Owner Of Halifax Restaurants Says Sales Are Down $3-Million Since March
HALIFAX – Bill Pratt could see the writing on the wall last week when Covid-19 cases were steadily rising in Halifax. He knew it was risky, public health-wise, to keep his 15 restaurants and three franchises open. So, on November 23, he closed the dining areas and began operating as takeout-only. One day later, the Nova Scotia government made such a move mandatory for all restaurants in the HRM.
“There are so many scares in the city right now…we can either wait for the phone call from the health department to shut us down or we can proactively do it ahead of time,” said Pratt.
Pratt, whose Chef Inspired group owns such restaurants as Cheese Curds and Studio East, will have to layoff 40 employees because of the latest shutdown in Halifax.
Like other restaurant owners, Pratt has been through this situation before, when in-house dining was banned in March due to the pandemic. But this time around, the shutdown is happening in the colder months, which are slow at the best of times. Pratt emphasizes the continuous need for federal government programs to help businesses stay afloat.
“It’s slow in the winter, and you got to make it in the summer. So, this is horrific; it’s bad on bad,” said Pratt.
“Obviously, our sales are going to plummet again. So, without those (supports) we’re not going to be able to make it.”
Pratt has used every program available since March to keep his restaurants alive; the wage subsidy, the $40,000 CEBA Loans, and the rent subsidy.
He is hoping that the new and improved rent subsidy program will make a better difference. In the old program, the money went to the landlords if they chose to apply, which frustrated the commercial renters. Under the revamped program, the subsidy will go directly to the businesses, rather than relying on the landlord to pass the subsidy on to the tenant.
“With the rent and the wage subsidies we should be okay. Without them, we’ll sink,” said Pratt.
Since the pandemic began back in March, Pratt estimates that he is down $3-million in sales across all of his restaurants. He has taken on an additional $200,000 in debt (including the CEBA loans), to stay afloat. He is hoping, in 2021, the CEBA loans will be forgiven to help businesses.
“It’s horrific. If you sum it all up, the restaurant industry is sinking,” said Pratt. “Luckily, we have government support, but if that goes away then what are we doing? Our sales are at 50 percent.”
On top of the financial toll the pandemic has caused restaurateurs, it has also had an emotional impact. Pratt has had to decide over the past several months who to keep on, and who to lay off. Sometimes these decisions affected close friends and family.
“It’s a roller coaster of pivoting. Emotions are up and down daily. You have to lay off people who have been your friends…I had to lay off my sons because there’s no work at the restaurants,” said Pratt.
“It takes an emotional strain like no tomorrow. You have to keep putting one foot in front of the other, or you have to decide to close.”
One problem facing restaurant owners is the lack of cash-in-hand. Subsidies may cut down on expenses, but these programs don’t give businesses cash to pay off vendors and suppliers. On top of that, reopening after a lockdown is expensive; food will likely go to waste and must be replaced.
Luc Erjavec, a vice-president with Restaurants Canada, says when Atlantic Canadian restaurants reopened last summer after lockdown it cost $40,000 for a 100-seat restaurant to reopen. The high cost was associated with replacing food, training staff, buying plexiglass, and supplying PPE for everyone. Erjavec doesn’t believe reopening a second time will cost so much, but it will still require some money.
But, with debts piling up just to stay afloat, many restaurants don’t have that precious cash in their pockets or registers.
“Yes, you can get wage and you can get rent subsidies, but you still need food,” said Pratt.
“Suppliers now want COD (cash on demand). They’re in trouble too.”
Despite all the challenges, Pratt is trying to remain hopeful that his restaurants will survive the rest of the pandemic. With that being said, he predicts we will see more restaurant closures before this is all over.
“There will be failures. There will be restaurants that just aren’t going to be able to make it because they don’t have cash on hand,” he said. “But with the wage and the rent subsidies, I think more will get through the winter months.”
“We are hoping we will make it. It is speculation right now, but we are hoping.”