Businesses are reopening their doors across Canada as provinces ease lockdown restrictions. But even as revenues resume, profits remain elusive.
Most businesses must abide by a host of safety regulations – such as spacing out tables at restaurants, limiting the number of customers allowed in a building at once and providing protective gear. Such measures, combined with reduced spending by wary consumers, can limit sales and complicate the ability of many businesses to return to profitability.
“I think in most cases I would be surprised if many businesses turned a profit [before] 2021,” says Dan Kelly, president of the Canadian Federation of Independent Business (CFIB). “The good news is we’ve had some government support programs, but I think those are really just keeping many businesses on life support right now.”
A CFIB survey showed around 51 per cent of respondents have fully reopened (some of Canada’s hardest-hit cities, including Toronto and Montreal, remain locked down). Of those, around 30 per cent reported turning a profit. When factoring in partially open businesses, Mr. Kelly says that number drops to 17 per cent.
Rahim Manji, director of Hollywood 3 Cinemas, a chain with five locations across British Columbia – which has seen relatively few COVID-19 cases – says he reopened four of those locations on June 12, with stringent distancing requirements in place. He’s aiming to bring in around 50 viewers each screening, with four screenings a day in each cinema, for a maximum of 200 tickets a day at each theatre.
But Mr. Manji estimates each theatre would have to bring in around triple that number of customers just to break even.
The 50 patrons at current capacity will be separated by rows that meet health guidelines, Mr. Manji says. They’ll also pay for tickets and concessions at box offices located outside the theatres to reduce close contact with others indoors.
Before the pandemic, each theatre had the capacity to bring in around 3,000 people a day. Mr. Manji says he expects the biggest challenge for his business moving forward will be getting people to feel comfortable about sitting in a theatre again.
“People are conscious about their surroundings now, and they should be,” he says, adding that if there’s eventually “50-per-cent capacity in our theatres, then so be it. That should be the way then – as long as people are safe.”
Luvia Petersen, owner of Liquid Amber Tattoo and Art Collective, a tattoo parlour in Vancouver’s Gastown neighbourhood, says her business reopened on June 2 after closing down in late March. The parlour is operating at around 25-per-cent capacity, says Ms. Petersen, bringing in around three to six clients a day, compared with between eight and 15 before the pandemic.
Ms. Peterson estimates the parlour could break even if it were to hit 30 to 40 per cent of its former capacity, but even then, that level of revenue would limit her ability to hire contractors for social-media marketing and other support roles for the shop.
If the virus case numbers in B.C. continue to drop, Ms. Petersen says she might consider expanding her customer intake in July, though still not to full capacity. She says that a $40,000 government loan for small businesses and the rent relief her landlord applied for have helped ensure her business will stay afloat.
“I can’t speak to what it would look like if there was a resurgence or if we had to shut down again, but I’m a cup-half-full type of person, so I’m just trying to stay positive,” Ms. Peterson says. “I’m really hopeful that we’re through the worst of it.”
“For the majority of business sectors that depend on consumer traffic, it’s only when consumers are feeling comfortable coming back to the table that business will go back to normal,” CFIB’s Mr. Kelly says. “And for many, with the additional COVID-related measures businesses are having to take, it almost guarantees they will not be able to be profitable.”
Chartier, a French-Canadian restaurant in Beaumont, Alta., transitioned to takeout options on March 16, before restrictions were put in place. Sylvia Cheverie, who owns the restaurant with her husband, Darren, says business is down around 40 per cent and that she’s left with less than half of the staff she had before the pandemic.
Alberta has been allowing restaurants to offer dine-in options for weeks now, albeit with seating restrictions. But Ms. Cheverie says she doesn’t plan on opening her doors quite yet, as she figures out her business plan.
Ms. Cheverie says her team has been experimenting with a chef’s-table offering, which would allow only one party at a time to dine in on a given night. She’s also studying options for spacing tables out to allow more guests.
“The dining experience isn’t just about caloric intake,” Ms. Cheverie says. “When you have plastic dividers between you and the table beside you, it’s a lot more challenging to surrender your mental state into that beautiful dining mode.”
What would it take for the restaurant to return to profitability?
“You know what? I don’t know,” says Ms. Cheverie, noting the restaurant aims for a 10-per-cent profit margin. “We’re looking at this as an opportunity to look at our business in a different way ... trying to get back to a better place where we’re working more efficiently, where we’re doing more with less in a way that makes us feel good about what we’re doing. That’s what we’re focused on.”
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