The average business response to the coronavirus outbreak strikes common themes: Cutting costs. Cutting operating hours. Cutting service levels. Going to skeleton crews, or even temporarily shutting down altogether.

Steps like those are totally justified: When revenues don't match expenses, any small business without significant capital reserves, which means most small businesses, need to shift into austerity mode -- or risk going out of business.

Some businesses, of course, have not. Trek Bikes announced employees who choose to stay home will still be paid. Uber is expanding sick pay.

And then there are companies like &pizza (pronounced "and pizza"), the 40-location, 750-employee pizza chain that sells customizable, personal, oblong-shaped pizzas.   

In response to the COVID-19 outbreak, co-founder and CEO Michael Lastoria just announced the company is taking the following steps:

  • Providing an immediate $1 per hour raise for all shop-level staff
  • Providing free, unlimited pizza for all employees and their immediate families
  • Paying commute costs if mass transit gets disrupted
  • Expanding the sick leave policy to new employees, as well as to anyone caring for loved ones or caring for children when schools are closed
  • Providing 14-day "health and safety pay" to anyone diagnosed with (or suspected of having) COVID-19, along with anyone who has come in contact with a person diagnosed with the virus
  • Providing free pizza to hospital staff: Doctors, nurses, administrative staff, cleaning staff, etc. 
  • Providing free delivery on all orders so customers who don't want to leave their homes won't have to

In order to pull all that off, starting today &pizza shut down its corporate offices over the weekend and shifted roughly 50 employees to various locations in order to help cover staffing needs.

"Every employee has the same health insurance policy," Lastoria says, "whether an entry-level employee or me. Sending our support staff to stores is just an extension of that -- from a leadership perspective, it's 'shoulder-to-shoulder.' We want to make sure our Tribe feels appreciated and supported. But beyond that... it's just the right thing to do."

Right thing or not, those steps will come at a significant cost. Increasing pay for hundreds of employees. Giving away potentially thousands of free pizzas. Absorbing the cost of free delivery, and employee commute costs.

Fortunately, &pizza investors appear to be onboard, even though no end date has been set for the initiatives.

"Our investors are supportive of the brand and its values," Lastoria says. "They understand that doing the right thing first, and figuring out how to pay for it second, is something they singed up for." 

"The virus is moving quickly," he says, "so our brand values allow us to move quickly to help our people and the communities we serve."

As for reassuring customers that cleanliness, safety, etc. measures have been ramped up -- a communication step many businesses have taken over the last week -- Lastoria shrugs.

"Cleanliness and sanitation are table stakes for a restaurant," he says. "That should be a given. What matters more is how we serve our communities in a time of need. Like our employees: We'd be nowhere without our employees. Sticking to schedules, providing hours, continuing to pay people... that's extremely important, especially for hourly employees who are often forgotten during a crisis."

Of course "austerity" measures will still be taken: The company's plans to expand south from Northern Virginia -- Richmond, Charlotte, Raleigh, etc. -- will have to take a back seat. (Including a new location in downtown Richmond that is already built-out.)

The long-term effect on the balance sheet is also yet to be determined. 

"We'll grow when the time is right," Lastoria says. "But right now, we have people who signed up to work here, communities we serve... doing the right thing for them is our main focus. 

"We'll worry about growth later."

Published on: Mar 16, 2020
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