July 14, 2020 / 5:30 PM / a month ago

Canadian winter set to further chill sales of restaurants amid pandemic

TORONTO (Reuters) - Canada’s restaurants are counting the days to the country’s notoriously cold and long winters, knowing that patio dining - which many are relying on as the coronavirus pandemic has limited indoor dining - is only a short-term solution, executives said.

FILE PHOTO: Patrons are separated by plexiglass sheets as they return to restaurants on the first day after novel coronavirus restrictions were lifted to visit restaurants in Montreal, Quebec, Canada June 22, 2020. REUTERS/Christinne Muschi/File Photo

Even after a bounceback in June, the food service industry has lost a third of its 1.2 million direct jobs due to lockdowns aimed at curbing the spread of the novel coronavirus. It is on track to lose C$44.8 billion ($33 billion) in revenue in 2020 compared with last year, according to Restaurants Canada, the industry lobby group.

As restaurants across the country slowly reopen, diners have been flocking to outdoor dining. Restaurants in Ontario, Canada’s most populous province, recently opened their outdoor patios for service, with socially distanced indoor dining starting on Saturday in some parts of the province.

Several jurisdictions, including British Columbia and the cities of Edmonton in Alberta and Toronto in Ontario, have made it easier for restaurants to open patios, encouraging diners to eat outdoors.

But experts and economists are aware this is a short term solution.

“We in the north have a problem ahead, and it’s called winter,” Avery Shenfeld, managing director and chief economist of CIBC Capital Markets, wrote in a note last week.

“Our warmer months will see restaurants more dependent on patio space, but the al fresco dining season lasts a lot longer in Miami than it does in Chicago or Toronto.”

Every year, most restaurants close patios from November to May, when temperatures often average below freezing in much of Canada.

‘LOOKING TO SURVIVE’

James Rilett, vice president for central Canada at Restaurants Canada, said the issue of winter in Canada is “quite a concern” and “something that’s been on people’s minds for a while.”

While he expects to see a run on outdoor heaters, restaurants already had slim profit margins before the pandemic, and the industry has been decimated by lockdown orders.

That’s left businesses with little room for investment in infrastructure to extend the outdoor dining season.

The average pre-pandemic profit margin for a restaurant in Canada was 4.1%, according to Restaurants Canada.

“We haven’t seen the magic bullet of how this will come through,” Rilett said, referring to the problem of continuing outdoor dining when the temperature plummets to -14°Celsius (6.8° Fahrenheit).

Recent coronavirus outbreaks linked to indoor dining - including several from bars in Montreal, and one at a strip club in Vancouver - have underlined the risk of virus spread to government, industry and customers from indoor activities.

Officials in Quebec, Canada’s hardest-hit province from the pandemic, are cracking down on crowding at food and drink establishments, closing bars early and mandating masks indoors as of Saturday.

FILE PHOTO: Patrons look at a menu at a restaurant on the first day after novel coronavirus restrictions were lifted to visit restaurants in Montreal, Quebec, Canada June 22, 2020. REUTERS/Christinne Muschi/File Photo

Janet Zuccarini, owner and chief executive of Gusto 54, which owns half a dozen restaurants in Toronto, said her company had bought extra heaters and worked with the city to expand patio space for several of its restaurants.

“You’re not looking to make money during the pandemic, you’re looking to survive,” she said. “The bar is set pretty low right now. ... The pandemic has really exposed the weakness in this industry.”

Restaurants “know that the window is short,” Rilett said. “They know that they’re burning daylight, and every day that goes by is one less day that they can make up for the long winter.”

Reporting by Moira Warburton in Toronto and Allison Lampert in Montreal; Editing by Denny Thomas and Bernadette Baum

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