying new things

Elazar Sontag 1:10:58 ... grappling and for it to really be, like, working.

Kara Swisher 1:11:02 Mm-hmm. All right. Uh, Danny?

Danny Meyer 1:11:05 Well, one of the most fun parts of being on my book tour has been going to about 20 cities and, and-

Kara Swisher 1:11:12 Restaurants

Danny Meyer 1:11:12 ... never missing an opportunity to try a new restaurant while-

Kara Swisher 1:11:15 Yeah

Danny Meyer 1:11:15 ... I'm there and see what's going on in different cities. And if I can say one through line is that it, it's not necessarily one restaurant, one restaurant model. The, the, the funny thing is, is that no one in our industry, uh, who, who opened a restaurant did it because they thought this was gonna be an easy way to make money. They did it because we don't have a choice. This is who we are. We wanna build a community, create a place. But what they all have in common, the ones that are working, are when the restaurant community in that town is supporting each other and when the chefs in that town are supporting each other. And I kinda wanna tie it back to, um, you know, the, the list of the 40 best restaurants in Washington, D.C. When you do that list, you're actually stitching together a community. You're not just ranking individual restaurants, and you're making Washington a destination for people who like restaurants. And I really think that rising tide is gonna lift all those boats. I've seen this in St. Louis. I've seen it in Denver. I saw it in Santa Barbara. It's called Little Mountain. They just got a great review in The New York Times. We wanna do something new, but the biggest thing we wanna do is to seed the chef community for tomorrow. And I just think-

Kara Swisher 1:12:28 Right

Danny Meyer 1:12:28 ... that, that's the new thing.

Kara Swisher 1:12:30 Right. That's excellent. Excellent.

Kara Swisher 1:12:32 I'm gonna end on one last thing. If you had to pick one new restaurant or something that just delighted you recently or one that you, is essential, I'll start. Anchor Bar in San Francisco. If it goes away, I will die. I will die. [chuckles] It's my favorite place to be on the Earth. It's in my neighborhood in the Castro. Fantastic oysters. Oh, cioppino, all kinds of things. It's, it n- it never change is what I have to say about it. Never, ever change 'cause I love it so much. Uh, you go, Elazar.

Elazar Sontag 1:12:59 Yellow in D.C., um, sort of continuing that feeling of, of truly casual restaurants. You know, this chef, Michael Rafidi, has some really expensive, very hard to get into restaurants. This is a counter-ordering falafel joint. Um, you know, pita and falafel and, and sort of grilled things, but he cooks all this fast casual food over wood and coal and, um, I just Lo- First of all, it's really, really delicious. But I love-

Kara Swisher 1:13:23 It is

Elazar Sontag 1:13:23 ... that someone is kind of trying to do something that is genuinely accessible, sort of on all of these different, you know-

Kara Swisher 1:13:32 Great choice

Elazar Sontag 1:13:32 ... in all of these ways.

Kara Swisher 1:13:33 All right, Danny?

Danny Meyer 1:13:35 If the River Cafe in London were to close, or I could never go back there, I would be very, very sad.

Kara Swisher 1:13:39 Ruthie Rogers, yeah. Yeah, amazing. That's an, it's a lovely restaurant. You're right. That's a fantastic-

Danny Meyer 1:13:44 I'm always happy when I'm there, and, you know-

Kara Swisher 1:13:45 What's your favorite thing about it? Just the mood, or?

Danny Meyer 1:13:48 The, the minute I walk in the door, I feel good. And I love, I love wh- what I call sprezzatura, which is it- the apparent effort that went into making such good food is not evident. In other words, they make it so you can just sit back and relax. They're not trying to have all the flourishes. They're just cooking good food. The s- they service the hospitality. They're smart. You know, you, you feel like your server is someone who you could hang out with-

Kara Swisher 1:14:18 It's a joyful restaurant

Danny Meyer 1:14:18 ... and learn from.

Kara Swisher 1:14:19 Yeah.

Danny Meyer 1:14:19 Yeah.

Kara Swisher 1:14:19 It's a joyful restaurant. All right, you finish up, Susan.

Susan Feniger 1:14:22 All right. Well, for me, it's so much about how the, the restaurant feels. So I've two favorite, opposite. One is back on the beach, where I can have my feet in the sand-

Kara Swisher 1:14:32 Mm-hmm

Susan Feniger 1:14:33 ... and have just a delicious avocado toast.

Kara Swisher 1:14:35 And where was that? That is, that's San F- L- Los Angeles.

Susan Feniger 1:14:38 In Los Angeles. And Vibrato, Herb Alpert's place, because m- my wife and I are both big music people. She was a singer-songwriter before a director, and they have the most amazing music. So one of my favorite things is to have a mezcal, and soda, and grapefruit juice, and a baked potato with everything on it.

Kara Swisher 1:15:00 The baked potato.

Susan Feniger 1:15:00 But the vibe is amazing.

Kara Swisher 1:15:01 Thank God that guy could find a baked potato. [laughs]

Danny Meyer 1:15:04 [laughs]

Susan Feniger 1:15:05 [laughs]

Kara Swisher 1:15:06 Anyway, I really appreciate it. This was a wonderful conversation, and you're all wonderful at everything you guys do, and I appreciate it. Thank you.

Elazar Sontag 1:15:14 Thank you.

Danny Meyer 1:15:14 Thanks, Kara.

Susan Feniger 1:15:15 Thank you so much.

Danny Meyer 1:15:15 Enjoyed it.

Kara Swisher 1:15:17 Today's show was produced by Vicky Vurgulina, Michelle Aloy, Katherine Milsop, Megan Bernie, and Madeline LaPlant-Dubé. Nishat Kurwa is Vox Media's executive producer of podcasts. Special thanks to Eamon Whalen, Jim Mackle, and Manolo Moreno. Our engineers are Fernando Arruda and Rick Quan, and our theme music is by Trackademics. If you're already following the show, you're practicing enlightened hospitality. If not, go and eat a baked potato. Go wherever you listen to podcasts, search for On with Kara Swisher, and hit follow. Thanks for listening to On with Kara Swisher from Podium Media, New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Monday with more. [upbeat music]