More restaurant closures likely without additional COVID supports: industry

VANCOUVER (NEWS 1130) – Thousands of restaurants in Canada will likely have to close this year if the Delta COVID-19 variant doesn’t slow down and if customers don’t return, according to the industry.

Eateries have been struggling over the past 18 months, and many have already been forced to shutter due to the financial challenges created by the pandemic.

As case numbers start to rise once again, mainly fuelled by the more transmissible variant, there are concerns for businesses as we head into the fall and winter, and as modelling shows the fourth wave could explode if more isn’t done to slow the spread.

“I guess we’ve got a situation, and our most recent survey explains that. We’ve still got 80 per cent of the industry that is really not making any money — in fact, 55 per cent are still losing money, and that’s with the … various government supports,” explained Mark von Schellwitz, vice president at Restaurants Canada, adding only about 20 per cent of restaurants are breaking even.

“Only nine per cent of our industry right now is making a profit of about two per cent.”

A dire prediction from @RestaurantsWest amid the Delta variant/fourth wave. He says thousands of restaurants may close for good by the end of 2021. He says they need more federal help, customer confidence and to address the ongoing labour shortage. Details on @NEWS1130.

— Sonia Aslam (@SoniaSAslam) August 20, 2021

Von Schellwitz says there’s a lot of fear and trepidation among restaurant owners across Canada, adding there’s a big “debt hangover.”

“We’ve got 25 per cent of our members that are saying if conditions don’t improve, they’re not going to be able to repay their debt and they will have to close down in the coming months,” he told NEWS 1130. “Certainly, what we don’t want to see happen is a second wave of closures to go along with COVID.”

He commends businesses that have been on top of COVID-19 safety plans, adding everyone is just eager to get back to the way things were before the pandemic.

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Many restaurants have been struggling since the spring of last year, when closures and other restrictions were brought in across various provinces in an effort to limit the spread of COVID-19.

In places like B.C., spikes in cases led to another set of tight restrictions around the service industry earlier this year, putting even more of a strain on businesses that have been struggling to make ends meet.

“With the fourth wave, there’s obviously a lot of fear and trepidation. Are we going to go back to those restrictions? And if we do, many of them are telling us that they are just going to close,” said von Schellwitz. “It’s just been too long, especially in a low-margin industry like ours. You can’t keep losing money month, after month, after month, before finally closing your doors.”

Restaurants Canada is calling on all parties seeking to form the next federal government to help hard-hit foodservice businesses recover from their pandemic debt so they can continue #FeedingTheRecovery.

Learn more: https://t.co/aKGsdhdATD

— Restaurants Canada (@RestaurantsCA) August 19, 2021

Closures would not just have an impact on the businesses themselves, but also on the job market, says von Schellwitz.

“There are some real fears out there,” he said.

With the federal election campaign underway, Restaurants Canada on Thursday called on parties to help the foodservice sector.

It is asking for “survival support,” which includes keeping pandemic-implemented wage and rent subsidy programs in place for members, as well as partial forgiveness for all government-backed loans; “relaunch measures,” including an expansion of the “meals and expenses” business tax credit, and a national dining rebate program; “labour development” initiatives; and a “do not harm approach to taxes and red tape.”