Ontario Restaurants Fight to Survive the Pandemic
Written by: Olivia Bolt
Over the past year, we’ve all suffered due to COVID-19; Including Ontario’s restaurants and restaurant owners. What we don’t fully realize is the magnitude of the pandemic’s impact on our local eateries. Ontario’s restaurant industry has had a drastic drop in annual sales and employment due to the effects of COVID-19. With added costs and service restrictions, local restaurants are having to spend more than they make. A survey conducted by Restaurants Canada found that Canadians trust restaurants and value them as an important part of our community. We love them, but we don’t realize how much they’re struggling and how much they need our help.
Before the beginning of the pandemic, Ontario’s food-service sector was a 37 billion dollar industry. Employing over 480,000 people, the industry provided Ontario’s primary source of first jobs and served about 9.1 million customers per day. Throughout the pandemic, businesses have been forced to make difficult decisions regarding their employees. By April 2020, Ontario lost over 230,000 food-service jobs and had a 62.4% decline in annual sales. With additional factors eating away at profit margins, restaurants have struggled to keep sales up at a sustainable level. Restaurants Canada estimated that indoor dining closures in October 2020 would result in sales losses up to 80% for full-service and over 40% loss for quick-service restaurants. COVID-19 has created a lot of issues for local restaurants, and the uncertainty of constantly changing rules only makes it harder.
Added variables such as extra sanitary precautions and expensive delivery service companies are eating away at local restaurants' already razor-thin profit margins. To prevent the spread of the virus, we’ve all adopted new safety and sanitary precautions. While these methods are effective, they’re also costly. Local restaurant owners are having to spend more money on protective equipment, cleaning products, and plastic barriers. Online ordering services are another strategy people have been using to safely support their restaurants during the pandemic. Unfortunately, not all these services are as supportive as you may think. Skip The Dishes and DoorDash typically ask for 20-30% of total sales, excluding partner fees. Restaurant profit margins range from a measly 3-9%; with food and labour each taking up about 33% of revenue and overhead costs almost taking up the rest. A Restaurants Canada survey conducted in April 2020 found that 76% of respondents said rent was a main source of debt. Other factors included paying vendors (61%), business taxes (58%), and payroll (56%). By the end of June, 68% of full-service and 51% of quick-service restaurants open for takeout/delivery or on-site dining were operating at a loss. Our favourite places to eat are struggling with the lack of inflow and all the costs of running a business during the pandemic.
What can we do to help support local restaurants in their fight to survive COVID-19? Firstly, an effective method is to continue to frequently purchase food from restaurants. If you plan on placing a carry-out or delivery order, try to order from them directly instead of using a third-party delivery service like Skip The Dishes. If you choose to dine out, be sure to follow proper restrictions such as distancing and wearing a mask when you’re not eating to keep yourself and restaurant employees safe. Another way to support these eateries is to make sure that you tip well. Many in this industry are dependent on tips as a fair portion of their income. However, if eating from restaurants is not an option for you, you may also purchase gift cards that can be used after the pandemic. Lastly, following and interacting with restaurants on social media is another way to show your support and stay informed on important business and COVID-19 related updates.
We love our restaurants and, of course, we want to keep them around. Restaurants Canada’s survey says 92% of Canadians agree that restaurants are an important part of the local community. Additionally, 87% of Canadians also agree that restaurants are doing a good job of keeping customers safe. We support our restaurants because they offer us a place to celebrate, spend time with our family and friends and make memories. They play a significant role in our lives and our community, but right now they need our support more than ever.