Restaurants in Regina struggle to keep up with industry inflation
REGINA -- Local restaurants have had to consider cost-cutting measures as the industry continues to feel the financial effects of the pandemic.
As business gets back to normal companies are trying to make up for lost revenue, including food suppliers who have had to increase costs for vendors.
“What we are seeing right now is inflationary trends,” John Hopkins, CEO of the Regina and District Chamber of Commerce, said. “So the suppliers are going to pay more and they are going to pass on there costs and ultimately it gets passed to the consumer.”
Hopkins said for restaurants, who were already struggling in this pandemic, food costs are rising and they have to find ways to make up for it.
“At the end of the day if the business is not making money, it has to make a decision. Are we going to lay off staff, are we going to eat the costs or are we going to increase prices,” Hopkins said.
Tim Rogers, co-owner of the Lancaster, said since restrictions lifted on July 11 he has seen a small customer increase, so increasing the menu prices wasn’t going to help offset the costs.
“We are at 50 per cent capacity so you know raising our prices isn’t really an option and so it’s starting to become challenging to operate,” Rogers said.
He said rising food prices were a concern before the pandemic, but now it’s hard to keep up.
“Pre-pandemic the Canadian national profitability of restaurants was somewhere around four per cent, so that’s four cents on the dollar that restaurants were making and that was before the pandemic,” Rogers said. “It’s at that or worse now so that makes it extremely challenging to do a business.”
Instead of laying off staff or changing too much in the restaurant, he decided to start working with local producers.
“In Saskatchewan we’re in the middle of where all the food is made,” he said. “It has basically forced us go out and go right to the suppliers and stop going to the big suppliers and try and work with the local producers.”
“It keeps all our ones right in the province so it’s a win all around. For us it’s the way of the future and I think a lot more restaurants will be going that way too,” Rogers added.
Rogers is optimistic that by September there will be a small economic boom with people going back to work and school that will help bring back some revenue.
He said many restaurants and those in the industry are also looking to both the provincial and federal governments for help, in terms of more support or tax exemptions, until they can get back on their feet.