Booming patios mask fragile state of industry

“We just need the industry to turn on, that’s the problem.”

Eugene Honcharuk Owner, Contract Supply

Eugene Honcharuk saw news of patios reopening in Toronto and started making a list. He filled six pages with every available piece of patio equipment in his inventory and waited for the restaurants and bars to start calling.

“I thought, ‘OK all these people are going to call,'” said Honcharuk, who owns Contract Supply, a commercial furniture manufacturer that supplies the hospitality industry in Canada and the United States. But the wave of orders didn't happen.

His company sent out about 20 quotes on furniture in the past week or so, but hasn't received an order. He estimated that his business has made at least $500,000 worth of restaurant furniture over the past few months that's piling up in his Mississauga, Ont., facility, for which he has yet to be paid. Another half-a-million in orders are now uncertain. One client has gone silent on a $300,000 job. He said he had to take out a second mortgage on his home to keep the business afloat, and still has only been able to bring 12 out of 45 employees back to work.

“I wouldn't be talking to you today if I didn't go put a HELOC on my house,” he said. “We just need the industry to turn on, that's the problem.”

While reopened patios could look, from the outside, like the industry turning back on, some restaurant owners and suppliers are cautioning that it is mostly an illusion.

For Honcharuk, a real return to normal could be more than a year away, particularly if restaurants continue to close en masse, flooding the market with a glut of secondhand furniture. Patios are a stop-gap for now, so it doesn't make much sense for restaurants to invest in more furniture, particularly when social distancing rules mean most patios will have less tables than usual.

“You just went through living hell for three months. Why would you spend extra money?” Honcharuk said. “If you know you're just going to do this for a while and you're not allowed to have people come indoors, why wouldn't you put your (indoor) chairs outside?”

As Andrew Oliver, president of Oliver and Bonacini Hospitality, put it: “If you only have 50 per cent of your patio available ... your issue is not furniture.”

Restaurants Canada estimates that a typical restaurant will spend roughly $46,000 to reopen, which is enough to make many hesitate, given their inability to function at full capacity.

“When you figure in the front- and back-of-house staff as well as the additional staff required for higher sanitization standards, the ability to open 10-25 per cent of your business doesn't necessarily add up,” Restaurants Canada spokesman James Rilett said in an email.