ÎÚÑ»´«Ã½'s dining sector is bracing for a potentially devastating hit early in 2024.
Between 10 and 14 per cent of the more than 15,000 restaurants in the province could close if the federal government does not extend its deadline for repaying interest-free ÎÚÑ»´«Ã½ Emergency Business Account (CEBA) loans made during the pandemic, BC Restaurant and Foodservices Association CEO Ian Tostenson told BIV.
That .
Restaurant owners in the program applied for loans up to $60,000, with the incentive being that $20,000 would be forgiven if the rest was repaid by a future date.
Those who borrowed $60,000 and do not repay the loans by deadline not only have to repay the entire $60,000, but also start paying interest – a financial burden many simply cannot handle, Tostenson said.
"We're in for a rough ride in the next eight to 12 months," he said. "We're in a worse position now than we were during the pandemic."
The average restaurant owner has been unable to pass on the inflation in food prices to customers, he said.
Those owners in many cases have pumped their businesses full of debt to keep operations going. If they face a spike in interest on loans after Jan. 18, and are unable to obtain bank financing, closures are likely.
What is not helping is that diners are reducing spending and often trading down to have appetizers instead of entrees, Tostenson said.
Everybody’s input costs are rising for materials and labour, Terra Breads owner Michael Lansky told BIV.
Broadly, that makes it harder to run a business, he added.
He recently , although he is keeping his large bakery space at the West 5th Avenue location.
“The locations were just slow,” he said of the ones he closed. “Traffic is important.”
He is keeping open his café locations on Granville Island and in the Olympic Village, saying “we’re continuing on as normal,” and that he has no plans for any future closures.
All employees at the closed locations were offered work at the stores that remained operating, he added.
Longtime chef and chief culinary officer at Organic Ocean Seafood, Robert Clark, also foresees many restaurant closures but thinks that this could be healthy for the sector.
"We're going to come out on the other side better and stronger," he said.
He believes that a greater percentage of the restaurants that survive the next year will be the ones that offer valuable experiences and are not simply seeking to churn through more customers or to sell more meals.
Customers, he said, have shifted spending away from goods and toward enjoyable experiences and restaurateurs should take notice, he said.
Some of these dining experiences are those connected to the .
Restaurants such as Riley's Fish & Steak, Boulevard Kitchen & Oyster Bar, Bacchus Restaurant, Cin Cin and the Keg are all hosting dinners where diners get multi-course meals with wines and are able to listen to winemakers or winery principals speak about the wines between courses.
Clark said he expects industry trends, such as a shift toward wines and beers with either a low amount of alcohol, or no alcohol, to continue.
So does Technomic in its .
"The biggest development will be that large restaurant chains will start dropping the up-charge for milk alternatives in hot and cold coffees and teas," the industry research and consulting firm predicted.
It added that restaurant operators are also likely to use off-beat approaches to attract a broader range of customers.
"Think doughnut operators adding pizza ranges, chef-made menus from build-your-own chains and, perhaps inspired by the success of China’s Mixue Ice Cream & Tea, coffee chains introducing ice cream lines," its report said.
"Look also for brands to add and expand on later-day, late-night and overnight menus with cravable classics as well as new daypart exclusives. Brunch will be a key occasion for sit- down restaurants—including all-day and nighttime-only iterations of the breakfast-lunch hybrid."
