The Charcoal Group is moving ahead with plans to open new restaurants even as economic uncertainty and rising operating costs continue to pressure Canada’s hospitality sector.
Jody Palubiski, a partner in the Waterloo, Ont.-based restaurant company, said the organization is maintaining an expansion strategy centred on guest experience, staffing and operational discipline at a time when some operators are pulling back.
“We’ve been moving through this period of uncertainty with many factors — tariff talk, economic uncertainty, rising unemployment in some areas,” Palubiski said in an interview. “We’ve been keeping a clear mind, like we have in other difficult times — COVID, the 2008 recession — taking the same approach we always have.”
The Charcoal Group operates roughly 20 restaurants under several brands, including Charcoal Steakhouse, Martini’s, Del’s Italian Kitchen, Moose Winooski’s, Wildcraft, Bauer Kitchen, Soleil Restaurant and Sociable Kitchen and Tavern. The company also operates 12 Beertown locations and is developing three additional Beertown restaurants and two more Wildcraft locations.
Palubiski said consumers are still spending on dining out, but have become more selective about where they choose to go.
“I think people are being a little more selective,” he said. “You have to be performing well and delivering excellent experiences. If you’re firing on all cylinders, you’ll garner support from the community.”
That focus on experience has become increasingly important as operators grapple with higher labour, product and service costs. Palubiski said restaurants risk damaging customer loyalty when cost-cutting measures begin affecting service levels or the overall environment.
“We hear a lot about shrinkflation,” he said. “In a full-service restaurant, that’s not just portion size. It’s not just raising prices because costs go up. It’s when you reduce staff, expand sections, delay maintenance. Shrinkflation is anything that impacts the experience.”
He said the company’s strategy has been to protect what he described as the three core pillars of hospitality: service, product quality and environment.
“It’s about maintaining and doubling down on those pillars, not pulling back,” he said.
At the same time, the company has been reviewing spending across its operations to identify costs that do not directly affect guests.
Palubiski said the company models expected increases annually across staffing, food products and services at each location before determining where savings can be found.
“We ask, ‘Where are we spending money that doesn’t positively impact the guest experience?’” he said.
One example involved branded takeout packaging at Beertown locations.
“We realized we were spending $40,000 a year on Beertown stickers for takeout packaging,” he said. “We asked, ‘Does removing that impact the experience?’ The answer was no, so we cut it.”
The company has also tried to manage menu pricing carefully despite continued cost pressures.
“You find several areas like that to offset rising costs,” Palubiski said. “Then you pass along some costs, but do it carefully, thoughtfully and respectfully. People understand prices go up — it’s how you do it that matters.”
While labour shortages have challenged many restaurant operators since the pandemic, Palubiski said staffing has remained stable within the Charcoal Group, which he attributed to long-term employee retention and recruiting relationships with colleges and existing staff networks.
“We’re in great shape,” he said. “We have a lot of long-term staff.”
The company also receives referrals from employees and customers, he added.
“It’s a great compliment when guests want their kids to work with you,” he said.
Palubiski described staffing as the foundation of restaurant operations, saying management attention shifts quickly when teams are understaffed or inexperienced.
“If you don’t have a quality team, that’s your only problem,” he said. “If you do, then you can focus on everything else — expansion, service quality, training.”
The company’s continued expansion has also become a recruiting tool, he said, particularly during a period when some competitors may be slowing development plans.
“People look at us and say, ‘You seem confident and optimistic at a time when others are holding back,’” Palubiski said. “That attracts guests, suppliers and talent who want to join and lead within the organization.”
Palubiski has spent more than two decades with the Charcoal Group after joining partners in 2003. The original Charcoal Steakhouse dates back to 1955.
Before joining the company, he worked in Toronto restaurants including Alice Fazooli’s, Al Fresco’s and the Loose Moose, and later spent time with Oliver & Bonacini.
He said he entered the hospitality industry as a teenager after getting a job at Rockway Fish and Chips in the Kitchener-Waterloo area.
“At 15, she gave me keys and responsibility,” Palubiski said of owner Hedy Hughes. “That environment — the teamwork, the highs and lows — and her belief in me gave me confidence and a desire to grow in the industry.”
More than 30 years later, Palubiski said the variety of responsibilities within the restaurant business continues to hold his attention, from culinary development and beverage programs to construction, real estate and finance.
“One day I’m with culinary teams doing tastings, another with beverage teams, then design, construction, legal, accounting, real estate,” he said. “The diversity of disciplines is incredible.”
He compared the business to conducting a symphony, with multiple departments working together to create a consistent experience for guests.
“There’s nothing like it,” he said.
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