A business cannot stay in operation for over 60 years without evolving — whether it’s adapting to technology, refining current operations, updating physical space, or expanding to new locations. Despite being the largest restaurant in California, Rewards Network client San Pedro Fish Market & Restaurant isn’t stopping its evolution anytime soon. And it’s all unfolding for the world on their award-winning web series, “Kings of Fish.”
Yesterday, we spoke with co-owner Mike Ungaro about San Pedro Fish Market’s impressive history and how “Kings of Fish” helped save their business. Today, Ungaro gives us more details on their upcoming expansions and his advice for other restaurateurs.
You mentioned that you’re opening three new restaurants this year. But this isn’t the first time the restaurant has expanded.
Can you tell us more about the initial expansion, and why you’re expanding to new locations now?
San Pedro Fish Market has close to 2,500 seats right now. Our sister location, the Crusty Crab, is located next door. We share seating, have the same owner, same menu, same customers. So if you combine those, that’s really close to 3,000 seats.
[The expansion] was pretty gradual. 1982 was the really big push to go from 30 seats to 300. We kept gradually expanding, but we maxed out a few years ago. We were finding there wasn’t enough parking and we didn’t have enough seating. People were waiting in line just to get in the building after they’d already driven an hour, had to find a place to park for another hour, then had to wait an hour to get in to eat, and another hour to get them fed.
We were just trying to figure out how to get more tables in here, because we can’t turn them any faster than we are, after people have driven that far.
That’s why we’re now looking into expanding into new locations — opening three restaurants this year. The grille concepts are in Harbor City and Palos Verdes. The third one literally just popped up about a month and a half ago in Long Beach on their waterfront that we’re in the process of remodeling.
We’re using the design company Studio McCormack. [Rick McCormack] was the executive designer for The Cheesecake Factory all through the ‘90s and BJ’s Restaurants after that. Now he’s doing hotels and resorts and his stuff’s amazing. We kind of took the same approach to these fast casual concepts because we wanted them to be investment opportunities.
[Our goal is] to open 50 of them in the next 5-10 years. That’s how we’re going to take care of transitioning from third to fourth generation in our family.
Opening these new restaurants, along with already operating the largest restaurant in the state, must have its challenges.
Can you tell us about those?
You know we’re so used to doing it, the challenges aren’t what you’d typically think. We have a hard time managing traffic flow, because the business wasn’t built to handle it. The kitchen wasn’t built to handle the seats that we added, so we have to keep innovating and finding new ways to add seats.
We bring on consultants to help out. We don’t have a hard time with the supply chain part of it – we can sort all of the seafood we need. That’s usually not an issue. And we can serve it really, really fast. It’s just that we don’t have enough space to handle the demand from the customers.
We don’t have enough seats.
And when you have that many people coming through, [sometimes] 40,000 people in a week, how do you manage the trash flow? How do you manage employee retention?
For a long time, we were paying 25% above minimum wage, but when California changed the wage laws, everybody was paying what we were paying. We couldn’t raise it much higher than we already were without a significant increase in our prices, but at the same time people who worked for us for a long time were like “I can get the same pay at an easier job. This place is pretty hectic, I don’t know if I want to stay here anymore.”
So we’ve had a hard time managing turnover.
San Pedro Fish is probably closer to 150 employees now, and with Crusty Crab, it gets to over 200. With the new restaurants, it’s going to be even more. It’s added a lot of complexity in our human resources, so we’ve had to bring on someone to do just that. We used to be able to just do it on our own, but it’s grown beyond our control. We’re in a growing pains sort of situation from mom-and-pop store because it’s still family-owned and –operated. At any given time, there’s 10 or 15 family members that work there, but we’re in this stage where that philosophy doesn’t always carry over to the size that we’re growing to become.
What are your secrets to employee retention and helping your managers better manage their teams?
Some of the things we do, when we have profitable year — which we’ve had since 2008 — is we always have an employee party. We invite all of our employees and they’re all allowed to bring one family member. We cater in. We use our seating because we’ve got plenty of seats. We have live music. Everybody gets a Christmas bonus, which is usually a percentage of their total income for the year, depending on how profitable we were. That’s on top of offering a 401K and (before it became mandated) we already offered health insurance.
We try to do as much as we can to benefit and take care of our own employees. And we actually have 40 employees that have been with us more than 10 years. So, taking care of our staff and a lot of their family works for us, too. We have people that work for us, but we also employ their children or their nieces and nephews and cousins.
And I think we’re open to continually learning.
On “Kings of Fish,” you’re known as Mr. Computer and you’re the leader of the business’ marketing efforts.
Could you tell us about your marketing strategy and how your technology savvy plays a role?
With the world and the market place and technology, if you’re not elastic and flexible and willing to roll with those changes and try new things, your business will be over and you won’t even know it.
For three years in a row we’ve been in the top 10 most-Instagrammed restaurants in the country. And we weren’t doing anything the first year of that with Instagram, we were focusing on Facebook. So here we were, most Instagrammed, #5 in the country, like Café du Monde was number one that year, Katz Deli was #3, and we were #5. And we had less than 1,000 followers on Instagram.
And I was like wow, all of this was going on in the background. People were sharing pictures, geotagging themselves, talking about us, and we had no idea it was happening. I literally didn’t know what to do. I just realized were going to have to find a way to hire an agency to manage our social media, because I was doing all of it and I didn’t even know that was going on.
I think part of it is you’ve got to be willing to bring in outside help that’s competent and try not to be too cost-adverse about it. You have to look at it as where can I produce a return on this? If you start thinking, “$500 a month? I could do that myself,” you’re losing and you don’t even know it until it’s too late and you can’t recover.
And you could have competitors using that technology or using those media forms against you without knowing it, until don’t have any more customers.
What advice do you have for social media management?
My daughter’s asking me right now “Dad, how can I get 2,000 followers on my account for Instagram?” And I’m like “What, you’re 13!”
I think first and foremost, it’s not what you want to show people: it’s what they want to see. I think a lot of times it’s “I really want to show people what I did.” I think the catch is, how do you know that they care or not? Who’s your customer? What do they care about? What are they looking for? And how can you incentivize them to tell your story? Do they even know what your story is? How can you use Instagram, Facebook, etc. for that?
As soon as we got active on social media, we started to see about an average of 10% annual growth starting in 2008, but this year we’re probably going to be closer to 15 or 20%. I really attribute a lot of that to what we’re doing on social media, with our series and the partnerships that we’ve put together.
What we did that was very unorthodox. We’re such outsiders – we went to a Chief Media Officer and Chief Digital Officer conference because we were looking for sponsors for “Kings of Fish,” but we don’t know how to value it because we’re not a media company. We sell fish. So we go to this conference where JP Morgan Chase is there, and Dick’s Sporting Goods is there. And we think we can learn a lot, but also we could make some contacts and talk to some people about cross promoting.
We’ve learned so much about social media — about how big Fortune 500 companies are looking to use it. That’s probably my biggest encouragement for people: don’t try to figure it out on your own. If you can’t afford to hire somebody to do it for you, then go and learn as much about it as you can, because technology is changing so fast. You can’t buy a book from five years ago. You’ve got to find like something you can attend that’s reputable, with people who do this for a living. Find out what they’re doing and see where that takes you.
Thank you for sharing your advice and your family’s story of the San Pedro Fish Market with us – and everyone through “Kings of Fish.”
The last question we’d have for you is one of our favorites to ask: What has been you and your family’s greatest reward as restaurant owners?
Well, I was going to say freedom, but in the restaurant business there’s no such thing. [Laughs]
I don’t know how to describe what it’s like to work with your family and be successful. I know there’s a lot of successful family businesses, but I don’t know that all families spend the kind of time we do together and still do that. [Or have] the kind of stressful environment we have. You can see some of the drama. It’s not manufactured for the series.
To know that my grandfather started this business as a corner store that was 100-square feet maybe — and today we’re on 55,000 square feet and busting at the seams — and we all played a part in that? To me, that’s really rewarding. We’ve created, we built that, and we’ve carried it on.
My dad passed away, my grandfather passed away, my mom passed away. There are a whole bunch of family members that were there from the beginning that are no longer alive. It’s just very rewarding for me and my brothers and other family members to know that we’re carrying that torch for them. Like they didn’t waste their lives and all the blood, sweat, and tears it took to build the business for nothing.
And that’s a big part of the show. We’re really proud of what we’re doing. It’s fun because I think it’s cool for people to see the stories and be part of them.
Because it doesn’t happen without the customers.
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