Fast food chain Grubbs Take Away is looking to eat up some 30,000
s/f of New York City retail space as part of a plan to build its customer base
during an unprecedented boom in take-out and delivery.
The company – which has built its own delivery platform with a focus on hyper-local business – has just signed a 10-year, $3.4 million lease for a 2,000 s/f space at 287 Seventh Avenue in Chelsea.
Its first NYC store opened in Lenox Hill last year and it is
in talks for two additional spaces downtown and in Murray Hill as part of a
plan to open a total of 15 restaurants within the next 12 months.
With 40 in-house delivery personnel, owner Ian Mitchell is
working to corner a delivery market he believes is in danger of being wiped out
by corporate giants such as UberEats, DoorDash and the $7 billion behemoth, Grubhub.
“Fees that corporate delivery companies charge are a cancer to the very survival of local restaurants,” said Wayne Rose, vice president of Rose Retail RE Group, who represented Grubbs in the deal..
“That’s why Grubbs founder, Ian Mitchell, is leading his own
Save Our Stores campaign (SOS Campaign) with a family-friendly program which
rewards customers for ordering direct. His program lets customers keep a little
money in their pocket while helping a local business not just survive, but
thrive.”
According to consumer data company, Statista, the online
food delivery business is expected to grow to $23 billion a year by 2023. The
lion’s share of that is expected to go to third-party online platforms.
Three months into the coronavirus pandemic, New York City
Council ordered a limit how much third-party delivery companies can charge
restaurants for orders for the duration of the pandemic.
Under the emergency order, delivery providers like Grubhub
must limit their fees to 15 percent or less an order. The council also voted to
approve caps of five percent for non-delivery services ordered via third-party
platforms.
Jersey City, NJ, Seattle and San Francisco introduced their
own emergency caps of fees as restaurants across the nation were shuttered
during the pandemic.
While many struggling restaurateurs continue to use the third-party
platforms as a way to grad a share or business, Mitchell is looking to build on
razor-thin profit margins with fast, friendly and personal service.
“With more and more people now working from home, we have
been forced to really think out of the box,” said Mitchell, noting that the
owner of Chicago Pizza Boss posted his Grubhub receipt on Facebook showing that
he made only $376.54 on $1,042.63 in orders.
With the COVID pandemic wreaking havoc across the retail
sector, Mitchell – who already operates Grubbs Take Away in Hoboken and Jersey
City – has been negotiating new terms with property owners that include a
discount on pre-COVID rents, payment step ups for the first few years, extended
free time and caveats providing reduced rent in the event of future shutdowns.
Rose explained, “We do have a pandemic clause that covers
future stoppage of indoor dining, but this way, ownership doesn’t sit with an
empty store and we work with them to cushion the blow.
“Grubbs already has market stability. If it can
strategically locate its stores, grow its loyal following and facilitate a high-volume
sales business in a market with a huge demand for quality food delivery, the
success rate is far more than probable.”
Mitchell – a British-born former airline worker – added, “New
York City is the greatest place on earth and it has gotten through some rough
times.
“But people need to really help save our local operators,
particularly at a time when many are throwing in the hat because of competition
from conglomerates. My hope is that more people will get behind my campaign to
support local business and together we can recover from this latest crisis.”
Mario Rapo, of Home Quest Properties, represented the
landlord in the 287 7th Avenue lease.
