Eateries choking on record debt loads

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This article was published 28/10/2020 (1422 days ago), so information in it may no longer be current.

A “skyrocketing” number of Manitoban taverns and eateries are incurring record debt loads this year because of COVID-19, as they struggle to survive at less than a third of regular sales amid tightening pandemic restrictions.

New numbers from the Manitoba Restaurant and Foodservices Association on Thursday reveal the bleakest picture yet for the provincial hospitality industry — with 79 per cent business owners reporting at least $20,000 in outstanding fees, and around one-third of that in arrears up to $80,000.

On top of that, two out of three restaurant owners say they continue spending upwards of $2,000 per month for personal protective equipment out of pocket. 

“It’s deeply staggering,” MFRA executive director Shaun Jeffrey told the Free Press. “But the fact is, we’ve been warning the government about this for months now, without any specific assistance or so much as them remotely listening to us about this at all.”

When public health officials announced new Winnipeg guidelines for masks and gathering sizes in late September, Jeffrey said the association hoped the province would make good on their promise to consult the industry about further restrictions. “But not only did they fail to consult us, they also introduced further measures that reduced their capacity to make earnings,” he added. 

Under current orders, licensed bars and restaurants are no longer allowed to sell or serve alcohol past 10 p.m., and all customers must be out by 11 p.m.

A survey of 261 such establishments shows at least a quarter have lost 60 per cent or more of their revenues as a result of the code orange restrictions. And 27 per cent of those surveyed by MRFA said they lost between 40 to 60 per cent sales. 

“I understand we’re putting our health first,” said Jeffrey. “However, this is a problem we’re seeing everywhere — even in areas that don’t have those kind of restrictions that Winnipeg now has.”

Jonathan Alward, Prairies director for the Canadian Federation of Independent Business, said part of that comes from the “mixed messaging” by the province.

“It’s confusing for people to know how exactly they can be helping right now when they’re being told to stay indoors and also support local businesses at the same time,” he said in an interview. “You ask households to send out only one person to go out and buy things, but you also ask them to limit going out at all — it’s messaging that’s become complicated to understand.”

Data from CFIB released Thursday suggests up to 76 per cent of hospitality businesses in Winnipeg are seeing a drop in sales because of the recent spike in COVID-19 cases. Those figures are significantly higher than the 50 per cent average observed nationally.

 

“For months now, it’s been the same level of low revenues which was a problem already,” said Alward. “Now, we’re seeing even that number rise up to the lowest sale levels we’ve seen so far.”

At JC’s Tacos and More on Henderson Highway, owner Marvin Dubon said he’s beginning to lose count of the money he’s invested towards plexiglass barriers, masks and sanitization stations. 

“It’s no secret we’re all going in big debt,” Dubon said Thursday, while helping out the only two customers at his Mexican restaurant during what would otherwise have been a busy lunch hour.

“I could easily seat at least 29 people here on a regular day,” he added. “But it’s all small numbers of delivery, take-out and whatever other business we can get now.”

For John Kolevris, who run Saffron’s Restaurant on Corydon Avenue, it’s a similar struggle. “Of course, government can do more,” he said. “But I just don’t know if they want to anymore or whether they are going to — so it’s all out of pocket for now.”

In May, the province said it was partnering up with several organizations to develop and launch an online marketplace to “connect businesses with non-medical grade PPE and other materials for free they need to operate.” In a statement to the Free Press Thursday, a Manitoba spokesperson said that’s “still in the working stage,” deferring to the B2B Manitoba website that provides small firms with PPE they can buy out of pocket.

“In fairness to the government, the Manitoba Gap Protection Program has been helpful,” said Chuck Davidson, president of the Manitoba Chambers of Commerce. “But when you look at that in context, it’s only a drop in a bucket.”

“I’m deeply disappointed and so should everyone else be with government,” said Jeffrey, adding it’s why MRFA is initiating the #savembrestaurants campaign to ask Manitobans for their help. In return, restaurants who bring awareness to the challenges facing the sector will get free face masks.

“Now is the time to look ahead and do more so we sustain some form of a future for our beloved restaurants who make our cities what they are.” 

Twitter: @temurdur

temur.durrani@freepress.mb.ca