When Mercatto first opened in Toronto’s financial district in 1998, it wasn’t trying to become a restaurant empire. It was a small market-style lunch counter with 22 seats, built by two friends with no formal restaurant experience, a modest budget, and a belief that downtown workers wanted better Italian food than the city’s food court culture offered at the time.
Nearly 28 years later, The Alter Ego Group (formerly Mercatto Hospitality) has become one of Toronto’s most recognizable Italian restaurant groups, with restaurants including Cantina Mercatto, Taverna Mercatto, Trattoria Mercatto, La Palma, Bar Prima and Occhiolino under its umbrella. Now, the company has opened its biggest project yet: Mercatto Centrale, an 8,500-square-foot waterfront restaurant in Mississauga’s Port Credit neighbourhood.
But according to co-founder Jack Scarangella, the new opening is less about expansion and more about evolution.
“The new restaurant is really the next step,” he says. “But the story started a long time ago.”
During our conversation at Mercatto Centrale, Scarangella and his wife Marcia took me on a walk down memory lane. Marcia, equally passionate about the business, often recalls key dates and generously supplied archival photos from Mercatto’s beginnings, acting as both storyteller and unofficial historian throughout the interview.
The couple reflects on Mercatto’s early days while sitting inside the massive new restaurant, where soaring ceilings, coastal-inspired interiors and floor-to-ceiling windows overlook the Brightwater waterfront development. Back in 1998, however, Mercatto looked very different.
At the time, Scarangella had been working as a produce buyer and said he felt stuck professionally. Together with his friend Enio De Filippis, they decided to open a small Italian lunch concept in Toronto’s financial core.
“We thought we’d open a small takeout place,” Scarangella says. “Sandwiches, salads, a coffee bar. Not really a restaurant.”
The area was hardly a dining destination at the time.
“There wasn’t much going on downtown back then,” he said. “At five o’clock, you could drive a steamroller down Yonge Street.”
The pair managed to secure a lease from a landlord willing to take a chance on two inexperienced first-time operators. With the help of a designer friend, they built a compact hybrid concept that included a small grocery-style market in the front, prepared foods, coffee and a modest seating area.
“We couldn’t even get a restaurant loan,” Scarangella says. “So we opened as a market.”
Customers, however, cared far less about the grocery shelves than they did about the food itself. The restaurant became busy almost immediately, with office workers crowding the space for sandwiches, pizza and pasta.
“We realized people wanted to sit down and eat,” he says.
The market area slowly disappeared as more tables were added. The original 22 seats became 30. At lunch, customers would stand wherever they could find space just to eat.
Before long, Mercatto had developed a loyal following.
Not long after opening, De Filippis stepped away from the business, and Scarangella’s younger brother, Domenic, joined instead. The two brothers worked tirelessly to keep the restaurant afloat.
“We were paying all the bills,” Scarangella says. “Everybody was getting paid except for us.”
Still, the restaurant gained momentum. Office workers loved it, landlords took notice of the crowds, and Mercatto began building a reputation in downtown Toronto. Part of that came from a playful but controversial advertising campaign inspired by Italian mafia imagery. Friends at a neighbouring advertising agency created witty posters featuring Scarangella and his brother in faux mafia-style scenes. The campaign ran in bus shelters across the city and quickly drew attention.
“We got some backlash too,” Scarangella laughs. “People thought we were stereotyping Italians,” referencing a print piece in The Globe and Mail that took issue with the imagery.
Despite the backlash, the publicity worked. Soon, other landlords began approaching Mercatto about expanding into their buildings and a second location opened at Bay and Richmond, followed by a major turning point: the Toronto Eaton Centre which Scarangella says changed everything.
By that point, Mercatto was busy enough that the founders brought in consultants from hospitality firm The Fifteen Group to introduce systems, menu engineering, and operations support. Consultant Steve Christian became central to the company’s growth, later joining full-time as a partner. In 2011, corporate chef Doug Niegel also came on as executive chef, helping define the group’s culinary direction during a period of expansion. “That’s when we started running it like a real restaurant,” Scarangella says.
As Mercatto expanded, it became part of downtown Toronto’s dining culture. The College Street location thrived near the MaRS Discovery District and hospital corridor, while Taverna Mercatto became a pre-game and concert staple near Scotiabank Arena. Scarangella says consistency kept people coming back: approachable Italian food, generous portions, and prices that still felt accessible.
Many of Mercatto’s signature dishes grew out of family recipes and the founders’ Italian upbringing. Orecchiette with sausage and rapini remains a long-standing staple, alongside the Scarangella family’s lasagna and meatballs, which became closely tied to later projects. The company also became an unexpected training ground for Toronto hospitality talent, with former staff moving on to major restaurants and bars, while others built long-term careers within the group, rising from line cooks and bussers into management, operations, and leadership roles.
Eventually, Mercatto’s expansion extended beyond Mercatto itself. The group partnered on projects including La Palma, Bar Prima, Constantine, and Occhiolino, further cementing its place in Toronto’s restaurant scene.
Then COVID changed everything. Like many downtown operators, Mercatto was hit hard by lockdowns and the collapse of office traffic in the financial district.
“All of our restaurants were in the core,” Scarangella says. “We realized we couldn’t keep all our eggs in one basket.”
The team began looking outside Toronto for the first time in the company’s history. Port Credit, surprisingly, became the answer.
Scarangella admits he barely knew the neighbourhood before visiting the site. “I had no idea what Port Credit was,” he says, laughing.
But once the team saw the waterfront and the Brightwater development, they were sold. “We fell in love with the lake,” he says.
The building also stood out. Designed with dramatic cedar elements and a wave-like exterior, it immediately felt different from the group’s downtown locations. “It had really cool bones,” Scarangella says. What began as plans for a portion of the space eventually grew. “We said, ‘We want the whole building.’”
Now open inside the Brightwater waterfront community, Mercatto Centrale is the group’s largest restaurant to date, seating nearly 300 guests across indoor dining rooms and a sprawling patio.
Despite its scale, Scarangella says the company still operates with the same family-oriented mentality that defined the original location nearly three decades ago.
Family members continue to work across the business, from restaurants to accounting and operations, while longtime staff remain deeply embedded within the company.
“People think it’s this massive company now,” Scarangella says. “But it’s still family.”
That sense of familiarity, he adds, may be what has allowed Mercatto to survive nearly three decades in one of the city’s toughest industries.
What began as a modest lunch counter built by two friends with no restaurant background has evolved into one of Toronto’s defining Italian hospitality brands, now expanding beyond the city that built it.
