National Post (National Edition)
Inside the fall of a family restaurant.
`The darkest days of this pandemic are ahead of us'
Anna Lewis went to a birthday party in 1978 at a restaurant near the campground in southern Ontario where she was staying. It was raining and her clothes were wet, but a friend insisted it wasn't a fancy party so she shouldn't worry about that. Once inside, she discovered the other women were wearing long gowns, necklaces and earrings. The friend who invited her was in a three-piece suit.
Benny Beck was the only other person at the party wearing jeans, and he went to talk to Anna after she ducked into a quieter room. The two kept talking after the party, almost every day on the phone. Both had kids from a previous relationship, both loved cooking, both were Danish immigrants — though virtually everyone at the birthday party was Danish, since the restaurant and campground were part of a Danish cultural centre in the countryside north of Hamilton.
After they got together, the couple spent summers with their big, blended family in a trailer parked at the campground. They talked about quitting their jobs in Toronto and opening a restaurant. In 2000, the restaurant on the Danish centre's property came up for lease and the pair took it over and moved into the apartment upstairs.
“It was time to either do it or be quiet,” she said.
The restaurant was in a 19th-century home on a 50-acre estate in tiny Puslinch, Ont. They served homestyle dishes from Denmark. They hosted and catered Danish weddings, anniversaries, christenings and funerals, sometimes all for the same family. The restaurant used to be called Sunset Villa, but whenever people called in for reservations, they'd double check: Is this the Danish place?
“Finally, Benny and I said, 'We're changing the name to The Danish Place,'" Anna recalls.
The pair cooked and catered at the Danish Place for nearly 20 years and stayed involved after the next generation of their family took over. But since the pandemic hit in March, the Danish Place, like thousands of other restaurants and bars in Canada, has been in a downward spiral.
The restaurant has not been able to run a large wedding, funeral or any big function. It hasn't been anywhere close to capacity for lunch or dinner, either. And building a trade in takeout from a compound in the woods was never a viable option.
The crisis in the restaurant industry is often described by how enormous it is. The latest estimates put the number of closures since March at far more than 10,000 establishments, though the real count is almost certainly higher.
Restaurant advocates warn that this winter will be even more destructive for the sector than the early shutdowns last spring, since anxiety over COVID-19 is once again rising and patios are closing.
But what's easy to miss in all the talk of mass closures, public health restrictions and government subsidies is that this is a crisis playing out thousands of times over, one flailing restaurant after another, each a protracted and painful time for the people who built that business.
For two decades, Benny Beck drove around southern Ontario looking for ingredients. There was a bakery in Toronto that had the right kind of rye bread for openfaced sandwiches, and a fishmonger in Woodstock who sold eel.
He and his wife, Anna, did most of the baking and cooking at the restaurant they owned.
“Our theory always was: If it looks heavy, it's Benny's job,” she said.
They took their breaks together, smoking outside the back door. Even when Beck was shopping, Anna would sometimes catch herself lighting two cigarettes out of habit.
But after a car crash six years ago, it started to become difficult for the couple to stay on their feet for 10 to 12 hours a day. They wanted to retire and their kids took over the restaurant in 2018.
Kristine Mathers, along with her brother Jacob Beck and his partner, Joanne Moyes, spent roughly $80,000 renovating the restaurant between 2018 and 2019. They brought in new furniture and shiplapped walls, replaced fixtures, refinished the wood floors and updated the kitchen.
“We painted every single inch of that space,” said Mathers, who has worked at the restaurant since she was 17.
They also used an agency to update their marketing for a younger demographic. By the time the pandemic hit, they said they had paid off $60,000 of their initial investments.
Their parents never really left the restaurant, Mathers said. After the place switched hands, her mom still came in to bake the layer and meringue cakes. Her dad still drove around picking up ingredients.
Mathers found that her dad had a way of just glancing around the dining room and knowing what it needed.
“He'd just pop down all of a sudden and be like, `Kristine, do you need ice?' And I'm like, `Oh wow, dad, yeah I do need ice,'” she said. “He'd just be, `Oh yeah, I figured it was busy enough.'”
The restaurant closed for two months after Christmas 2019, since January and February were historically slow. It reopened in March and they had two decent weeks before the economic lockdown orders came in because of COVID-19.
“We took out our first loan the first week,” Mathers said. “We're slowly watching that loan go down and absolutely no money come in.”
Through the spring, the restaurant crept further into debt. The siblings opted to take the federal government's interest-free $40,000 loan. They applied for the federal wage subsidy program, too.
Still, by the time the restaurant
reopened in July, the owners said it was roughly $70,000 in debt.
“We racked it up pretty quick,” said Moyes, who manages the books. “We basically have carried seven months of debt of just running this business with no money coming in.”
They tried to run leaner. They reduced employee hours. They tried offering takeout, but few customers were willing to make the long drive to the restaurant. They cut the expensive items from the menu — steaks, shrimp, scallops, eels — so they didn't lose as much when inventory rotted.
“The only way a restaurant makes money is if they run at full capacity and you can turn and turn and turn your tables,” Moyes said. “It's a ghost town. How can you make anywhere close to the money that you need?”
After restrictions eased in the summer, they were able to use 36 of the 120 possible seats inside and 20 seats on the patio. Moyes said sales were down by 75 per cent from the previous summer, hit especially hard by the disappearance of catering events.
The restaurant managed a profit in just a single month this year, making $2,000 in September.
“We've incurred a substantial amount of personal debt to try to make it through,” Moyes said. “Where's the money going to come from? The next step is to sell our homes.”
The hard truth for the restaurant industry is that this summer's bustling patio season gave the illusion of success. Even with full patios, most restaurants were only breaking even at best, because they were still well below normal capacity but saddled with the same costs.
A recent forecast by trade association Restaurants Canada suggested that hospitality sales will not rebound to pre-pandemic levels until 2022.
Chris Elliott, a senior economist at Restaurants Canada, said the best gauge on closures so far is Statistics Canada's bi-annual business register, the latest instalment of which doesn't come out until next month.
But by consulting with major restaurant suppliers, Elliott said the best estimate is that more than 10,000 had already shut down as of August, or roughly 10 per cent of the 98,000 restaurants, bars and caterers that were operating before the pandemic. That number is likely much higher today and will be even higher tomorrow.
“The darkest days of this pandemic are ahead of us, not behind us,” said Andrew Oliver, chief executive at Oliver & Bonacini Hospitality Inc. and one of the most outspoken industry advocates and critics of the federal government's small-business subsidies. “Now you have a situation where strong guys are going to fail.”
After nine months of major sales declines, many restaurants are limping into winter without any savings left and no one is willing to lend them any more money, said Oliver, whose restaurant empire includes Canoe, the famed Bay Street haunt in Toronto.
Some restaurants are trying to hang on.
At Roux Bistro & Bar, a southern food restaurant in Toronto's Junction neighbourhood, chef and owner Derrick Markland figures he needs to make roughly $450 a night to cover his costs. But with no more patio traffic and indoor dining banned in Toronto until restrictions lift, he isn't making that.
“Last night was basically maybe three orders,” he said in mid-October. “I can't take on the loss forever. I know that. I've got my wife telling me, `Listen, you've got to shut this thing down.' But at the same time, I have this overwhelming idea that it's going to get better soon and it's going to work out.”
In the middle of October, Jacob Beck, Joanne Moyes and Kristine Mathers were at the bar in the Danish Place looking at their reservation book for the weekend. It was grim. “There might have been less than 10 reservations,” he said. “And a lot of those actually cancelled, because people were being encouraged to stay home and not go out.”
The Danish Place was not in one of Ontario's designated COVID-19 hot spots, so it didn't have to shut down indoor dining in October as did restaurants in Toronto, Ottawa, and Peel and York regions did. But elevated public health concerns, as the province lurched into a second wave of infections, kept customers away.
“We came to the point where we're not willing to give up our homes in order to sustain this business,” Moyes said.
Their landlord, the notfor-profit Sunset Villa Association, had stepped in and raised $138,000 through a GoFundMe campaign in the summer.
They came to an agreement that the club would dole out chunks of the money to help prop up the restaurant through the pandemic. If the restaurant couldn't last, the payments would essentially amount to the club buying the business.
By October, the club had paid out $97,500 to the restaurant and it still was struggling to break even.
The partners couldn't see a way out. They worried they would burn through the club's money and be right back in the same place: struggling along with a few customers and piling up more personal debt.
“We didn't want to leave the club in a lurch,” Beck said.
Instead, they decided to break their lease. As per the agreement, the club bought the restaurant's name and furnishings for $1, and took over its lease on the kitchen equipment.
Next, they had to tell their parents. Mathers said the phone call was simple. Her parents knew it was coming.
“My dad magically knew that I needed ice. He also knows, just by looking, what's happening,” she said. “They're very seasoned at this.”
The owners announced their decision and were flooded with reservations in their restaurant's final two weeks. Mathers didn't have much time to think deeply on what was happening, to be 38 years old and starting over, walking away with her one-third share of the restaurant's total debt.
“I've worked there for more than half my life now,” she said. “I'm pretty terrified.”
The calls kept coming in the final week. By lunch on Nov. 1, the final service, the kitchen was running out of ingredients. Mathers was crossing items off the paper menus: no more liver pate sandwiches, no more lemon mousse, no more Carlsberg tall cans.
They weren't taking credit or debit, because they didn't want to pay the bank for a whole month of the service, and the ATM was down, so they took e-transfers.
Benny Beck was out buying more bread and Anna was in the kitchen, standing over plates of open-faced sandwiches.
“Who has three hands?” she called out to a group of servers.
Jacob Beck, who took over the kitchen when his parents retired, made a point of leaving his post to walk around the dining room.
“What I find most difficult is just realizing how many of our customers are going to miss it just as much as I will,” he said, tucked in a hallway off the kitchen beside a line of white cakes. He started to cry.
“Just trying to get through the day,” he said. He went back to work.