Alberta restaurants coming back to life but inflation, staffing challenges remain

The restaurant and bar industry in Alberta spent two years in free fall due to the pandemic, but recovery is on the menu just in time for summer.

Statistics Canada released its monthly survey of food services and drinking places earlier this week and the receipts for the sector through April have exceeded pre-pandemic levels.

Tyrell Crews, head trainer at 8th Avenue S.W. restaurant Saltlik, said the biggest difference has been in consistency in customers, staffing and just the buzz and energy downtown.

“I think the biggest thing there is it definitely feels like we have this new-found connection … with our community,” he said. “When you feel that downtown is vibrant, you can walk out on our patio and look down Stephen Avenue and see everyone's having a great time, people are smiling — getting back to this place of quote-unquote normal is a pretty fantastic feeling.”

The report showed seasonally adjusted receipts rose $36 million (4.2 per cent) to reach $886 million in April. Unadjusted receipts through the first four months were up to $816 million (35.1 per cent) year-over-year. Inflation did play a small role in the revenue numbers but the price on menu items only increased by three per cent.

Ernie Tsu, president of the Alberta Hospitality Association, said the report is positive but the numbers are not truly reflective of reality.

He said the report does not really put into perspective the hole dug over the last two years and how the different restrictions like curfews and shutdowns hit restaurants.

The report also does not take into consideration how inflation has crushed their bottom line at every turn from utilities, shipping, taxes, insurance, food costs and basically every other input.

Statistics Canada's latest report on inflation had the rate at 7.1 per cent for the year in Alberta — its highest increase since 1983 — and at eight per cent in Calgary.

“Those numbers are completely skewed,” said Tsu. “They're promising, yes, it's great to see public support back in restaurants. But by no means is it accurate.”

Annie Dormuth, Alberta director of provincial affairs for Canadian Federation of Independent Business, said their latest business barometer was also showing positive signs of growth through April. But she expects a drop of five points in business performance nationwide in the new report next week.

“A lot of economic uncertainty still remains for the rest of the year,” she said, pointing to the impact of inflation. “How businesses are coping with all of this is definitely putting quite a bit of challenge on them.”

Still, according to Cindy Ady, the CEO of Tourism Calgary, it is a much needed stroke of positivity for an industry that has been suffering.

She says pre-pandemic, tourism in Calgary was a $1.8 billion a year business and one in 10 working Calgarians was in the sector, but that was almost completely wiped out over the last two years.

She pointed to hotel occupancy rates in the downtown last year that bottomed out at six per cent.

“It's been all heading in right, positive directions,” said Ady of the last few months. “But when you base it off of where we were a year ago … everything's up from there, right?”

The recovery was aided by NHL playoff runs by the Calgary Flames and the rival Edmonton Oilers in May. Spending peaked during the second round Battle of Alberta as restaurant and bar owners saw receipts climb with each game, according to Moneris, the large payment processing company.

This has primed the sector for the return of the first full Stampede since 2019.

Jim Laurendeau, vice-president of park planning and development for the Calgary Stampede, on Tuesday said they are preparing for one million people to come through the gates this year.

Tsu said he is expecting this to be the best Stampede from a numbers and energy perspective in the last 12 years, but it is just the first step towards recovery.

“One event or one playoff run does not equal 24 months of losses,” he said.

Perhaps the biggest hurdle in recovery across the sector is staffing. The latest labour force numbers, out at the beginning of June, had the hospitality sector still 15 per cent behind pre-pandemic levels in Alberta.

Tsu estimates in Calgary those levels are closer to 20 per cent while in Bow Valley and Banff it's closer to 30 per cent or higher.