Restaurants feeling the heat of reopening
Eateries forced to increase costs to reopen safely, making diners reluctant to eat out
Most restaurants in Canada are losing money even as the economy restarts, while more than a third where dining is now allowed on the premises say reopening has had a negative impact on their businesses, according to a survey by Restaurants Canada.
“Restaurants are eager to open up the on-premise portion, yet not all restaurants have enjoyed a boost in sales,” said James Rilett, the vice-president for central Canada for the national industry association.
Restaurateurs face reopening costs amid protocols to control the spread of COVID-19, he noted, including paying for non-medical face makes and other protective equipment, sanitation materials and Plexiglas barriers in some cases. As these costs emerge, a majority of Canadians expressed a reluctance to return to dining out in a recent Angus Reid poll, although 64 per cent said they have ordered food at least every two weeks from a restaurant.
“These are early days,” Rilett said. “After being at home for so long, it will take some guests time to come back out.”
The restaurant association, which has more than 30,000 members, received 940 completed responses from food service operators representing 14,129 locations for its June 1 to 7 survey, with the data suggesting that full-service restaurant chains are having more success than independents.
For single unit independent operators, 52 per cent saw a negative impact in the early days of opening compared with 37 per cent of chain restaurants. “It’s possible that the larger chains have the marketing resources to get the word out that they are open, whereas the public may not be fully aware that their local independent restaurant is now open,” Rilett said.
The survey results released Thursday show that among respondents whose operations are open for takeout or delivery only, or who are offering dine-in services under new restrictions, six out of 10 are operating at a loss. Twenty-two per cent of single-unit operators and 15 per cent of multi-unit operators said they are just breaking even. Among restaurants that have reopened their doors for on-premise dining, fewer than half said doing so has had a positive impact.
After months of significantly reduced
revenue, or none at all, and now facing months of operating at reduced capacity, many restaurants need continued federal government support, said Shanna Munro, Restaurants Canada president and CEO.
“Our industry wants to contribute to rebuilding the economy and reviving neighbourhoods, but time is running out. Most restaurants have been accumulating debt for three months already. If they don’t get the help they need to return to positive cash flow, many won’t be able to last much longer.”
Restaurants Canada is calling for the federal government’s 75 per cent wage subsidy to continue until food service operations are generating enough revenue to survive without support, and for it to be reduced gradually rather than end at an arbitrary date. It also wants more flexibility in the assistance threshold of 30 per cent revenue decline and for Ottawa to work with the provinces to help ensure a moratorium on commercial evictions in every jurisdiction.