Canadian restaurants are having a tough time returning to pre-COVID-19 days because of rising expenses, low customer counts, high debt, and low profitability, according to a report from Restaurants Canada. .“While nominal sales are expected to return to pre-pandemic levels before the end of the year, traffic still remains below what it was before,” said Restaurants Canada President and CEO Christian Buhagiar, in a Thursday press release. .“Restaurant operators are struggling financially, with half of our operators operating at a loss, or just breaking even.”.Despite food service remaining one of Canada’s top employers, challenges filling job vacancies leave the industry lagging behind others when it comes to job recovery. There were 171,715 job vacancies in the food service industry in June, a threefold increase from pre-pandemic levels. .The report said restaurant owners changed their business models to mitigate the labour shortage. It said 77% of restaurants raised wages, 72% increased hours worked by ownership and management, and 64% reduced hours of operation. .The report went on to say 85% of independent full-service restaurants took on new debt because of COVID-19. It added 23% had debt less than $50,000, 44% had an amount between $50,000 and $100,000, and 35% had more than $100,000. .Due to accumulated debt and low profitability, it said it's become tough for businesses to pay back loans. .The report said rising food costs are one of the most serious challenges facing restaurants and the costs are reflected in menus. .The average quick-service restaurant menu prices are up 6.7%, and full-service restaurant menu costs have risen by 6.5%. Alcohol prices at licensed establishments rose by 3.8%. .This report comes after the Canadian Federation of Independent Business (CFIB) said on August 19 a total of 17% of small business owners surveyed are preparing to close under pressure of six-figure COVID-19 debts. .READ MORE: Nearly one in four small businesses preparing to close.“Small firms are in for a rough recovery,” said CFIB CEO Dan Kelly. .“Governments can step in and help by taking concrete measures.”
Canadian restaurants are having a tough time returning to pre-COVID-19 days because of rising expenses, low customer counts, high debt, and low profitability, according to a report from Restaurants Canada. .“While nominal sales are expected to return to pre-pandemic levels before the end of the year, traffic still remains below what it was before,” said Restaurants Canada President and CEO Christian Buhagiar, in a Thursday press release. .“Restaurant operators are struggling financially, with half of our operators operating at a loss, or just breaking even.”.Despite food service remaining one of Canada’s top employers, challenges filling job vacancies leave the industry lagging behind others when it comes to job recovery. There were 171,715 job vacancies in the food service industry in June, a threefold increase from pre-pandemic levels. .The report said restaurant owners changed their business models to mitigate the labour shortage. It said 77% of restaurants raised wages, 72% increased hours worked by ownership and management, and 64% reduced hours of operation. .The report went on to say 85% of independent full-service restaurants took on new debt because of COVID-19. It added 23% had debt less than $50,000, 44% had an amount between $50,000 and $100,000, and 35% had more than $100,000. .Due to accumulated debt and low profitability, it said it's become tough for businesses to pay back loans. .The report said rising food costs are one of the most serious challenges facing restaurants and the costs are reflected in menus. .The average quick-service restaurant menu prices are up 6.7%, and full-service restaurant menu costs have risen by 6.5%. Alcohol prices at licensed establishments rose by 3.8%. .This report comes after the Canadian Federation of Independent Business (CFIB) said on August 19 a total of 17% of small business owners surveyed are preparing to close under pressure of six-figure COVID-19 debts. .READ MORE: Nearly one in four small businesses preparing to close.“Small firms are in for a rough recovery,” said CFIB CEO Dan Kelly. .“Governments can step in and help by taking concrete measures.”
