As we hear of restaurants and food service outlets throwing the towel and closing their doors permanently on a regular basis, some new numbers from StatsCan provide much of the explanation behind these developments.
Here’s how bad it’s been for businesses in the food and beverage sector. Sales in bars and taverns in the country went up 40-percent from June to July as more and more enterprises were allowed to re-open with restrictions. That increase took them to a place where revenues were still only half of what they were in the same month last year.
The challenge in this for shop owners is that they have invested in infrastructure to support 100-percent of their revenue potential, not 50-percent. So they simply can’t meet their obligations for buildings, leases and equipment from cash flow…they have to hit their own financial reserves. And for those crying ‘Uncle”…they’ve hit the end of their savings.
Generally, we’re doing better than that in Saskatchewan where revenues for all players in the food and beverage business were half of last year’s $160 million level by April but by this past July it was $140 million, only 13-percent behind last year’s pace.