N.S. restaurants struggling to stay open amid rising food and operating costs
Even though Ivan Chan’s restaurant is only open four hours most days, he works 14 to 16 hours in an effort to keep everything running.
“I’m free, right? That’s the only way to lower the cost right now in my place,” said Chan, owner and chef of The Orient Chinese Cuisine in Bedford.
“I try to keep the overhead low because the income stream is a lot smaller than before.”
When he says “before,” he’s talking about the COVID-19 pandemic.
Chan admits he’s not making money — and he’s not alone. According to the Restaurant Association of Nova Scotia, nearly half of the province’s restaurants are operating at a loss or merely breaking even.
“This is largely due to an increase in expenses, not just food costs, but also utilities, insurance, equipment, etc.,” said executive director Natasha Chestnut.
“The industry has tight profit margins, sitting on average just under four per cent, so every expense or additional cost affects their bottom line.”
Liz Ingram-Chambers said any restaurant making four per cent is “one that will survive.” She owns Le Bistro in Halifax, and has been watching her bank account drain in recent months.
“Every day it’s a fridge, it’s people calling in sick, your ovens are breaking, dishes are breaking,” she said. “Sometimes you get worn down a little bit in this industry, especially if you’re an owner/operator.”
Both Ingram-Chambers and Chan said food and labour costs are their biggest expenses.
When it comes to food, Chan said everything seems to be 25 to 30 per cent higher than it was before the pandemic.
“And you’re looking at most of the basic stuff like eggs and oil,” he said. “So it’s like a double-edged sword right now. You cannot do anything right at this point.”
Chan said he’s only increased menu prices by five to 10 per cent because he doesn’t want to lose customers.
It’s the same for Ingram-Chambers. She has increased prices but tries to keep them “fairly low and reasonable.”
“If we can get a better rate on something, we’re using those ingredients in our nightly special. And we’re doing a lot more takeout now than we ever have,” she said.
Ingram-Chambers said minimum-wage increases over the last four years have resulted in an $8,000 biweekly jump in her labour expenses. She said she’s paying 27 staff members $34,000 every two weeks, compared to $27,000 in 2020.
She said every time an employee has to stay on shift longer, she gets stressed.
“Paying for prepping or having lots of people in my kitchen, I’m like OK we’re not that busy. Why is everybody here? Because you get nervous and then you get cranky because you’re watching your money fly out the window.”
Since COVID, she has also scaled back her hours of operation and cut out live entertainment and advertising. Her philosophy is getting people through the door and hoping they come back.
What customers think
For Bea Rhanis, dining out has become a luxury she can’t afford. She said the last time her family of four went to a restaurant a year ago, it cost $300.
“Don’t get me wrong, I love going out but these are different times and I just decided that I can’t afford it. I mean in reality I can, but I actually don’t want to because I think it’s ridiculously expensive,” said Rhanis.
Reign Sherrington describes himself as a “relatively broke student” who loves to socialize with friends, but often has to choose the cheapest option.
“When me and my friends are planning where to go, we’re looking at spots and we’re like oh that’s a bit too expensive. And we all try to find something that works with our budgets, I would say more so than we did a year ago,” he said.
On the streets of Toronto, diners told CBC News that high prices, lower quality and smaller portions have them eating out at restaurants less often of late, a trend which is pushing many restaurateurs to the brink of bankruptcy.
With these sentiments in mind, Chan understands the restaurant industry is only getting more difficult.
“I just hope people realize what’s happening,” he said. “I’m a big advocate of support local and I really think people need to keep that in mind because there’s a lot of your beloved restaurants that could disappear instantly and you don’t even know what happened.”
