Multiple recessions and now a pandemic, La Margarita survives to celebrate 36 years

Pedro Rosales opened La Margarita on the heels of a recession in 1984.

By the time he retired in 2012, the Ferry Street business had weathered round after round of economic upheaval, including the burst of the dot-com bubble and the subprime mortgage crisis.

Year in and out, as countless other restaurants opened and closed on the downtown Salem streets surrounding it, La Margarita has survived.

Today under the operation of Rosales' daughter Xochitl Muñoz and son-in-law Javier Muñoz, the restaurant is pushing through COVID-19.

On Saturday, the family celebrated 36 years in business — three generations feeding Salem, hopeful they make it to 37. 

A burner phone and DIY delivery

The COVID-19 pandemic has brought the restaurant industry to its knees nationwide.

Statewide orders limiting businesses to take-out and restricting sales of alcohol have slashed restaurants' bottom lines and forced entrepreneurs to innovate, an uncomfortable prospect for many restaurant owners, especially those accustomed to a primarily dine-in business model. 

That unknowability, said Xochitl Muñoz, has been difficult, "even for us, even though we've been around for so long. With COVID, it's something we've never experienced before."

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Within 12 hours of Gov. Kate Brown's Stay Home, Save Lives mandate, the Muñozs temporarily laid-off 12 of the 185-seat restaurant's 15 employees. They stripped down to a skeleton crew shifting to take-out exclusively. 

A cozy warren of dining rooms, La Margarita is primarily a dine-in restaurant, the kind of place people go for a casual, cozy meal with a goblet-sized margarita.

Prior to coronavirus, they offered take-out, but it represented only 5 percent of their business.

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This year's pivot overwhelmed their systems.

People started calling earlier and earlier to place orders. "Our kitchen staff would have taken four or five, six orders to-go," Muñoz said. They "would have them all written down because (they) didn't know how to use the POS system." 

So they modified their hours, opening earlier. 

On Cinco de Mayo, Muñoz said, there was a line of socially distanced patrons stretching to the corner of Ferry Street.

"We had 27 voicemails at the end of the night because we couldn't even get to the phone."

So they bought a second "burner" cell phone to give patrons another way to reach them, something they could use to text people when their orders are ready. 

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To avoid losing cash flow to third party delivery services, they started delivering themselves, rehiring staff to make it happen. 

Even though they've reopened their dining room, Muñoz said  "it's been a struggle. We thought, oh people will come back," but they're not seeing anything like their normal traffic. "It's not that they don't want to come back here, they're just not ready to go out in general." 

"We used to do an average of 80 lunches, now it's about 20," Muñoz explained. "We don't have the courthouse, the state workers, they're all working from home." 

"Restaurants don't make a big profit margin as it is," said Muñoz, so the goal right now is simply to cover the restaurant's costs, to pay their staff and to hang on for better times ahead."

"Sometimes that means not paying ourselves so we can pay everybody, but for the most part we've been able to pay all of our bills," she said. 

La Margarita is in a better position than many Salem-area restaurants. They have a dedicated consumer base and they're not carrying the debt that many restaurant owners take on within their first years of business ownership. 

Still, said Muñoz, "it's in the back of your head always; what if this never ends? What if things are this way forever? Everything has changed so much."

A multi-generational restaurant

Pedro Rosales recalls how, on the day in 1984 when he and his then-business partner were supposed to open La Margarita, their landlord stopped by to have lunch.

They told him they couldn't serve him yet because, well, they had run out of money for food. The landlord loaned them enough to get the doors open. 

Since that fraught first day, Rosales, who moved to Salem from Mexico City in 1979, has built La Margarita into a Salem community stalwart. The restaurant has served Salem diners thousands of platters of carne asada and enchilidas suizas.

"That enchilada," Roasales said, "it's like McDonald's, we've sold millions of those." 

Amadeus owner Diana Ramallo is a fan of those enchiladas and a regular guest at La Margarita. 

"This is a hard business," the fellow restaurateur said, "and when you see another place grow and last a long time, it gives you, as a business person, a sense of hope that you can make it as well."

With COVID-19, La Margarita is "going through the same thing we are," Ramallo said, "worried about the bottom line and keeping the door open, but they still greet everyone with such kindness."

Multi-generationality is a feature in the restaurant as well.

Xochitl, Rosales' daughter, began working at La Margarita as a teenager, hosting and busing tables. She met her husband there.

Javier Muñoz started as a dishwasher, then became one of La Margarita's cooks. Now, he's the head chef and Xochitl runs the dining room and manages the business' operations. 

The couple took on leadership of the restaurant when Rosales retired in 2012. Their teenage sons, Matthew and Nicholas, work there, too. 

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It's easy to think of longstanding restaurants as unshakable fortresses built on consistency of food, service and the support of regular guests.

La Margarita has all three, a solid foundation that has kept the restaurant steady in recent years, even during downtown Salem's restaurant boom and increased competition for diners' dollars. But the pandemic's impact has been more profound.

Regulars are part of the family

"When we opened the restaurant we had customers," said Rosales, "those customers became friends, and now they're family."

Restaurant regulars, despite the pandemic, have showed up to support the restaurant. When La Margarita shifted to take-out only, they placed orders and tipped big. 

"They would come in and leave $100 tips, $50 tips,"  said Muñoz,  and say "'Here, this is to split among your staff because we know not everyone is working.'" 

One family friend and restaurant regular wrote a check for five thousand dollars. 

It was a huge morale boost, she said "to know that they cared about us that much."

Carla Aguilar has worked at La Margarita for six years as a host and server. Since they reopened, the dining room business has been much slower than they're used to. But, she said, it's the regulars who are showing up.

The horror stories from other restaurants, customers belligerent about wearing masks, "we haven't had any of that, people have been really understanding."

Even though Rosales isn't involved with the day-to-day operations anymore, "this was his baby for so long, he's still really invested in it even if he's not here," Munoz said.

Rosales chokes up speaking about the support Salem has shown them in recent months, saying "a lot of people came to the rescue."

He attributes regulars' loyalty to La Margarita to its consistency over the past 36 years. It's "the food, the service. All those little things, they count."

Emily Teel is the Food & Drink Editor at the Statesman Journal. Contact her at eteel@statesmanjournal.com, Facebook, or Twitter. See what she's cooking and where she's eating this week on Instagram: @emily_teel