N.S. restaurants struggling to stay open amid rising food and operating costs

Even though Ivan Chan’s restaurant is only open four hours most days, he works 14 to 16 hours in an effort to keep everything running.

“I’m free, right? That’s the only way to lower the cost right now in my place,” said Chan, owner and chef of The Orient Chinese Cuisine in Bedford.

“I try to keep the overhead low because the income stream is a lot smaller than before.”

When he says “before,” he’s talking about the COVID-19 pandemic.

Ivan Chan, chef/owner of The Orient Chinese Cuisine in Bedford, says high food and labour costs are leaving his business in the red. (Dan Jardine/CBC)

Chan admits he’s not making money — and he’s not alone. According to the Restaurant Association of Nova Scotia, nearly half of the province’s restaurants are operating at a loss or merely breaking even.

“This is largely due to an increase in expenses, not just food costs, but also utilities, insurance, equipment, etc.,” said executive director Natasha Chestnut.

“The industry has tight profit margins, sitting on average just under four per cent, so every expense or additional cost affects their bottom line.”

Liz Ingram-Chambers said any restaurant making four per cent is “one that will survive.” She owns Le Bistro in Halifax, and has been watching her bank account drain in recent months.

“Every day it’s a fridge, it’s people calling in sick, your ovens are breaking, dishes are breaking,” she said. “Sometimes you get worn down a little bit in this industry, especially if you’re an owner/operator.”

A woman with shoulder length blonde hair wearing red glasses and red lipstick is shown smiling in her restaurant, which is also decorated in red. — Liz Ingram-Chambers, owner of Le Bistro in Halifax, says she has reduced hours and cancelled live entertainment in order to reduce expenses. (Angela MacIvor/CBC)

Both Ingram-Chambers and Chan said food and labour costs are their biggest expenses.

When it comes to food, Chan said everything seems to be 25 to 30 per cent higher than it was before the pandemic.

“And you’re looking at most of the basic stuff like eggs and oil,” he said. “So it’s like a double-edged sword right now. You cannot do anything right at this point.”

Chan said he’s only increased menu prices by five to 10 per cent because he doesn’t want to lose customers.

It’s the same for Ingram-Chambers. She has increased prices but tries to keep them “fairly low and reasonable.”

“If we can get a better rate on something, we’re using those ingredients in our nightly special. And we’re doing a lot more takeout now than we ever have,” she said.

A pizza is shown on a white plate at a restaurant. — Since the pandemic, restaurants have been struggling with increased food prices and weighing how much of the increase to pass along to customers. (Paul Poirier/CBC)

Ingram-Chambers said minimum-wage increases over the last four years have resulted in an $8,000 biweekly jump in her labour expenses. She said she’s paying 27 staff members $34,000 every two weeks, compared to $27,000 in 2020.

She said every time an employee has to stay on shift longer, she gets stressed.

“Paying for prepping or having lots of people in my kitchen, I’m like OK we’re not that busy. Why is everybody here? Because you get nervous and then you get cranky because you’re watching your money fly out the window.”

Since COVID, she has also scaled back her hours of operation and cut out live entertainment and advertising. Her philosophy is getting people through the door and hoping they come back.

What customers think

For Bea Rhanis, dining out has become a luxury she can’t afford. She said the last time her family of four went to a restaurant a year ago, it cost $300.

“Don’t get me wrong, I love going out but these are different times and I just decided that I can’t afford it. I mean in reality I can, but I actually don’t want to because I think it’s ridiculously expensive,” said Rhanis.

A woman with curly brown hair and glasses is pictured looking away from the camera. — Bea Rhanis says the last time her family of four went to a restaurant, it cost $300. She said it has become a luxury she can no longer justify. (David Laughlin/CBC)

Reign Sherrington describes himself as a “relatively broke student” who loves to socialize with friends, but often has to choose the cheapest option.

“When me and my friends are planning where to go, we’re looking at spots and we’re like oh that’s a bit too expensive. And we all try to find something that works with our budgets, I would say more so than we did a year ago,” he said.

WATCH | These diners say high prices, smaller portions have them eating out at restaurants less:

Inflation is taking a bite out of diners’ appetite for restaurants

On the streets of Toronto, diners told CBC News that high prices, lower quality and smaller portions have them eating out at restaurants less often of late, a trend which is pushing many restaurateurs to the brink of bankruptcy.

With these sentiments in mind, Chan understands the restaurant industry is only getting more difficult.

“I just hope people realize what’s happening,” he said. “I’m a big advocate of support local and I really think people need to keep that in mind because there’s a lot of your beloved restaurants that could disappear instantly and you don’t even know what happened.”