Success story: How Joburg restaurateur Larry Hodes changed his business to survive Covid-19

Restaurateur Larry Hodes was facing the harsh reality of closing his upmarket restaurant due to the financial impact of Covid-19. The transforming of a restaurant into a Gourmet Grocer is generating much-needed income for other small businesses.

Hodes revamped Voodoo Lily restaurant in Birdhaven in Johannesburg in July 2019, and also owns Arbour Café in the same precinct.

“In times of crisis, the worst thing you can do is nothing. Even if you’re not sure what success you will have, it’s worth giving it a try with a positive mindset.”

The national lockdown forced restaurants and many businesses to remain closed. When certain restrictions were lifted on Level 4, Hodes saw an opportunity to transform Voodoo Lily into a retail store.

Under lockdown, retail stores offering essentials and food could operate. What’s more, the licence application process was fairly easy making it possible to launch soon as suppliers came on board.

“With no start-up costs, venturing into retail focusing on a niche market was the only way to survive financially.”

How it all started

In May, together with his wife Annie, they decided to pilot the project to put the idea to test. “Mother’s Day was around the corner, so we invited small local producers to sell their stock from our premises”

On 6 May, they put out a request for interest on WhatsApp and Facebook, and on 8 May, they were in business. It turned out, many of the respondents were suppliers to restaurants and markets who were battling loss of sales. “They leapt at the chance to be able to produce and sell again. Within 24 hours we had a grocer,” says Hodes.

Initially, there were around 15 suppliers who provided their produce on consignment. The Gourmet Grocer stocks home-made sauces, small gifts, a selection of fresh baked goods and a wide range of non-perishable goods.

“Our customers are delighted with the new range of quality and often-unusual products in their area. Post lockdown, we will continue with a hybrid of the Gourmet Grocer and the café.”

Collaborative efforts

Hodes says to date, there are approximately 100 suppliers. We realised then that consumers are missing out on great local products, he says. The Gourmet Grocer has given others in a similar position a chance to survive financially through this global pandemic.

The setting up and successful operation of the store has been the result of collaborative effort with local small suppliers.

“Since the start, over 90% of the Gourmet Grocer’s suppliers have been small businesses. Supporting SMEs will continue to be key in our evolving business model.”

Adding another layer to the business

Spurred by the success of the store, Hodes saw another opportunity for generating income. On 1 June, Coffefe Coffee Roastery, a collaboration between Hodes and coffee aficionado and supplier, Marco da Silva was established.

Before Covid-19, Da Silva was operating a wholesale business supplying coffee to independent restaurants. “When Covid-19 hit, I lost 60% of my clients. That Hodes was already a client made the collaboration easier as our vision and goals were aligned,” says Da Silva.

Da Silva then moved his roaster to the store, and in no time, the Gourmet Grocer was selling coffee. On the actual day of the launch, the community came in droves to support the venture.

Coffefe Coffee Roastery offers a range of ‘unpretentious and unapologetic’ options in sustainably and ethically sourced coffee products. Da Silva says they stock coffee beans globally in coffee growing regions, and notable in East Africa and South America.

“It’s a huge shift from wholesale to retail business. Losing 60% of clients forced me to think out of the box, make a plan and collaborate where possible.”

The outside store area is the café. On any given day, what was the Gourmet Grocer café is now a hub of activity attracting people from all walks of life.

The business of retail

Measuring 350m², the former Voodoo Lily restaurant now houses the Gourmet Grocer, café and Coffefe Coffee Roastery.

Hodes didn’t incur costs in setting up the store, however, he says lockdown forced him to be innovative in order to survive. There is still a lot to learn, and he has made costly mistakes in the process.

For example, he had to learn to cost items right so that he doesn’t lose money. As a result, he has created one new job, that of a bookkeeper who works fulltime.

“Currently we can cover our costs but we are not making profits as yet –  things will get better. We were unsure about joining the retailing sector, but now we are overwhelmed by the Gourmet Grocer success.”

Hodes says in future, and when they are expanding, Morningside and Sandton could be ideal locations for the concept store.

Financial impact of pandemic on restaurants

Hodes who has worked in the hospitality for years, currently owns Arbour Café, the Gourmet Café and the Dark Kitchen. The Dark Kitchen is a delivery-only restaurant that provide at-home diners with restaurant-quality food prepared in an industrial kitchen.

“We launched the Dark Kitchen days before the national lockdown in March as way to supplement our income.”

He says the Dark Kitchen is the second one to open in South Africa, and first in Johannesburg. It is also the only one in the world offering a nine slice pizza.

For Hodes, being innovative was necessary to stay in business. In April, he shut down his other restaurant Calexico at 44 Stanley in Milpark permanently. The restaurant had been struggling for some time.

“Opportunities are borne out of big crisis. For anyone wondering what they can do? Start small, but by all means, start somewhere.”

He says many people are afraid to fail, as a result, they never venture into uncharted territory. “Perfection is the barrier to progress, and so I urge entrepreneurs to learn by doing.”

The evolution of the Gourmet Grocer and its different offerings has set the way forward for his business. “Sometimes one needs a better strategy, and alternatives with good intentions to try something new,” he adds.

• Got a business success story or an uplifting tale to tell about making South Africa a better place? Write to [email protected]

 

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