This text is taken from Courrier de l’ économique. Click here to subscribe.
Do you go to restaurants less than before? If so, you are not alone. The tightening of Quebecers’ budgets is starting to be felt in the number of visitors to culinary establishments, which has been declining since this summer.
“Restaurants are often the canary in the mine. When people reduce their spending, we are the first to pay the price,” says Hugues Philippin, owner of the restaurant Chic Tandi!, in Quebec, and president of the board of directors of the Association Restauration Québec (ARQ).
The end of 2022 and the beginning of 2023 had, however, been the period of all hopes. Freed from health restrictions, customers flocked with new joy. An early, relaxed holiday season allowed restaurateurs to get back on track.
“2022 has been an excellent year for the entire restaurant industry. It was a rebirth, my turnover soared,” recalls Éric Bieunais, owner of the Lola Rosa vegan restaurants.
The first months of 2023 have also been promising. Commercial catering revenues returned to 2019 levels, according to the compilation by the Ministry of Agriculture, Fisheries and Food. That said, part of these revenues is due to food price inflation, which was 9.1% in this sector in one year.
“We are reaching the figures before the pandemic, but with fewer customers,” explains Mr. Filipino.
Restaurateurs also had to increase salaries by an average of 25.5% between 2019 and 2023, according to an ARQ survey of its members. In this context, their profit margins have decreased, says the Association.
And the trend is not going in the right direction for them. Since last June, the ARQ has noted declines of between 5 and 10% in the average value of sales per establishment compared to 2022. This is a slowdown observed by several restaurateurs contacted by The duty.
“Since September, it’s been a difficult time. It’s really slow,” notes Minh Tran, owner of the vegan sushi restaurant Ohana, on Mont-Royal Avenue. She believes that her business is “doing well” financially, even if she has to spend more energy to survive, in a context where all costs are increasing.
Mr. Bieunais looks forward to the month of December with a little more optimism. The owner of the restaurant located in the Quartier des spectacles will host several corporate events for the holidays, but he has accepted smaller groups with more limited budgets than last year. “Will the people who go to the Christmas market, like other years, afford to go to a restaurant afterwards? We will know soon,” he emphasizes.
Still in debt
Alongside this challenge, a large number of restaurateurs will have to repay loans granted by the federal government during the COVID-19 pandemic by January 18. Through the Canadian Emergency Business Account, many have obtained a loan of $60,000, a third of which will be converted into a grant if they repay $40,000 before the deadline. But according to the ARQ, which requested a one-year extension, several of them will not succeed.
Mr. Bieunais believes that he will succeed in the maneuver for one of his two restaurants, thanks to personal money that he will invest. But for the second, it will not be possible. He will therefore lose $20,000 and will have to pay his entire loan in three years with an interest rate of 5%, according to the terms announced by the government.
Co-owner of the Au Poulet Nouveau restaurant in Mascouche, Jacques Gariépy reports for his part that he will have to borrow money from the bank to pay the government before January 18.
In this context, some restaurateurs may decide to close shop. Moreover, in July the number of establishments was at its lowest level since the start of the pandemic, having fallen by 576 in six months to stand at 17,398.