Still can’t find rice? San Diego restaurants convert empty buildings into supermarkets

SAN DIEGO —  Before the pandemic hit, Ike Gazaryan’s job was to work the floor of his restaurant’s dining room, schmoozing guests as they feasted on Chilean sea bass underneath chandeliers. As co-owner of Pushkin, a Russian restaurant, his specialty was warming dinner tables with friendly chatter and a big personality.

Now, Gazaryan’s downtown restaurant is empty, save for a few staff members in the kitchen. Instead of patrons at his bar, there are two computers set up to take online orders. But it’s not fine cuisine he’s selling.

Gazaryan is selling groceries. Chicken, rice, beans, produce — essential items that have become scarce in supermarkets across the U.S.

“I miss the people,” Gazaryan said. “I miss the interaction with my customers. But it’s necessary.”

Chefs who once baked racks of lamb and Norwegian salmon are now unwrapping massive boxes of restaurant-grade meat, flour and other pantry staples, weighing them by the pound and wrapping them in Ziploc bags for individual sale. Of the 15 staffers Gazaryan originally laid off when Pushkin shut down, he’s been able to hire 12 back.

“Business has picked up, thank God. But it’s also something we’re doing for our community,” Gazaryan said.

Ike Gazaryan owner of Pushkin, has converted his restaurant to an online-only supermarket.

(K.C. Alfred /San Diego Union-Tribune)

From dining room to supermarket operation

Pushkin is one of several San Diego restaurants and specialty shops that have overthrown their entire business model to convert into tiny supermarkets. Leaning on restaurant suppliers that have excess food and nowhere to sell, these business owners are filling a gap that grocery chains have been unable to serve.

For Denyelle Bruno, the CEO of Southern California restaurant Tender Greens, the idea struck out of personal need. Shortly after the pandemic took hold, her executive team was sitting around a table, commiserating about the empty shelves at their grocery stores.

“We were experiencing a weird irony,” Bruno said. “Our suppliers who normally direct their products to restaurants were suddenly in a position where they had no outlet to sell. For us personally, there was a lack of supply. But professionally, there was an excess. That day, lightning struck in the room.”

Let’s become a grocery store, Bruno pitched.

“It took about four hours for everyone to realize I wasn’t joking,” Bruno said, laughing.

Forced to shop local

The COVID-19 grocery shortages have put the American way of life under scrutiny, as large corporate chains with global suppliers struggle to bend and flex with unpredictable regional demands. Small, independent grocers, for example, have weathered the coronavirus storm better than their mammoth competitors. These little operations, which often work with local suppliers, can be nimble and quick to react to the market.

Bruno and Gazaryan said the crisis is spurring a shift to ultra-local shopping, which might not be a bad thing.

“There’s going to be a major change in the restaurant landscape, and it will be devastating to a lot of companies,” Bruno said. “But there’s a light at the end of this tunnel. [Americans] do a lot of outsourcing of everything in our lives, and this situation is forcing us to connect more directly with people and businesses in our communities. I think there are going to be some positive outcomes.”

Arthur Gazaryan, who is normally a chef at Pushkin in San Diego, prepares to make a delivery of the grocery items the restaurant is now selling.

(K.C. Alfred / San Diego Union-Tribune)

Grocery orders fly in

Tender Greens launched a grocery delivery service about two weeks ago, through which customers can get curated boxes of hard-to-find goods. Stocked by local farms and regional suppliers, they’re selling veggie boxes, fruit boxes, pantry staples and more, each set ranging from $25 to $65. On Wednesday, the company started selling single grocery items, including whole raw chickens and uncooked brown rice.

The company is fielding about 7,000 orders a day across its 23 locations on the East and West coasts.

For Pushkin, a much smaller operation, the company has also seen impressive sales. The restaurant is fulfilling about 100 grocery orders a day. It was quick to adapt, setting up a website for customers to order groceries online.

Although Pushkin began with just selling rice, beans and a few other items, it is now selling 360 food and household goods on its site. It is selling basics, but also specialty items such as duck breast, honey cake and pickled tomatoes.

The Pushkin staff is currently doing same-day deliveries, beating out the giants of online grocery such as Amazon’s Whole Foods and Instacart, which for weeks have been experiencing long delays.

Local restaurants aren’t the only ones filling the grocery gap. Moniker General, the trendy coffee shop, bar and gift store near Liberty Station, has flipped its space into a small supermarket in Point Loma.

“Ironically, we are more of a general store than ever,” said Ryan Sisson, founder and CEO of the shop’s parent company, Moniker Group.

The general store has cleared all its seating, and pushed tables around the perimeter of the store — each stocked with fruits and vegetables, pasta, beans, flour, toilet paper and more. The company has a website set up to order online and does curbside pickup.

Will any of this last?

The supermarket revenue isn’t enough to make Moniker General what it used to be before COVID-19. The profit margins on grocery are small, and Sisson was only able to retain two staffers to run his supermarket operation. Meanwhile, Moniker Group is suffering greatly across its eight businesses, which span from retail to hospitality.

“We’re absolutely decimated right now,” Sisson said. “Most of everything we do at Moniker just got destroyed. We’ve furloughed 40 to 50 people.”

This is the sentiment shared by many local retailers and restaurant owners. Tender Greens has shuttered seven of its locations since COVID-19 struck. And the shift to selling groceries is not a gold mine.

“This is about survival,” Bruno said.

When the pandemic abates, most business owners plan to go back to their former operations.

“All these people buying groceries are saying they can’t wait for this to be over so they can have a drink with us,” said Gazaryan. “I just want my restaurant back and my people working.”

Meiling writes for the San Diego Union-Tribune.