The restaurant industry is urging landlords to offer rent relief during the COVID-19 pandemic, and is warning that dozens of operations will close permanently in Nova Scotia and that 24,500 foodservice jobs in the province have already been lost.
The layoffs are among an estimated 800,000 foodservice positions eliminated across the country since March 1, according to Restaurants Canada, a national not-for-profit association representing the country’s commercial foodservice industry.
The Nova Scotia restaurant industry normally employs about 34,500 people and produces $2.1 billion in sales, according to Gordon Stewart, the executive director of the Restaurant Association of Nova Scotia.
Restaurants have been ordered to close their doors to help prevent the spread of COVID-19, although they are allowed to offer takeout and delivery. Steward said most will survive the pandemic. But some won’t make it.
“We’re definitely going to see some casualties. I think already we’ll see somewhere in the order of 200-plus casualties,” he told CBC Nova Scotia News.
In Canada, the foodservice industry is made up of 97,500 establishments, including full-service restaurants, quick-service restaurants, caterers and drinking places, said Restaurants Canada.
Restaurants Canada said in a news release that a survey it conducted showed one in 10 restaurants in Canada have already permanently closed and another 18 per cent will shut down for good within a month, if current conditions continue. The survey was conducted March 25-29 with 655 foodservice operators representing 13,300 locations.
With few customers or none at all, some restaurants don’t have the ability to pay rent. Both Stewart and Restaurants Canada would like to see landlords provide rent relief and allow restaurants payment-free periods.
In Halifax, it’s not unusual for restaurants to pay $20,000 per month in rent, said Stewart, and it’s a big burden to carry. Rent deferrals sound good, he said, but ultimately the bill will need to be paid and that could still be a struggle.
“When it’s all deferred on the restaurant it’s one big huge payment that they’re going to have to carry along with all the other payments they’re going to have to carry anyway, because no ones relieving it, they’re all deferring it,” he said.
Even when business returns to normal, Stewart doesn’t believe many restaurants will rebound quickly. He estimates it takes the foodservice industry five times longer to recover than other businesses following an economic downturn or financial crisis.
“In the marketplace we’re going to see a substantial change,” he said. “When we open our doors — hopefully it will be the beginning of summer — there won’t be any tourists around, there’s a big marketplace gone. There won’t be any conventions around, that’s another marketplace…. A lot of pieces of our sales aren’t going to be there.”
Restaurants Canada is pushing measures to help ease those burdens, including working with all levels of government to find ways to access working capital so restaurants have the money to reopen when physical distancing rules are lifted.
The federal government is already offering billions of dollars in aid to help Canadian businesses cope with the pandemic, including income supports, wage subsidies and tax deferrals.
In the meantime, a new initiative in Halifax called Dine and Stay Home aims to encourage people to buy food from local eateries that are still open and offer delivery and pickup options.
Various groups, including Discover Halifax and Restaurants Nova Scotia, set up the online effort and are compiling a list of restaurants still up and running.