Yianni Dontas of Local 22 (Photo credit: Ira Wilder via UNC Media Hub)

Ira Wilder via UNC Media Hub

Yianni Dontas, the executive chef at Local 22 Kitchen and Bar, said his restaurant is not profitable during a given shift if it does not serve at least 150 people for lunch and 200 people for dinner.

“You’re just burning money if you’re open without customers there,” said Eric Ackerman, a territory manager at U.S. Foods and Dontas’ salesperson.

After Local 22 became dinner-only (except for a Saturday lunch) during the pandemic, the Erwin Square eatery resumed its ever-lucrative Sunday brunch in June and two not-so-lucrative Thursday and Friday lunch shifts in September. The restaurant averages 100 customers during these most recent midday additions, considerably short of Dontas’ 150-customer threshold.

Increasing operating hours is not the norm in the restaurant world right now. About two thirds of restaurants reduced their hours of operation in 2023, compared to almost half in 2022, according to data from the National Restaurant Association.

By adding these weekday lunch and weekend brunch hours, Local 22 is going against the grain, steadily increasing its hours and banking on Durham’s continued growth.

Dontas sees Local 22’s added hours as an investment. He and his team are building a lunch business they hope will soon benefit from Durham’s growing economy. The kitchen hopes to add two more lunch shifts on Tuesday and Wednesday, which would mark a complete return to the restaurant’s pre-pandemic hours.

“Local 22’s vibe has always been the local neighborhood gastropub — a place where you can have lunch on the patio at noon, stop in for a local beer at 2pm, or grab an early or late dinner,” said Ashley Brodie, director of marketing for Giorgios Hospitality Group, which operates Local 22, in a statement.

The restaurant has an eager but cautious appetite for growth. Though Local 22’s added lunch shifts are still not profitable, the restaurant is making record amounts of revenue. This discrepancy is caused by exorbitant costs of food, labor and utilities.

Restaurants have always had razor-thin profit margins. The typical restaurant banks 3% to 5% of its revenue. That means a $20 meal nets about 80 cents. So, a few empty tables can seriously harm a restaurant’s bottom line, Ackerman said.

Ackerman and Wilson said the cost of commercial food rose significantly last year. The cost of food away from home, which measures what consumers pay in a restaurant, has also increased. For the 12 months ending in January, the cost of food away from home rose by 5.1%, significantly outpacing overall inflation, which was at 3.1% for the same period, according to the Bureau of Labor Statistics.

So, while consumers are picking up more of the cost, restaurants have largely carried the burden, Wilson said.

Considering that and the local food service labor shortage, it’s easy to understand why restaurants are hesitant to open their doors more often. Adding back Thursday and Friday lunch shifts at Local 22 in September required hiring another manager, a bartender and two servers — a steep ask in an industry already strapped for workers.

“If I had two more people, that I’ve been looking for now for the past six months, then I could be free to open more,” Dontas said.

He’s not alone. The National Restaurant Association reported that nine in 10 restaurant operators said being understaffed posed a significant or moderate impact on their restaurant’s ability to grow in 2023.

“The restaurant industry is not something that people seem to want to work for anymore,” said Daryn Wilson, sous chef of Local 22. “A lot of that passion goes away because of the so-called ‘high demand’ of what restaurants are now.”

Restaurant workers are much more expensive than they used to be. Restaurants could pay a young line cook $12 an hour before the pandemic, and that’s simply not the case any more. Dontas said to stay competitive, that wage is up to about $19.

“Some of them are even older, and they are looking for like $25 or $30 an hour,” Wilson said. “And you’re like, ‘What planet are you living on?’”

This trend is felt nationally as well. The median weekly earnings of a full-time restaurant worker increased from $582 in 2020 to $701 in 2023, according to the Bureau of Labor Statistics.

Ackerman and Dontas said people knock on the door every Tuesday and Wednesday, asking them to open for lunch. In an hour, 13 people showed up to eat Wednesday lunch, even though Local 22 hasn’t offered it since before the pandemic. One of them was Meredith Nicholson, an attorney and a Local 22 regular who forgot to check the hours ahead of time.

“I’ve driven all the way here, and I’m hungry,” she said. “They have good food, and I’m ready to eat.”

The restaurant, which has been in the same location for 20 years, has a faithful customer base. Some regulars eat there three times a week, according to Dontas. The restaurant averages about 250 people per dinner and continues to thrive financially, Wilson said.

Dontas is waiting for the existing lunch shifts to break even before adding Tuesday and Wednesday midday shifts, but he remains steadfast in the necessity of the added hours.

“We’re looking ahead,” Dontas explained. “You have to lose some money in order to be ready.”

Each of Local 22’s expansions have come before particularly busy seasons.

“Local [22] re-opened for Sunday Brunch in the summer to work out the kinks before students returned to school in the fall,” Brodie said. “Similarly, reopening for lunch on Thursdays and Fridays, beginning in September, allowed Local [22] time to acclimate staff prior to entering into a busy winter season.”

The restaurant, which has a lot of outdoor seating, plans to see major growth as both temperatures rise and Durham’s population rises (from 753,500 in 2023 to 855,700 in 2028, according to the Commissioner of Planning and Economic Development). “We want to be ready,” Dontas said.