How Canada’s Ninety-Three Billion Dollar Service Industry Is On Track To Losing Nearly Twenty Billion Dollars In Sales.
Across Canada, COVID-19 related closures and lockdowns have impacted all businesses, but the foodservice industry remains the hardest hit. Since the beginning of the pandemic the industry has lost an estimated $4 billion Dollars in sales and if things do not get better, Restaurants Canada estimates that loss to increase to $20 billion dollars.
According to Roberto Sarjoo at Restaurants Canada, foodservice sales tumbled by a staggering 61% at the beginning of the pandemic in March and April 2020, marking the lowest monthly foodservice sales in over two decades. Further, Sarjoo says initial estimates show roughly one in ten establishments or nearly 10,000 restaurants, caterers, and drinking places across the country permanently closing due to COVID-19.
Future Projections
In the latest article by Chris Elliott, the Senior Economist at Restaurants Canada, the first quarter of 2021 is set to repeat the same trend as 2020. Elliot estimates a projected fall of 22.9% in foodservice sales in a year-over-year basis.As for the rest of the year, Elliott says “hope is on the horizon”, adding that sales will steadily increase, if the estimate by Canadian Health Officials to have most Canadians vaccinated by the end of the year is followed through.
He stresses the future of the industry is very dependent the timing of the vaccination roll out and on current and future lockdowns to come. Elliot says, annual sales are expected to grow to $62.9 billion and while that is an increase from 2020 the foodservice industry will still be 18.3% below foodservice sales recorded in 2019.
Struggling To Survive
The Grille, an independent restaurant located on the Queensway is one of the many, directly impacted by the pandemic. Jim Parthemos, the owner of the restaurant says because of COVID-19 related shutdowns, his restaurant has lost over seventy percent of business and as a result 80% of staff.
“It's not nearly as busy as it used to be. Not even near the numbers that we used to make at all” – Jim Parthemos
Before the Pandemic, Parthemos says the average wait time to be seated at The Grille on any given day was more than twenty minutes, serving close to a thousand people daily. Now, he says with the uncertainty of the current lockdown and possible ones to come in the future, he is forced to rely on takeout orders, which only brings in 20% - 30% of pre-pandemic sales, before service fees are discounted. Between paying for business expenses such as rent and produce; Jim adds that these sales are not enough to carry the restaurant throughout the pandemic.
In Canada, over $600 Million in federal assistance funds were announced to help independent establishments amid the pandemic. This included subsidies such as wage subsidy, rent subsidy, and a small business loan of $40,000.
"I applied for government loans when it first came out" - Jim Parthemos
Jim says he applied for the government loans as soon as they came out, noting he has had to apply for all federal subsidies to make it through the first year of the pandemic. Sadly, Jim is not alone, over 64% percent of all restaurant owners in Canada have had to apply for federal assistance funds, in order to survive amid the pandemic.
Despite this, a quarter of restaurant owners deferred rent and mortgage payments at some point between March and January. Moreover, 28% of restaurant owners have had to lay off staff and 40% have had to work with reduced hours and staff shifts.
For Jim, he tells me his restaurant that would otherwise be a forty-person operation is now down to nine people, “…you can understand the loss at that point where you don't need twenty-nine other people to be working”.
With the most recent state of emergency adding another drop in sales, for Jim and many other restaurant owners in the GTA, government loans and subsidies will not be enough to keep them open throughout the year.
Jim says “It's unfortunate how COVID-19 and it's impact has made thinking to go inside and eat is not safe…we’d like to make sure the customer feels safe…last thing you want is anyone getting sick out of The Grille.” For now, the reality of restaurant owners like Jim Parthemos and the many others across Canada remains uncertain for the future months to come.
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