Following a barrage of pandemic lockdowns and closures, restaurants in Canada are still not out of the woods, despite the fact mask mandates have long since been lifted and life has seemingly returned to ‘normal’.
According to a recent report from Restaurants Canada, over the past year restaurant closures have outpaced openings by 43% and inflation-adjusted food service sales will be around 11% below 2019 levels by the end of this year. The report also indicates traffic in full-service outlets is down nine per cent, and approximately down five per cent for quick service ones. However, according to the report sales could still surpass the $100 billion mark, which is encouraging.
But getting to that level could be difficult say restaurant owners, taking into consideration ongoing labour shortages and supply chain issues.
“If I were to sum up state of the industry in one word, it would be ‘tired’, especially for independently owned and operated restaurants like my location,” says David Kroeker, owner of Zoup! on Hespeler Road in Cambridge. “It’s been a struggle and it’s kind of come in waves as well.”
Matt Rolleman, co-owner of Thirteen at the corner of Water and Main streets in Galt, agrees and wonders what the impact COVID-19 will have in the next few months, especially for the Christmas bookings he already has in place.
“In the back of my mind and for a lot of business owners in general is we’re hoping there won’t be another wave like before,” says Matt, noting he’s optimistic vaccines and boosters will lessen the severity of any potential impact. “But it might be a wave of staffing issues with staff getting sick with COVID. I think we’re still in this really precarious situation and are worried about COVID-19, even though people are treating things like it’s all back to normal.”
Staffing levels an issue
When it comes to current staffing levels, restaurants nationwide are finding that retaining staff continues to be a major hurdle. Restaurants Canada estimates the sector has had between 150,000 and 170,000 vacant positions for some time and currently employs 271,000 fewer people prior to when the pandemic hit in 2019. This has resulted in many restaurants to alter the way they operate, perhaps opening fewer days a week or closing earlier.
“Staffing retention is a huge thing right now that all businesses, and especially restaurants, have to look at,” says Matt. “But restaurants are pretty much drawing from a very similar pool of people and there’s all these restaurants vying for the limited staff that’s available.”
David agrees and says even the recent minimum wage hike to $15.50 won’t really help the situation.
“At the end of the day we’re not helping our employees because everyone is jacking up their prices and everything is costing more,” he says. “It’s a vicious circle.”
Supply chain problems
Like most restaurant operators, David says supply chain issues also remain a big concern. As prices on the menu increase with inflation, the number of food choices has decreased in some restaurants resulting in them offering only a few dishes on any given day to provide more predictability for the back-of-house staff.
“The supply chain has essentially fallen apart in my opinion,” says David. “I spend at least five to 10 hours a week just looking for alternative products so we can keep a full menu.”
He says customers service has remained his No. 1 priority and says it can be difficult having to explain to patrons about the challenges he faces if something they order is not available.
“I’m so grateful for our client base because 99% of our customers are absolutely fantastic and they get it,” says David, adding the solution needs to come from all levels of government, especially when it comes to custom issues at the border.
“At our distribution centre there is so much backlog right now they have to make reservations for trucks to show up to receive goods,” he says, noting the Bank of Canada’s decision to increase the prime lending rate to combat rising inflation and the Province of Ontario’s minimum wage increase are working against businesses.
“It’s different levels of government not working together, and they are actually impacting the long-term situation in Ontario,” says David.
Impacted by loans
Like many restaurant operators, both he and Matt utilized the Canada Emergency Business Account during COVID-19 and while that may have assisted during the cycle of lockdowns and re-openings, they worry about the overall financial impact.
“We took on some stuff that we never would have done before,” says Matt, adding business was ‘rolling’ before the pandemic. “I had never planned on taking those extra loans. There’s a lot of businesses that have taken on loans so hopefully when winter hits we don’t see a big recession because it’s going to be hard on a lot of businesses.”
He says having Main Street closed to traffic during the summer was great for his outdoor patio and is optimistic that come next year people will continue to look at staying closer home due to higher costs.
However, Matt expects that people’s dining habits will change.
“Restaurants are a luxury. I’m anticipating that people who dine out once a week may switch to once a month, and those who come once a month might switch to once every two or three months,” he says, adding there is little that restaurant operators can do when it comes to combatting supply chain issues and rising interest rates. “It’s a little daunting for sure.”
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