Pandemic, 3rd-party delivery fees play role in Güd Eats closure in Regina: owner

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Pandemic, 3rd-party delivery fees play role in Güd Eats closure in Regina: owner
According to Restaurants Canada, about 300 to 400 restaurants in Saskatchewan have shut down since the coronavirus pandemic began in March. Connor O'Donovan reports – Feb 20, 2021

The restaurant industry in Saskatchewan has seen another casualty as the coronavirus pandemic continues to create challenges for local businesses.

Gud Eats, a 100-per cent vegan fast food restaurant, announced it is closing its Regina location as of Feb. 28.

“Unfortunately, COVID-19 has taken a toll on a number of downtown Regina businesses with many employees in the neighbouring buildings now working from home,” Gud Eats said in a Facebook post on Wednesday.

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It’s been a scene all too common in the province. According to Restaurants Canada, about 300 to 400 restaurants in Saskatchewan have shut down since the pandemic began in March.

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“The week before the pandemic, we had roughly 2,700 restaurants. We probably lost 10 to 15 per cent. That number certainly would have been a lot worse had it not been for the government support programs,” said Mark von Schellwitz, Restaurants Canada’s vice president for Western Canada.

“We still have two-thirds of our members that are losing money every single month and they’re going into more and more debt. Forty-eight per cent of our members are concerned they won’t be able to survive the next six months unless conditions really improve.”

Chris Cole, Gud Eats chef and founder, said there were a number of factors that went into the decision to close including the rise of third-party delivery services.

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“Most of our business went to third-party applications that take anywhere from 25 to 30 per cent of our sales,” Cole said.

“At that point, it’s very unsustainable to be profitable. We just couldn’t afford it and had to make the decision to stop the bleeding.”

Von Schellwitz described Restaurant Canada’s relationship with third-party delivery services as a love-hate affair.

“We appreciate all the marketing and advertising that these third-party delivery companies provide to sort of help that takeout delivery space,” von Schellwitz said.

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“But as I said before, it’s just really difficult for restaurateurs to make any money when you’re paying 25, 30-per cent fee.”

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Von Schellwitz encourages people to call the restaurant directly when looking at delivery services and would like the Saskatchewan government to step in.

“One of the things we’d like to see the Saskatchewan government pursue, like B.C. and Ontario have done, is a cap on third-party delivery fees to ensure that this is a win, win situation for both the third-party delivery companies and the restaurant owners,” von Schellwitz said.

DoorDash said it understands the difficulty restaurants are having right now, but ensures it’s doing its best to make things affordable.

“We’ve taken several steps to support local restaurant partners in Canada including reducing commission fees for eligible local restaurant partners by 50 percent (ending last May), introducing DoorDash Storefront, an online ordering solution with no commission fees, and providing COVID-19 relief grants to small businesses in Canada. We will continue to support restaurants as we work to provide the best possible service for our entire community,” DoorDash said in an emailed statement send to Global News Friday.

Click to play video: 'Skip The Dishes implements a $0.99 ‘B.C. Fee’'
Skip The Dishes implements a $0.99 ‘B.C. Fee’

SkipTheDishes told Global News it has worked “tirelessly” to support restaurant partners throughout the pandemic and said it has given back more $43 million to their restaurant partners since March of 2020.

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“When taking into account the 25% commission rebate we have implemented in affected regions as part of our support package, all local, independent restaurant partners on the SkipTheDishes platform are paying less than 20% in commission while their dining rooms are closed,” the company said in an emailed statement on Friday.

Its support package also includes “zero per cent commission rate for new restaurants joining the network during the lockdown period and a 10.5 per cent commission rate to any restaurant on Skip looking to utilize staff to facilitate their own delivery while leveraging Skip’s technology and customer base.”

Gud Eats will continue to operate in Saskatoon and will honour any Regina gift cards in its Saskatoon location.

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“We’re going to go back to Saskatoon, refine our model and hopefully get into more progressive markets,” Cole said. “And when the world heals itself, hopefully, things get back to normal.”

Global News reached out to the Saskatchewan government on whether or not the province is considering placing a cap on third-party delivery fees.

In a statement, a spokesperson said the provincial government is “monitoring the changes in other provinces to limit such fees.”

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The Saskatchewan government’s recently introduced Strong Recovery Adaptation Rebate which allows businesses that have pivoted to third-party delivery apps to apply for a reimbursement of 50 per cent for their first six months of costs up to $5,000.

The spokesperson added the government “will continue to engage with the business community on this and other issues.”

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