A University of Guelph food industry analyst said one in 10 restaurants were forced to close because of the pandemic and will likely never reopen.
Bruce McAdams, associate professor at the university’s School of Hospitality, Food and Tourism Management outlined the impact the pandemic has had on the industry during a recent webinar about food and agriculture during the COVID-19.
Restaurants Canada reports four out of five restaurants had to lay off people at the pandemic’s onset in March.
“Right away, you can see the impact on the workforce was huge,” he said, noting one in 10 restaurants closed their doors, probably forever.
Seven out of 10 operators are “seriously concerned with their ability to meet their cash flow requirements over the next three months.”
McAdams said that as more restaurants open, the industry is still in a weak position.
While take-out restaurants, such as McDonalds and Tim Horton’s, faced a “minimal sales decline” because they were already built for take-out, dine-in restaurants and contracted food services were significantly impacted.
James Eddington, chef and owner, Eddington’s of Exeter, said his Exeter, Ont., restaurant has gone through a “huge shift.”
“We’re already pretty confident in our health and safety measures at the restaurant, but we try and double, triple that,” he said, adding his farm-to-table restaurant took five weeks off to rethink how they were going to transition to a take-away operation.
That effort included figuring out how to keep warm food warm, determining what foods travelled well, and finding ways to transport that food in an environmentally sustainable way.
“We’re going to relay that information into the future of our business,” he said.
But he said there will still be big challenges as businesses begin to reopen.
“We still have to realize we’re still in a state of emergency,” he said, noting people are starting to go out. “It’s not normal, it’s not going to be the same. We still have to ensure we have the health and safety protocols in place.”
He has noticed a challenge in navigating the different recommendation’s and guidelines provided by different levels of government and health authorities.
McAdams said data shows six out of 10 Canadians will feel comfortable dining out at a restaurant within the next three months, “so that’s good news.” However, he noted that means 40 percent of people will opt to stay at home.
“We’re still in a state of emergency and there is some good news, but this is going to keep coming,” he said.
Some restaurant owners, he said, are having difficulty rehiring staff or are having to manage the stress of workers who do come back. He said that reopening after three months, with entirely new safety protocols, is akin to opening up a new restaurant due to the need to retrain staff. Many restaurants owners simply don’t have the cash flow to manage.
He also said that a second lock down will be “catastrophic for the industry” and opening at half capacity, as many restaurants currently are, is not in line with most business models.
NEW SURVEY RESULTS:
Most restaurants are still losing money and the majority of foodservice businesses operating at a loss expect to take at least a year to recover.
— Restaurants Canada (@RestaurantsCA) July 6, 2020
“Coming back at half capacity is a big challenge for many, and probably not sustainable”
Maria Corradini, Arrell Chair in Food Quality and associate professor in the department of Food Science, said restaurants will be further challenged in fall and winter when their operations move exclusively indoors.
“Reopening is extremely challenging from a food safety perspective,” she said.
Vijay Nair, executive chef at the University of Guelph, said everything in his operation was shut down when COVID hit in March. That included 22 on-campus food outlets and three large kitchens.
He noted it took weeks to slow down the operation because they had been operating at full-steam in preparation for summer events held on campus. With a few remaining staff members, they distributed 30,000 meals to people in need to avoid food waste.