As the government is working to ensure the easement of lockdown and kickstart of economic activities, there might be more problems in the offing for some businesses.
Food vendors, restaurants, eateries, diners, and such other establishments make up a $12 billion industry in all of Alberta. With more than 11,000 locations scattered around the province, the food industry represents a decent 3.4% of the total GDP in the province.
Owners of these establishments have, however, stated that they do not think they will be able to resume for business when the lockdown eases.
Challenges facing Food Service Business
A survey conducted in the province by Restaurant Canada shows that a frightening 7 out of 10 respondents do not believe that their business has what it takes to get back on its feet. The issue is due to not having enough liquidity to pay vendors for their food items, handling rent, and managing other expenses.
The ones that believe that they can still open are looking at a bleak future in the next three months. That is a short-term outlook and impacts how they see the viability of their business in times like this.
Most of the problems here stem from the fact that vendors supplying fresh produce to these food businesses might not want to take credit payments. Seeing as the economy is just starting up again, the demand will be supplied to only those that can promise instant payment to these vendors too.
That leaves most of the businesses that do not have enough in reserve at the bottom of the pecking order. That will take business away from them since their customers would prefer to go where the food is readily available instead.
The survey also shows that about 20% of food business owners have a landlord who is not willing to consider rent relief. Thus, they have been paying their full rent even though the business has not been moving.
On the back of that, they will still be required to pay this full rent once the lockdown is eased. In line with that, 14% of independent restaurants were not able to make the rent for April – and a further 20% won’t be able to pay their rents this May.
Call for Help
Restaurant Canada, who surveyed this area, notes that things do not have to be as bad. Steps should be put in motion from now on, though, if we are to see any changes at all.
On that front, it is expected that plans be put in place to provide rent relief to commercial tenants. A broader relief program should also be implemented to accommodate businesses that might not have met the initial requirements.
In the same vein, capital relief should be provided to most restaurants to open. These businesses have exhausted most of their spending money and even reserves during the lockdown.
It is just logical that they get the funding and backing needed to get back on their feet.