Cinco de Mayo usually brings in profits but family-owned Mexican restaurants struggle to remain open

Restaurant owner María Elena Avila said she usually sees packed seats and lines outside Avila’s El Ranchito restaurant in Costa Mesa during Cinco de Mayo.

Customers perch close together on stools and rub elbows on bar counters to sip cocktails and beer. They eat her mother’s recipes in a cocoon of chatter, clanking silverware and roving mariachi musicians.

The holiday, commemorating the Battle of Puebla in 1862, is an economic boon in the middle of the year for Mexican restaurants that partake in the festivities. This year it lands on the seventh week of quarantine, and those who have made feeding people a way of life are hurting.

Avila is keeping El Ranchito open for takeout at a financial loss.

While customers stop by to support essential neighborhood businesses, big companies like Jose Cuervo are also pushing people to order from local independent restaurants with their #CincoToGo promotion. From April 28 to May 5, the tequila company will reimburse meals through Venmo for winners chosen at random.

Holiday promotions and possible government loans aside, the restaurant landscape is changing.

“Our family has been in the restaurant business for 54 years. We’ve had recessions, different downturns, 9/11 — but we’ve never seen anything like this,� Avila said.

Pivoting to takeout model

When Gov. Gavin Newsom announced stay-at-home orders amid the coronavirus outbreak, Avila pivoted to a takeout model and was forced to temporarily lay off some employees.

The first El Ranchito opened in a working-class neighborhood of southeast Los Angeles in 1966 and later spread across Orange County, each location with a family member at the helm.

“We made a commitment as a family to have all 13 businesses remain open during this time. We want to serve our community and we also want to take care of our employees so they can have a job that they could provide for the families — an opportunity for them to make tips,� Avila said.

She said she’s hoping to hire staff back with the Paycheck Protection Program aimed to give small businesses financial relief.

Ryan Moore, owner of Mi Casa in Costa Mesa, said he laid off nearly all staff initially. When the restaurant opened for takeout, he rehired about 20 out of 45 employees to work four days a week with reduced hours.

“We’ve been able to maintain about 50% of our normal volume. I’ve got other friends in the industry and they’re lucky to be making a third of what they were doing,� Moore said.

Moore is a third-generation owner and thinks that Mi Casa is faring better than others because the family-owned business has gained loyal regulars since 1972.

For El Mercado Modern Cuisine in Santa Ana, which opened in 2017, the takeout model didn’t work, and general manager José Cerrudo had to temporarily close and lay off staff. Cerrudo and the restaurant staff are waiting for social distancing regulations to ease in order to reopen.

“There’s not enough traffic to cover for the expenses to have the restaurant open for takeout. Anywhere from labor costs, goods, all the other bills — it just ends up that we will be losing a lot more rather than making money or breaking even,� Cerrudo said.

Which restaurants will survive?

During the outbreak, the Avila family restaurant-chain have connected closely with neighboring businesses — checking in on each other, sharing face mask vendor contacts and giving each other tips on how to package food to go. But Avila can’t help but wonder which restaurants will make it.

Avila and Moore anticipate their deep roots in their respective communities will help them recover.

“As long as we as an industry convey the message through our actions that we are performing duties in a safe manner and the customer is safe, then I think as people’s confidence grows and they become less fearful of the disease, over time, the restaurant business will bounce back,� Moore said.

In the meantime, to-go margaritas are helping both eateries stay afloat. It’s a bestseller at El Ranchito along with the family platters. Avila said families have found it helpful to purchase and stockpile the restaurant’s burritos in the freezer.

Mi Casa is also offering a variety of family meal packs. While supplies last, they are selling a $30 margarita kit that includes a 24-ounce bottle of tequila.

Although thinking about finances makes Avila sad, she tries to remember her mother, the matriarch of the restaurant group who passed last year.

“In the difficult times she would say, todo va salir bien,� Avila said. Everything’s going to be OK.

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