Perspectives from small dining businesses. Can they survive?
Avleen K Mokha
Recent measures to curb the spread of COVID-19, restaurants in Quebec can only offer takeout and delivery services until at least May 1, as per Premier Francois Legault’s announcement on March 22. Restaurants in Montreal’s Parc Extension neighbourhood have shut all eat-in services, but owners are concerned about the financial consequences of limited revenues.
Restaurants enforce hygiene measures, limit hours
Malhi Sweets is a prominent site for Indian cuisine in the neighbourhood. Gurnam Singh Malhi opened shop in 1996, one of the earliest South Asian eateries at the time. The restaurant began as a family business, with three employees working as full-time staff. Ordinarily, up to 45 people can sit and dine in the restaurant. Now, at most 4 people may line up.
Like many businesses that remain open, the restaurant marks distances with tape to ensure customers maintain physical distancing. Keeping a distance of two meters is recommended by world health authorities and enforced by Quebec and Montreal officials.
“This has not been a problem for takeout services,” Malhi said. “Especially as one person who comes to pick up food is usually taking servings for multiple people. Customers are used to calling us in advance to place orders. In this respect, the social distancing measures have not affected sales.”
Restaurants see fall in earnings
However, restaurant owners are facing a steep fall in earnings as eat-in services are their main source of income. Mid-March, Premier Legault said that restaurants should halve their usual occupancy to ensure social distancing. Then, as measures by the city government followed, all eat-in services became prohibited.
“The fall in earnings has not been staggered,” Malhi said. “It has been like being pushed off a skyrise.”
Another family business in the dining industry tells a similar story. Established in 1976, Marven’s is a Greek eatery being run by the second generation of the Kostopoulos family. George Kostopoulos said, “There has been a drop of about seventy percent,” referring to the sales in the second half of March.
Nantha Kumar is a Montreal-based chef that works out of space in a culinary school kitchen, and usually does pop-up shops at festivals and events. Nantha feels he has had an easier time pivoting to delivery than restaurants, despite abrupt changes to his summer bookings.
“When public events got cancelled, I decided to offer delivery,” Nantha said. “For me, the demand has more than doubled. But over the years, I’ve gathered a mixed bag of people who are stuck at home now.”
Sell off what you have, buy day by day
For restaurants, certain items became leftover as sales decreased due to the half-occupancy policy. As the city declared a state of emergency and shut all eat-in services, the piling up of perishable items became concerning.
The menu at Marven’s features steak, souvlaki, and mixed meat platters. “We had to throw a lot of perishable food, a few vegetables and some meat,” Kostopoulos said. “We buy things day by day for now. Hopefully things are back to normal by May 1, but if not, it will be a big issue for us.”
At Malhi Sweets, the relatively long shelf life of some Indian products has helped limit losses. Rice, flour, dried lentils, and some spices can last for up to a year. “We have enough dried goods for the two coming months,” Malhi said.
For dairy and meat, Malhi uses supplies which are local to Montreal, and thus does not expect trouble securing these items. However, he must factor arranging for certain items if closures are announced at the US-Canada border.
“Only a few vegetables that we need for Indian cooking often come from there, like tomatoes and cauliflower,” Malhi said. “We can get sent from India and Mexico. But because orders would come by air, that means the costs will rise for us. Still, these [vegetables] will still be available.”
Demand for delivery, but switching to delivery has its costs
In order to boost income, restaurants are considering delivery applications in addition to offering takeout. Such applications take a commission from restaurants that sign up to be advertised on the app. The commission percentage ranges from twenty to thirty percent from every order that gets delivered, anecdotal reports suggest.
Marven’s has been present on DoorDash. Kostopoulos says they decided to add themselves on an additional application, Skip the Dishes, after earnings went down.
“The applications charge us,” he said. “But nothing’s for free. The electricity, the gas, the bills are coming.”
Financial aid
As the COVID-19 pandemic has evolved, Prime Minister Justin Trudeau has announced financial assistance programs such as the employment insurance and Canada Emergency Revenue Benefit for employees whose jobs have been lost or affected due to the pandemic.
Small businesses in the dining industry can receive up to $40,000 in non-interest loans backed by the federal government under the $25 billion Canada Emergency Business Account program. Access to these loans will be interest free for the first year, as per Trudeau’s announcement on March 27.
“These schemes can really help us keep our business running,” Malhi said. “Until things look up, we will be able to pay for our groceries.”
However, owners want to understand the details of financial assistance plans. “My accountant is looking into how the government’s plan relates to our business,” Kostopolous said.
On March 30, Trudeau announced that small businesses who have seen 30 percent fall in revenue can qualify for a 75 percent subsidy. If eligible, smaller shops in the Montreal dining scene could keep their business open for takeout and delivery.
Food as connection
Owners are sympathetic to concerns that customers have during this time. “When customers can’t they can’t tell what precautions may or not be taking place, they might prefer to stay at home,” Malhi said.
“I work alone, but food is a personal business to me,” Nantha said. “Rich people and poor people, everybody needs to eat. It’s been meaningful to provide people with [food] so they don’t have to leave the house.”
When asked how the local community can support the family, Kostopoulous said, “By ordering food. We do our best. We are giving people and have been. We will help out people who are struggling too.”
This article was published on April 3 for the PX News print issue. Click here to read the full issue.
