Hospitality Saskatchewan and Restaurants Canada are saying residents are having a harder time sitting down at restaurants due to rising inflation.
“We want to fill our patios, but with inflation, interest rates going up, there is also tacked-on fuel charges and debt, a lot of restaurants incurred a lot of debt over the pandemic and that compression is really making it challenging for restaurant tourists,” said CEO of Hospitality Saskatchewan Jim Bence.
He said profits for Saskatchewan restaurants are at an all-time low.
“In the restaurant business, it’s not what you make, it’s what you keep,” Bence said. “With rising costs every day it’s causing great compression on the bottom line.”
“Everything from food costs, operations, rent; we have seen skyrocketing across the board and that is trickling down into increased menu prices because operators have no other way to recoup those costs,” said Jennifer Henshaw, vice president of the Prairies for Restaurants Canada.
On top of that, operators will soon be responsible for repaying government loans that were compiled during the pandemic.
Restaurants Canada said about 50 per cent of restaurants are operating at a loss or just breaking even.
Harinderpal Singh Rai, co-owner of House of Hakka and several other Saskatchewan restaurants, says he has been forced to take “corrective action.”
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“Prices, we’ve had to source from different suppliers, we need to look at different ingredients,” Rai said. “We tried to do the best we can, increase between two to three per cent.”
Rai said the restaurant would have to raise its menu prices by 10.7 per cent just to keep up with inflationary costs.
“You have to dig yourself out of the hole and find ways,” Rai said. “You can’t just shut your doors and sit at home. Customers will understand, they do their own groceries at home and understand.”
Henshaw also noted that staffing and retention is something restaurants across prairies are struggling with, especially in rural areas.
She said the Saskatchewan Government has put forward several programs in the last few years to help employers hire from underutilized demographics and create more flexibility for workers.
“We have seen everything from restaurants introducing benefits programs for their staff, more vacations, we have seen a lot better supports for staff, we are seeing wages go up across the board even in an incredibly tight labour market.”
She said the labour shortage is expected to continue for the next nine to ten years.
“In the next couple of months I think we could see a real shift in how many operators decide to stay open or to close,” Bence said.
He said according to CFIB and Restaurant Canada studies, 6,000 to 8,000 small operators in Saskatchewan could be faced with the decision to close doors in the next three months.
Bence stressed that now is the most important time to be buying from local businesses while they are in recovery mode.
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