Great Business Ideas: Don’t Be Afraid to Recreate Your Business

Great Ideas for your Small Business: Don’t Be Afraid to Recreate Your Business

when anthony’s fish grotto dropped the zabaglione cake from its menu, Rick Ghio feared his dear, departed grandmother, Catherine, would send a lightning bolt down from heaven in protest. “But we were throwing away more cake than we were selling,” said Ghio of the traditional sponge cake served with a rum custard sauce. Now Anthony’s serves trendier tiramisu and fresh fruit tarts.

After fifty years, Anthony’s also dropped rosé from the wine list, switching to white Zinfandel. These menu changes are just part of the major facelift under way at the famous San Diego–based restaurant chain.

Today Rick, a co-owner, manages the financial aspects of the company. His brother, Craig, and three other family members are the third generation to run the family-owned business founded by their grandparents.

Rick and his counterparts are giving the business a total makeover, inside and out. But why would a famous San Diego institution like Anthony’s reinvent itself? “We were losing our market share,” he said. “Our reputation was still strong, but people were not dining at Anthony’s as frequently as they did in the past.” Families still booked tables for major celebrations and holidays, but the younger, twenty- and thirty-something crowd did not consider Anthony’s a hip place to eat. “Competition is fierce, relentless, and unforgiving,” said Craig Ghio, who oversees seafood purchasing and recipe development. “Diners have more choices than ever, and tradition is no longer enough to keep them coming back.” At first they changed advertising agencies, updated the menu, and did a little remodeling, but sales stayed flat.

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The company, which started out in 1946 with one eighteen-seat diner, decided to completely rethink its purpose. The family hired two respected restaurant consultants who urged them not only to remodel their La Mesa location but also to turn the management of the company upside down.

The family had always made all the key decisions. Now Anthony’s is managed by interdisciplinary teams, led by trained “integrators” who conduct frequent discussions about everything from service to what kind of food and drinks to serve. The company’s 400 employees all serve on one or more of the teams.

Everything at Anthony’s has dramatically changed in the past year or so, Rick said. For example, “You always paid your bill at the cash register on the way out,” he said. “Now you pay your server, which slows down turnover, but on the upside, it gives the server an excellent way to close out the meal.” They spent $1.3 million turning the lakeside La Mesa location into a fantasy grotto, complete with a video game arcade built on a thirty-six-foot Criscraft boat, a trellis-covered patio, and cascading waterfalls.

They created two new characters for kids: Sandy the fish and Diego the octopus. Kids have their own menu and free beverage cups to take home. “We learned to scan the environment,” said Rick, “to stay in front of current trends. For the first time, we extended our hours. We are now open until 10 PM on weekdays and 11 PM on weekends.” Sales increased 35 percent shortly after the remodeled La Mesa restaurant opened. “People of all ages love it,” Rick said.

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While retooling the management and remodeling, they also worked hard to control food costs and boost profits. “For every dollar we took in, we used to spend 44 cents on food,” he said. “Now it’s down to 36.5 cents, and we’ve become more profitable.” Anthony’s, which is privately held, has revenues of about $18 million a year.

Although it has taken thousands of hours and more than $1 million, Rick said the total revitalization program was worth it. “It is the scariest darn process,” he admits. “We literally had to reexamine things that were done the same way for fifty years. There’s a huge risk in saying goodbye to some of the things we had been doing … but we are truly blessed by the initial response.”