By Phil DeMont
Businesses Emerging from Lockdown
When Jim Buckle quarterbacked the Queen Elizabeth Lions four decades ago, his biggest issue was how to get the ball to the team’s stellar backfield of Quentin ‘Snoopy’ Tynes and Mark Daye.
Nowadays, the veteran restaurateur’s biggest issue is understanding the ‘group of 10’ rule for people for restaurants.
Or it is where to place properly socially distanced tables at Rhubarb.
That’s Buckle’s eatery located just outside Peggy’s Cove which he runs with his spouse Diane and where his brother Doug, former Globe and Mail layout savant, churns out pizzas.
Or it is figuring out all of the other myriad provincial rules and regulations for running dining rooms which Buckle needs to follow as his establishment slowly re-opens from the 2020 pandemic lockdown.
“This is new for everybody,” says the 58-year old Buckle, relaxing two tables away on Rhubarb’s deck overlooking St. Margaret’s Bay.
Rhubarb is one of the more than 15-hundred restaurants and bars dotting Nova Scotia that might emerge from the three-month-long, COVID induced economic shutdown.
Bent Ridge Winery is another.
The three-year-old Windsor area winery and restaurant is trying to re-open but without any real sense of what the returning business will look like.
Glenn Dodge is on the left, his brother Steven Dodge is on the right, owners of Bent Ridge Winery in Windsor, NS.
“It’s going to take a while getting back to where we were before,” says Haligonian Glenn Dodge, who – along with his brother and tourist industry veteran Steven – owns Bent Ridge.
Last year, Bent Ridge revenue jumped 65% from the previous 12 months, Dodge notes.
“We were starting to catch on.”
Nova Scotia’s lockdown stopped all that.
The country’s economic closure back in March hammered revenue for many businesses in most industries,
And, as sales plunged, so did available jobs. So far, Canada’s foodservice sector has laid off more than 800,00 employees, or more than 75% of the industry’s entire labour force.
In the United States, staff cuts in the food and beverage sector accounted for 60% of that economy’s total national job loss stemming from the pandemic.
Now, in May and into June, many American states and Canadian provinces began letting businesses re-open.
Likely, however, a sizeable portion of those foodservice establishments in Nova Scotia, indeed across the country, won’t reopen.
In an April survey of Canadian restaurants and bars, 10% of respondents said they were closing permanently because of the pandemic and another 18% estimated they had enough available cash to last another 30 days.
In Canada, something like 60% of independent restaurants fail within the first three years of opening. So, the post-COVID failure rate of almost 30% is plausible.
Nova Scotia eased back its restrictions on June 5, allowing stores and restaurants among other businesses to open up.
Neither Rhubarb nor Bent Ridge, however, had their dining rooms set up on that first day.
Bent Ridge was looking to open its eat-in doors a week later while Buckle says Rhubarb would need another week or so before its space would be ready.
That said, even with the ability to go to your favourite eating spot, many consumers remain nervous about dining out.
A U.S. survey found that one-third of consumers said they wouldn’t feel safe about going out to eat again until three months after the lockdown had been lifted.
Then, there are a plethora of new rules that restaurants in all jurisdictions need to follow.
For example, Georgia – one of the first American states to allow businesses to re-open – has set out 39 separate post-COVID rules for its food service establishments.
Like many jurisdictions, for example, both Georgia and Nova Scotia now mandate that restaurants can only maintain seating at 50% of their existing capacity.
Here, that means Nova Scotia’s foodservice sector basically faces a revenue cap.
While not a commentary on the appropriateness of the rule from a ‘flattening the curve’ perspective, the guideline essentially cuts the customer potential from, for example, a full house from 168 people daily to 84 (assuming 7 tables x 4 people x 6 sittings).
Then you add in an average of $80 per sitting per table. And the potential revenue on a good day drops from a little more than $3,600 daily to about $1,700.
Thus, enterprises have two options to maintain the five percent profit margin that Canadian restaurants average: cut costs or find additional revenue streams.
A prime area for Bent Ridge – or most restaurants – to cut expenses is staffing, generally 40% of a typical restaurant’s costs.
Bent Ridge usually hires six full-timers and other part-time workers to handle the summertime crowd.
Dodge doesn’t know his plans yet. But, without strong revenue growth, it’s not far-fetched to think Bent Ridge will not to re-hiring a full quota this season.
Still, Bent Ridge had some factors working in its favour during the lockdown.
For one thing, the Dodge brothers own their building.
“So, we don’t pay rent,” says Glenn Dodge who once owned the Northcliffe Tennis Club out in Clayton Park.
Also, the timing of Nova Scotia’s lockdown helped.
Bent Ridge – which is across the highway from the Martock ski resort – usually goes through a slow period in the months of April and May. That’s because the ski crowd has left for the season. And the summer rush hasn’t begun yet.
So, Bent Ridge lost revenue in April and May but not as much if the pandemic closure occurred in the peak summer months, Dodge says.
As well, Bent Ridge – and its suds subsidiary Bent Nail Brewery – sells by-the-bottle beverages either from its facility or by delivery, usually with Steven motoring around the province in his car.
So, people in Windsor and surrounding communities began buying more bottled beverages in the past few weeks, Dodge says.
They wanted to locally and avoid the long lineups that have popped up outside of most NSLC outlets.
“We don’t have lineups here,” he chuckles.
For its part, Rhubarb managed to keep its business running by getting ahead of the cost curve.
“We shut down a week earlier than we had to,” Buckle says.
That allowed the restaurant to start up its takeout business faster and more extensively.
Although the Peggy’s Cove area is known as a tourist spot, the various local communities have a growing population of retirees who proved to be particularly loyal during the closure, Buckle notes.
That helped, he says.
But, the summer – with its hordes of visitors – is the season when Rhubarb banks cash to tide the restaurant over the quieter winter months.
With a weak tourist season looming for Halifax, Rhubarb might face more of a cash crunch this year.
Still, Buckle is sanguine about the restaurant’s prospects.
“Diane and I have something like 70 years in this business,” Buckle says.
And you handle downs with the positive times in this industry, he shrugs.
