‘The future is a little less bright’

Two more downtown St. John’s restaurants to close

The downtown St. John’s food scene is changing, with a couple of restaurants deciding to close early in the new year.

Over the weekend, Get Stuffed announced in a social media post its decision to close as of the end of February after 17 years in business.

“We are deeply grateful to the people of our community for the support you have shown us over almost two decades,” read the statement posted Saturday on its Facebook page.

Meanwhile, another downtown restaurant’s future appears to be dependent on it finding a new owner. Last month, Mediterraneaninspired restaurant EVOO closed and was put up for sale. Specializing in wood-fired pizzas and fresh pasta, it’s been in business for 11 years in the historic Murray Premises property.

An online real estate listing for the business offers all restaurant-related equipment and supplies, noting a new lease would be available to sign that would include seasonal use of the courtyard area off Water Street. On Google, the business’s closure is currently listed as temporary.

While the restaurant’s owners could not be reached Monday, Feb. 6, for an interview, Get Stuffed cited a number of factors that contributed to the closure in its post, which received more than 1,000 likes on Facebook.

“The past three years have been challenging. We have been faced with many obstacles due to the pandemic, the pedestrian mall, staff shortages, and rising costs. The future is a little less bright than it once was. This decision did not come easily. However, as the landscape for small business continues to change we feel it is the best decision for our family at this time.”

This time last year, downtown restaurant Seto Kitchen + Bar announced its closure after six years, citing financial strain as a factor. The Fort Amherst Pub in Churchill Square also closed around the same time. Mickey’s Sandwich Shop closed downtown last April and attempted a comeback in the summer, but has since closed for good.

A number of businesses on Duckworth Street — home of Get Stuffed and Seto — publicly voiced concerns about the seasonal pedestrian mall on Water Street, claiming its existence kept people from venturing to Duckworth Street.

A portion of Duckworth Street was added to the pedestrian mall in 2021, but it was not included in 2022.

HARD-HIT INDUSTRY

Richard Alexander, Restaurants Canada’s vice-president for the Atlantic region, noted January and February are traditionally very slow months for the food-service sector, so the timing of the closures is not surprising, nor are the reasons for doing so that Get Stuffed cited.

“The industry was the hardest-hit industry in Canada during COVID,” Alexander said.

With restaurants forced to close for significant stretches and rely solely on revenue from takeout orders, many owners had to take on personal and business debt in order to survive, he said.

“Now that the restrictions have been lifted and people go around and they see people out in restaurants enjoying life again, they think everything is fine,” he said. “But the reality is that the inflationary pressures — inflationary costs on food products and utilities — has really eaten away any ability to make a profit, to the point where about half the table-service restaurants right now are operating at a loss or break-even.”

Profit margins tend to be tight in the industry, so inflation has made doing business all the more challenging, Alexander said.

“We’ve seen utilities go up by six per cent. Beef has gone up nine per cent. Seafood, 11 per cent. Chicken, 13 per cent. Cooking oil went up 40 per cent. Then on top of that, you’ve got the challenges with accessing labour, because a lot of folks left the industry during the lockdown.”

Rising expenses could lead owners to increase prices for customers, Alexander said, but that generally won’t work out. He added that restaurateurs are more inclined to try to find ways to reduce expenses through ingredient choices or by closing on days of the week that tend to be slow for business.

“You can increase costs a little bit, but because the restaurant industry is based on disposable income, when folks are seeing inflationary pressures themselves, the discretionary income is the first thing that gets cut. If a restaurant was to increase the price of a meal by 40 per cent, like we’re seeing with cooking oil, customers would balk at that.”

On the labour side of things, Alexander is hopeful the Newfoundland and Labrador government’s ongoing push to welcome more immigrants will benefit restaurants facing staffing challenges.

He also noted inflationary pressures have started to level off and may even, in some cases, go in the opposite direction.

Restaurants Canada is also advocating for the federal government to defer an excise tax on alcohol sold at restaurants that would amount to an extra $30,000 expense in some instances.