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Posted May 17, 2024, 4:25 AM
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Registered User
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Join Date: Dec 2015
Posts: 9,773
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Quote:
Soaring costs force Vancouver restaurants to close
Dozens of restaurant closures have ravaged Metro Vancouver’s dining scene this year.
That hollowing out is set to continue as all restaurant owners grapple with higher costs. The burden is particularly acute for smaller restaurateurs and those with a single location.
The pitter-pat of recent closures include the 12-year-old brunch eatery Heirloom, the seven-year-old vegetarian eatery The Arbor and the drink-forward Japanese bistro Black Rice Izakaya.
Decades-old fixtures have closed, such as Mary’s On Davie in March.
Cioppino's Mediterranean Grill & Enoteca co-owner Pino Posteraro announced at the Vancouver Magazine Restaurant Awards that he plans to close his 25-year-old Yaletown destination.
He called it “bittersweet” to win the magazine’s award for Best Italian – Upscale.
Awards aside, the hard truth was that the restaurant was losing money, and that this was too much for Posteraro, who owns a minority stake in the venture, and for his business partner, who owns the majority stake, he told BIV in an interview yesterday.
“This last year was the year that we were not able to be profitable,” he said. “Some months were better, but overall, it was negative.”
Posteraro said his restaurant’s rent is $60,000 per month and that this rate is high enough to make the business unviable when other prices are also rising.
“Everything costs more,” he told BIV. “Look at the prices for vegetables. Look at the cost of beef. It’s very hard to be profitable.”
The problem, he said, is not that his landlord intends to dramatically hike his rent when his lease expires at the end of October, but rather that the rent is already too high.
Posteraro convinced his landlord to let him stay until the end of December. He has no specific plans for what to do after the restaurant closes, although he mentioned spending more time with family.
“It's a busy time of year, and we have reservations until then,” Posteraro said of his decision to keep the restaurant open until December. “The landlord has been very kind to do an extension of the lease.”
He has made it a hallmark to provide extras to customers.
Cioppino’s provides patrons with fresh bread and a chickpea spread for free, he said. If there is a celebration at a table, the restaurant provides a free dessert.
Posteraro said he did not want to change those practices.
Costs will only increase at the end of the month, as B.C.’s minimum wage is set to rise by 3.9 per cent, to $17.40, from $16.75, on June 1.
The Canadian Federation of Independent Business released a report this morning saying that if the B.C. government were to mandate a $20 “living wage,” it would put up to 75,500 small businesses at risk of becoming unprofitable – something that would prompt business closures.
“When restaurants are not profitable for us, we shut them down,” Glowbal Restaurant Group principal Emad Yacoub told BIV yesterday.
“I shut down Trattoria at Park Royal last month.”
The devastation for restaurants was predicted.
Between 10 and 14 per cent of more than 15,000 restaurants in the province could close as a result of the federal government not extending its deadline for repaying pandemic-era Canada Emergency Business Account loans, BC Restaurant and Foodservices Association CEO Ian Tostenson told BIV last year.
Restaurateurs face challenging B.C.'s business climate
Yacoub said he now operates eight restaurants, including one in Toronto. “I’m working on opening two more in Ontario.”
Yacoub is not interested at this time in opening more restaurants in B.C. because of the business climate, he said.
He was recently offered the chance to buy a Michelin-ranked restaurant in Vancouver, but he passed up the opportunity, he said, adding that he could not disclose the name of the restaurant because he signed a confidentiality agreement.
“Big guys like me, we can weather the storm because we're like a machine and we know how to bring people to restaurants,” he said. “Small businesses in B.C. are struggling. It's not easy making money anymore in B.C.”
One of his restaurants – the Trattoria in Burnaby – has a lease soon up for renewal and Yacoub said he is working with the landlord to renew that lease.
Many of his well-known downtown Vancouver restaurants, such as Glowbal on West Georgia Street, Black+Blue and The Roof on Alberni Street and Italian Kitchen on Burrard Street, do not have leases up for renewal in the near term, he said.
“I am sitting in a good place,” he said. “But I know how much money I was making and I know how much money I'm making right now. We're not making the money that we used to make before. The reason is because the cost of everything went up sky high and it's very difficult to make money in B.C.”
Yacoub has dabbled in real estate. In 2014, he sold a property at 1328 Hornby Street to longtime restaurateur Umberto Menghi. Yacoub had operated the unsuccessful IK2GO fast-food bistro at the site, and Menghi was interested in not only buying the property but also opening the 5,000-square-foot, 240-seat high-end Italian eatery Giardino. The site is about half a block north of where Menghi for 37 years operated the similarly named Il Giardino restaurant, which followed a few years of operating other restaurants on that site.
Menghi yesterday told BIV that his restaurant is doing OK. Traffic is steady, although patrons sometimes cut back on how much they spend.
Regardless of how much his customers spend, Menghi makes less money because costs have increased and he has not raised prices to compensate, he said.
He does not want to push prices up so high that customers decide not to visit.
His average customer spends between $160 and $170, he said. That would put the price for a couple at around $330, so he does not want to risk having that couple decide to go to another high-end restaurant.
While Menghi is likely best remembered for his Il Giardino restaurant, which included a heritage house, he has operated many restaurants through the decades.
One venture was a fast-casual chain dubbed Umbertino’s.
He sold his Whistler-based Il Caminetto restaurant to the Aquilini Investment Group’s Toptable Group in 2017.
Menghi also provided early guidance to Posteraro as Posteraro worked at Il Giardino before he opened Cioppinos in September 1999.
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https://www.biv.com/news/hospitality...-close-8751417
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