A month ago, the food world stopped spinning for a few seconds as people paused to absorb Danny Meyer’s big announcement: tipping would be phased out at all restaurants in his Union Square Hospitality Group. But it’s not as if Meyer is traveling through uncharted territory. Restaurants across Europe include a service charge; Joe's Crab Shack just became the first national chain to end tipping — and there are precedents closer to home, too.
In July Abrusci’s Italian Restaurant in Wheat Ridge replaced tipping with a 20 percent service charge. And next summer, when Abrusci’s moves to its new location, the fee will be replaced with increased prices, which is the route that Meyer plans to take. “The total will stay the same,” Abrusci's co-owner Nancy Progar stresses. Here's more of our conversation, condensed for clarity.
Westword: You were ahead of the game when you eliminated tipping this summer. How long were you thinking about this change?
Nancy Progar: My husband is the risk-taker in the family, and the entrepreneur, so he’s been thinking about this for over two years. His first career was accounting as well, so he’s been working towards a new business model that works for all versus strong servers basically “setting up shop” in our restaurant, making all the money and earning even more from the tipped minimum wage increases every year, all the while the kitchen staff stays the same (all things being equal, meaning no increase in sales)….
People have been thinking about the unforeseen impacts, both positive and negative, at Meyer’s restaurants, including staff turnover since servers won’t be receiving the big tips they’re accustomed to. Has this been your experience?
Yes, we’ve seen some ups and downs in our decision, mostly due to our quick implementation of our new policy. It’s a big change for the front of house and it takes time for them to adjust in many ways. We did lose a couple of good servers but have since hired great servers as well, since our salary-with-benefits offer has been very attractive to many senior servers in the area.
How have customers reacted? Has it made an impact on your volume?
We have had much reaction to this change. It has felt, for some, like we’ve taken away a basic right. We did not expect that strong a reaction. However, on the flip side, our feedback cards have also surprised us with glowing reviews and great suggestions. These feedback cards have given us so much more information than a lousy tip does. For sure, it is a paradigm shift and it will just take a long time to understand and digest.
Naysayers on this topic – not at Abrusci’s, just in general — have said that the price increases necessary to give employees a living wage will put restaurants out of business because restaurateurs can’t raise prices enough. What would you say to them?
I would say the naysayers don’t understand how we’ve implemented this model. The total cost for customers has stayed the same…it’s just a different distribution of the money and profits. This will only strengthen our business, especially because we are a mom-and-pop business and want to take care of our employees like family.
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