A popular restaurant in Newport that adopted a 20% service charge during the pandemic has returned to voluntary tipping.
Local Ocean, on the Newport Bayfront, is known for its locally sourced seafood. Restaurant founder Laura Anderson told KLCC they started charging a 20% gratuity during the pandemic to provide more predictable wages and benefits for staff. She said they’d seen auto gratuity and service charges at other bigger restaurants and followed that example.
She said it was effective at first, but over the past few years, the benefits seemed to diminish.
“We weren't really able to move the needle on wage improvements in a way that we think voluntary tipping can,” Anderson said. “And also there were just some customers who really prefer voluntary tipping, and we heard that.”
The restaurant has retained a 4.5% hospitality charge on guest checks.
“That allows us to keep a lot of the gains that we made under the service charge model like benefits and better wages, but also allows us to not have to constantly reprice the menu,” said Anderson.
She said many customers ask: ‘Why not raise prices?’
“The main reason is that in a restaurant business, menu prices really reflect the cost of food and beverage, and in our business in particular, because we buy seafood direct from boats off the docks, it's very seasonal and very volatile,” she said.
She said this change made sense for a very seasonal business at the employee-owned company.
“It seemed like a good opportunity to say, ‘you know what, we tried something, it kind of worked for a little while, and now it's not really getting the results that we need and maybe we just need to go back to doing things in that more traditional way,’” said Anderson.
The change was effective July 1.
“I really am just grateful that we have such committed staff of employee owners and we've got a really strong customer base,” Anderson said. “Sometimes making changes like this can take some work, but so far everybody seems to be in it together and very supportive.”
