High food costs, high cost of labour, looming debt repayments, and razor-thin margins are spelling trouble for restaurants in British Columbia.
Via Global News, the BC Restaurant and Foodservices Association said as many as 2,000 restaurants could close up shop by the spring.
“I think here in Prince George, we fare a little bit better than the province as a whole in this industry,” Eoin Foley, the owner of Nancy O’s and Betula Burning in Prince George told My PG Now.
He said many restaurants in southern regions heavily rely on a strong summer rush to carry themselves through the year, while Prince George is more used to going out year-round.
This means those southern restaurants, especially in areas like the Okanagan, had their busiest seasons of the year drowned out by smoke and wildfires.
“We might be a little insulated compared to other regions, but still it is a tough industry to be in with very thin margins,” Foley said. “Even just the extra cost of repaying you CEBA loan if you took that over [the pandemic], even that could be a make or break thing.”
The Canada Emergency Business Account (CEBA) loan was from the Federal Government by many restaurants, with multiple payment, repayment, and loan forgiveness options.
The loan repayment due date is January 18 if restaurants hope to take advantage of any partial loan forgiveness – you can learn more about it here.
“If the loan is your only factor, [it is] probably not going to close you down for good,” Foley said, adding bigger issues arise when multiple factors all pile on the financial strain.
He said some of these factors include increases in payroll costs and liquor taxes, food and delivery costs, and general inflation all piled on top of businesses that had not financially recovered from the pandemic.
“Our community has rallied around the restaurants businesses really well,” Foley said, thanking Prince George for a boom in dining out he saw after the pandemic restrictions lifted. “I think many other restaurant owners are thankful we live in such a strong community.”
In the end, Foley did not have a prediction as to how many restaurants in Prince George could be nearing the end of their rope by the mid-January loan repayment, but he did say “it is a tough business to be in already with very thin margins.”
“You could have the businesses in town on a razor’s edge, but if you can push yourself the right way, you can pull through a tough time and a lean couple months.”
“Supporting your favorite restaurants is a good way to make sure they stay around,” he said. “As with every hurdle that we have faced in the last few years, we need to assess and see whether we can change and shift to make things better.”