'I think into the fall, it will require everybody’s absolute a game’: California Pizza Kitchen on re-hiring staff post-pandemic

Jim Hyatt, California Pizza Kitchen CEO, joins Yahoo Finance’s Adam Shapiro, Seana Smith, and Brooke DiPalma to discuss how they are coming out of the pandemic from hiring back new staff, innovating their menu, and getting customers back inside restaurants.

Video Transcript

ADAM SHAPIRO: Let's get back to Main Street and what's happening to small, medium-sized, and large businesses as the economy reopens after the COVID-19 pandemic. And I say after because, like a lot of Americans, I remain optimistic that we are on the latter end of this pandemic.

California Pizza Kitchen is a favorite nationwide, and their CEO is joining us now-- Jim Hyatt, CEO of California Pizza Kitchen-- to talk about all kinds of things, including a new-- the vegans will love it-- pizza dough. But I just gotta ask you, I was just down in my hometown, Miami. Went to Miracle Mile in Coral Gables. There used to be a glorious California Pizza Kitchen there. It closed. We were there for my dad's birthday, by the way. And it broke my heart. And I want businesses like yours coming back. So how do you emerge when you are a national chain and you have different 50-state re-opening guidelines? How do you get on top of this? I want you back in Coral Gables.

JIM HYATT: Yeah, it's been a puzzle, Adam, walking through COVID and figuring out what malls we're going to, you know, do well on the other side of COVID, which ones may not. Lease terms with landlords, there's been a lot of conversations. We love our landlords, Westfield, Simon. They've been great to us. But in Miracle Mile, we had a lease that was short, and it just didn't work out to keep that one going. But we'll be right back into that marketplace, I can assure you. We like our other restaurants in Florida, where you can come now and enjoy our new chickpea crust. So it's actually in Florida and LA. So something new for you to try there, Adam.

BROOKE DIPALMA: And Jim, Brooke here. You introduced that chickpea crust today, but in late 2020, you guys also introduced a plant-based barbecue chicken pizza. How did customers react to that, and are you hoping that these new options lure customers back in due to new trends?

JIM HYATT: You know, guests want innovation, and that's what we're all about. That's what we do. That's our DNA. So back to 1985 when we, you know, launched that barbecue chicken pizza, we just tried to keep that going. So to your point, we've got cauliflower crust that we came in 2018. We introduced GIG-certified pizzas for all of our gluten or celiac guests. Then we've got the cauliflower crust, tied together now with the chickpea. We've got take-and-bake. So doing innovation is really what we do. And we're happy to bring that fun and relevant innovation into the marketplace.

SEANA SMITH: So Jim, you're talking about innovation, adding new items to your menu, luring customers back. I imagine you need more workers. What has the hiring process been like? Are you able to find the number of workers that you need?

JIM HYATT: It's really tough right now for sure. Everybody's struggling. We maybe had a little better start than most into that issue. We've had traditionally very low turnover. We've exceeded, I think, a lot of our restaurant partners out there. But we had a running start, but for right now, it's pretty tough. And I think for another couple months into the-- you know, the fall, it will require everybody's absolute A game.

All our athletes are on the ground, trying to make sure we cover and have great guest service out there. It's really challenging. I'm a little concerned, too, it's leaking into the supplier side, and may disrupt that a little bit. But so far, CPK-wise, we've been really good. We've been-- we're now above our 2019 sales levels. We're ready to rock and roll. We really need to hug up to the staffing and make sure we're ready to support the business and the economy, frankly, that's out there trying to push.

SEANA SMITH: Jim, have you raised wages? Do you have plans to raise wages in order to lure some of those workers back into the workforce?

JIM HYATT: We've had wages on our table-- on our plate for a long time now. We're over $15 an hour as an average. And by market, we do everything we do to remain competitive. So surely that's one of those, you know, opportunities to recruit and maintain and keep your staff, but it's other things, as well. I mean, they want to work in a great environment. They want to have a management team that they appreciate and take care of each other. So there's a lot more involved than just pay, but surely that's on top of everybody's mind right now.

BROOKE DIPALMA: Jim, speaking of that experience at a California Pizza Chicken-- Pizza Kitchen, apologies-- how exactly are you looking at it when it comes to indoor dining? Are you reimagining that experience for customers upon reopening? Is there more digitization?

JIM HYATT: Well, what's happened with COVID, right, we first got basically shut down inside, so everything was, you know, off-premise. It went to contactless. It went to all off-premise channels, and getting muscle memory built around that. But as, I don't know, the middle of the summer and into the fall of last year, we slowly started bringing restaurant seating percentages online. And as of last Tuesday, really, with California reopening, we're pretty much in full mode right now. And we've seen the customers respond to that immediately.

We like two things. We like seeing all our customers back inside our dining rooms. That's been a big plus. But we also like the stickiness of all that third-party business that has really remained, as well. So that raises kind of the sales roof for us, in a way. So we're going all lanes open right now. Staffing is something that we're challenged with, but they're going to come for innovation, the great food, the great service. So we like where we are right now.

ADAM SHAPIRO: Just out of curiosity, the whole concept of going to the restaurant, and how much many of us are thrilled we can do that again, how sustainable do you think it is? Because right now, we're getting the rush of everyone going back, but there are now two avenues of revenue generation, the takeout, as well as in, you know, fast casual dining experience. Is there a point where you see this slowing down as we get back to whatever normal is going to be?

JIM HYATT: Well, what we've seen so far, Adam, as dining rooms have reopened, what we've seen a little bit of a fall in is the order on the call centers and into the pickup by consumers. But frankly, the third-party part of our business has stayed the same, regardless of opening up those levels of seating. So that's that stickiness that I talk about. So we traditionally might have been 18%, 20% of third-party. We're now at 35, 40, and it seems like it's going to stay there.

So we're doing everything we can do right now to hug up to all good things off-premises, while, at the same time, we invite back all those guests who want to get out and stretch and have, you know, a little reunion time with friends and family. So it's really working out nicely. And again, it's pushing our sales above our 100% normal levels of 2019. So we're-- we're feeling all right right now, other than worrying about staffing and making sure that we're able to take care of our guests the way we want to.

ADAM SHAPIRO: I think you're going to have a hit on your hands with that chickpea crust pizza. We hope you'll come back and let us know how the sales are growing. All the best to you and the team at California Pizza Kitchen. Jim Hyatt, CEO.