With reduced staff and increased food waste, local restaurants offer subscription services and limited menus to keep revenue coming in
It has been a crippling year for nearly every industry; especially the restaurant industry.
According to Statistics Canada, full-service restaurants in Canada took an approximate 80 per cent hit at the start of the pandemic and have never truly recovered, now hovering around 50 to 60 per cent of their pre-pandemic revenue.
This has led to many industry shifts, including a focus on outdoor dining and delivery services.
In light of this, the City of Guelph has renewed the extended patio program downtown for the next three years, meaning for the next three summers, patio-goers can expect a repeat of the vibrant patio scene we saw last year.
However, city council reached a compromise for the road closure, deciding to only close the intersection at Wyndham and Macdonell on weekends.
Marty Williams, executive director of the Downtown Guelph Business Association, explained that while the road closure will only be happening on weekends throughout the summer, the extended patios all over downtown will be in parking spots and drive lanes throughout the week.
So the extended patios will go out onto the road, but will leave enough room, about 23 feet, for one-lane traffic in both directions. “It’s a very small reduction,” Williams said.
“We’ve been incredibly lucky in our ability to transition most of our business to takeout and our new meal kit and subscription service, but we feel for so many restaurants who rely on their dining rooms as their main source of revenue.”
— Khalil Khamis, Crafty Ramen partner and CEO
While this was reported to be a controversial decision, in a survey conducted by The Ontarion on Twitter, 80 per cent of respondents were happy with the compromise, as well as all of the restaurant owners and partners we spoke with.
“I like the new hybrid program,” said Court Desautels, group leader and CEO of the Neighbourhood Group of Companies, which owns several restaurants, including Miijidaa and The Wooly.
“I think the downtown businesses, especially the restaurants, are able to thrive with the closures, and I enjoyed seeing less cars going downtown, but it does have an impact on some of the other businesses.”
While Statistics Canada reports the average restaurant is hovering around 50 to 60 per cent of their normal sales volumes, Desautels says in the summer it could range from 50 to 80, so he is optimistic about the patio season.
However, during lockdowns, Desautels said revenue can drop to a 90 per cent loss. Even with those losses, expenses remain the same due to utilities and rent, so owners have to come up with that money somehow.
To adapt to these struggles, some restaurants have turned to creative ways of increasing revenue.
For example, Crafty Ramen, like many other local restaurants, had to shift from a primarily dine-in restaurant with around 10 per cent of revenue from takeout, to a 100 per cent takeout model.
“Initially the uncertainty was scary; our restaurant locations, especially our original space in Guelph, have a really warm, welcoming, and homey vibe,” said Khalil Khamis, Crafty Ramen partner and CEO.
“That feeling is a big part of who we are, and it’s really been important to us that we find ways to keep people connected to that.”
They have managed to adapt well by offering takeout, at-home ramen kits, as well as ramen subscription boxes. This has allowed them not only to mitigate inventory loss and keep all their staff on, but hire new people as well.
“Our subscription service was not something we’d ever planned on pre-pandemic,” Khamis said. “We were intending to eventually sell a couple key market items at some point, maybe five years down the line, but never the DIY ramen kits as they’ve taken shape.”
They now have over 800 people signed up for a ramen subscription and are shipping to over 40 cities in Ontario. Khamis says this has been an entirely new avenue of growth for them, but one that has allowed them to stay focused on their main purpose: connecting to people in meaningful and impactful ways.
“We’ve been incredibly lucky in our ability to transition most of our business to takeout and our new meal kit and subscription service, but we feel for so many restaurants who rely on their dining rooms as their main source of revenue,” Khamis said.
To help minimize close contact between staff and guests for the summer, Khamis says their team is working on a contactless ordering option so people can place and pay for orders directly on their patio tables.
As for supporting them during the lockdown, Khamis said “our only hope is that people continue to do whatever they can to support local businesses; we need our communities more than ever. The best way would be to visit one of our local retail partners to try out our ramen kits and give them some love at the same time.”
It’s important to note though that Crafty Ramen’s innovative ability to adapt to the pandemic is the exception, not the rule. Along with the financial struggles most restaurants are experiencing, there is also a distinct loss of staff.
In fact, by May, Restaurants Canada reported that the unemployment level reached 13.7 per cent, the highest rate recorded since 1967. While that number has somewhat recovered, they reported the industry was still around 319,000 jobs below their pre-COVID levels in February 2020.
Only 48 per cent of the lost jobs in the industry have been recovered as of February 2021, compared to 88 per cent in all other industries.
Vienna owner James Sawyer has gone from a staff of 15 to three people, and has had to continuously hire them back and lay them off again with the repeated lockdowns and reopenings.
Desautels said they’ve laid off a total of 150 people at their restaurants.
Each time the restaurants have to close — even for takeout — they are selling significantly less, and end up with an excess of food products that they either give to staff or donate, if a charity is willing to take it.
“I wish I could hire them all back, and the sad reality is I can’t hire them all back, and that’s not because of pandemic, that’s because they’ve left the industry,” he said, adding that people are leaving the industry because they can’t rely on it anymore.
“The impact on the business is great financially, but the long-term effects on people’s mental health and whether or not this is an industry they want to be in, knowing what they were put through is going to be something that will require just as great of a recovery.”
Desautels added that it’s been especially difficult to plan ahead because of the confusing messaging from the government.
Earlier in March, Guelph had moved from red zone to orange zone, and was in orange for about two weeks before the province-wide shutdown was announced. Desautels said the move to orange “seemed like it was too fast and too soon and 12 days later we’re fully shut down and are sitting on a lot of inventory.”
Each time the restaurants have to close — even for takeout — they are selling significantly less, and end up with an excess of food products that they either give to staff or donate, if a charity is willing to take it.
Desautels estimates that it costs around $10,000 to reopen, “from food, to training; and that’s not to mention the infrastructure people put into patios as well.”
“I had, let’s say, like $200 in oranges and then like another $300 in eggs and $400 in potatoes, and on such short notice, I have to get rid of it, donate it or give it away,” Sawyer said, adding that “it’s hard with all the restrictions because people aren’t taking a lot of the donations right now, so it’s been a little challenging with the food waste.”
For Sawyer, it’s not worth it to keep the restaurant open during the lockdowns because of the nature of the restaurant. “At places like mine, an old school diner, people come for the service and sit down,” he said.
To adapt to the chaos of the pandemic, he has cut the menu in half, keeping only the most popular items on.
The government also provided wage subsidies and eventually some rent relief, which he says helped him. “Without that, I would probably either be closed or in high debt,” Sawyer said.
As of right now though, he thinks he’ll survive. “But if this goes on for another two years and the help drops off, that’s another story,” he said.
A version of this article appeared in print in The Ontarion issue 190.5 on April 29, 2021.
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