Will patios, flexible liquor laws, and local tourism get restaurants through COVID-19?

Business leaders and restaurateurs hope that newly opened patios and other supports will help save jobs and Waterloo Region's food operations. 

The Waterloo Regional Tourism Marketing Corporation is even changing its focus to promote tourism inside the region, as a way of lending support. 

And while there are positive signs, the jury is out on whether it will work. 

The tourism organization has just launched "WR United – Eat Local," a project designed to encourage residents to eat at a local restaurant patio, order take-out food or buy from local growers and producers. 

"Having patios now open has been tremendous for restaurants, and several owners have told me it has helped business. Municipalities and the AGCO (Alcohol and Gaming Commission of Ontario) stepping up to the plate so quickly to allow patio expansion has been huge," said Minto Schneider, CEO of the marketing corporation.

Morty's Pub in Waterloo has a 4,000 square-foot patio that would normally accommodate 350 people. With a new configuration for physical distancing, it can seat 125 people with tables eight feet apart, more than public health requires, according to owner Jay Taylor. 

"The patio was a big investment but worth it because it allows us to bring back staff and provide hope," Taylor said. 

'Getting close to breaking even'

Hope is the operative word. Patios and expanded patios have been open for two weeks, but are these various supports, including governmental assistance, enough to prevent restaurant closures in the long term? 

Ryan Lloyd-Craig is cautiously optimistic. He operates the popular Graffiti Market in Kitchener with a 48-seat patio and a recent expansion that will allow a total of 96 seats with the potential for more. 

"Combined with our food truck, pick-up beer and take-out, we are getting close to breaking even," Lloyd-Craig said. 

In the past few months, other restaurants weren't lucky enough and closed, though it's important to note that some of the attrition is not COVID-19 related but rather the normal churn in an industry with razor-thin margins. 

Small and large restaurants have shuttered: Nando's Peri-Peri Chicken, a national chain with a Kitchener location, and Crossroads Family Restaurant in Elmira closed, both citing causes related to COVID-19. 

More restaurants could close over the long term, but alternate ways of serving customers have kept the wolves at bay — for the time being.   

Wage subsidies help tight margins 

In good economic conditions, restaurants often struggle to break even or see a tiny bit of profit. Support, including wage support, is therefore necessary during the pandemic while capacity is far below a sustainable threshold, according to Ian McLean, CEO of the Greater Kitchener Waterloo Chamber of Commerce.  

"The wage subsidy program needs to be maintained for the sector until they can get back to a capacity that can generate more income for them," McLean said. 

Overseeing several restaurants including Wildcraft and the Beertown brand, Jody Palubiski is guarded in his analysis but sees business improving.  

"I think there are some early positive signs, but it may be too early to pass judgment," Palubiski said.

Of primary concern are two conditions that will get staff back to work: weather, for busy patios, and the curve of the virus trend. 

"We had 954 people on leave," Palubiski said. "We've called back close to half, and with expanded patios we will be in a position to move forward. If we get open inside, even with reduced capacity, we will call back 100 percent of staff in several of our restaurants."

Neighbourhood locals: better odds

On the other side of the patio table from wait-staff are the customers: how robustly will they support the restaurants?

McLean notes that customers need to be confident that they can visit a patio safely, while University of Guelph professor and researcher in food systems Mike Von Massow adds that a dearth of university and college students could pose a risk to revenues.  

"It depends on the restaurant. People willing to go back will go back partly to feel some normality and partly to support neighbourhood institutions, like Morty's and Ethel's. However, cities like Kitchener, Waterloo and Guelph could be hurt a little bit because there will be fewer students around and that will extend into the fall," Von Massow said.    

For the time being, food operators with robust take-out who can draw on patio revenue — and with the benefit of expanded patios — can likely survive in the short term.  
 
Fall and cold weather will tell the tale, especially if, in the next phase of re-opening, customer seating capacity inside isn't high enough to sustain them; regardless, operators like Jay Taylor are defiant and determined to fight.
 
"At Morty's, we will still be standing when this is all said and done."