Restaurateurs, shopkeepers face an impossible situation
TORONTO, Ont. — If it weren’t for the pandemic, Paramount Fine Foods would be hosting office parties, selling gift certificates and fulfilling big catering orders for holiday get-togethers.
The Toronto-based chain of Middle Eastern restaurant franchises typically expects to make the equivalent of five months’ worth of sales in a little more than the seven weeks between mid-November and early January.
Restaurants and retailers have relied on that holiday rush to make it through the rest of the winter, when sales dip to their lowest.
But after more than 10 months of limping through evolving pandemic safety restrictions on indoor gatherings, this holiday season is shaping up to be historically slow for many businesses as new lockdown orders take hold in places such as Toronto and neighbouring Peel region.
“We’re not going to have any fuel going forward in cash flow for January and February,” Paramount’s chief executive Mohamad Fakih said. “Every restaurant company has thrown profit out of the window since the beginning of the pandemic. All that they’re trying to do is to keep up with their bills, without any entrepreneur or franchisee taking a penny home.”
Small-business advocates are warning that the retail and restaurant sectors could be looking at a wave of mass closures without a solid holiday shopping season or an additional influx of government aid.
“This is really a do-or-die moment for many in the retail sector and, of course, in the hospitality sector,” said Alla Drigola, director of parliamentary affairs at the Canadian
Chamber of Commerce. “We’re heading into what should be typically the busiest time of the year for retailers, particularly small and medium-size ones. And with the lockdowns that they’re facing across the country, many are actually looking at permanent closures.”
Drigola echoed concerns voiced by several industry insiders on Monday about the ability of big-box retailers to remain open, because they sell groceries, even though they also sell clothes, electronics and other common gift items, while small businesses are forced to close.
She said most small- to medium-size retailers and restaurants are coming into the season “holding on by a thread” and called for governments to intervene with additional subsidies to prop up failing businesses.
“We could be looking at business closures. We could be looking at mass layoffs,” Drigola said.
Restaurants Canada, a major trade association for the hospitality sector, said the expected lost holiday revenues is not the only blow to restaurant operators across the country.
Todd Barclay, the association’s chief executive, said restaurateurs have already invested thousands of dollars in Plexiglass shields and heated outdoor patios to stay operating through the holiday season.
“It’s not just the dollars that we’re missing out on … it’s the dollars that have been spent in order to keep people safe,” he said. “This is when you fill up the coffers in order to survive through the bleakest times in January and February.”
Barclay also said the rapid fluctuation in dining restrictions have proven costly for restaurants. For example, Ontario’s most recent lockdown announcement for Toronto and Peel came on Friday and went into effect on Monday. Stocking a kitchen, he said, can cost anywhere between $5,000 and $30,000, depending on the size of the restaurant.
“Imagine being told on a Friday, after you’ve filled up your fridge and freezer with food, that 90 per cent of your business is going to go away in 12 to 48 hours,” he said. “We want to be part of the solution. However, this on-again, off-again is just devastating.
Barclay said the industry doesn’t want to do anything that is considered unsafe, but would like to be part of any decisions that directly impact it.
“And stop saying that restaurants are a problem when you don’t have data to support that,” he added.
At Paramount Fine Foods, 17 of its 69 Canadian locations are in Toronto and Peel region, but Fakih said his business is roughly comparable to last year’s revenues due to added sales from two takeout brands — one for fried chicken, one for pizza — that the company launched using some of its existing kitchens as a way of tapping into new consumption habits.
Still, the pandemic is continuing to drive down sales, particularly in urban areas.
“Paramount has locations outside the lockdown area, and those locations are doing better,” he said. “Downtown is gone. You keep hearing every day about locations that are closing in downtown Toronto.”
For example, the Paramount Fine Foods outlet at Toronto’s once-bustling Union Station was hitting roughly $8,000 in sales each day before the pandemic. Now, it’s close to nothing.
“We’re doing $300 a day,” Fakih said.