Turmoil, with a side of anxiety. Restaurants face uncertain future amid COVID-19

Ettore (Eddie) Pugliese was at home, self-isolating the night of April 19, meaning he couldn't be there to say goodbyeto his customers as the doors closed forever on hislandmark Toronto Italianrestaurant.

At age 81, and in precarious health,Pugliese had to stay away from the business he, along with his brother and father, had created63 years ago but has been forced to close because of the coronavirus pandemic.

"I can't describe that.I wanted so badly to be there," said Pugliese, who was co-owner of Vesuvio Pizzeria and Spaghetti House.

Asked about the future of the restaurant industry, he says:"I hate to even think about it."

Pugliesehas joined many Canadian restaurant ownerswho have been either forced outof business or continue to struggleto make ends meet. It hassome within the industry predicting an immediate future that'sbleak andraising questions abouthow restaurants might have to change.

"The scary part of it is just the unknown, notknowing what this industry is going to look like," said JeremyBonia, co-owner of the restaurants Raymonds and Merchant Tavern in St. John's."Obviously I can't see it going back to the way it was."

While various federal subsidy programs and rent deferrals have helped, Bonia had to shut down one of his restaurants, which just wasn't adaptable for takeout service; a move many restaurants have made in an effort to remain in the black.

Bonia has been able to keep the other open a few days a week.

"At some point we have to [fully] reopen. And when that happens,we don't know what that's going to look like in terms of capacity," he said. "Are we going to be half full, are we only going to be allowed a certain amount of peoplethere?"

There are questions about whether restaurants, which may have to adhere to physicaldistancing policies by spacing out tables andreducing the number of people within the dining area, can survive.

"Every restaurant that's opened, their seating capacity is based on a business plan that they put in place to maximize the very limited revenues that there are in the restaurant industry," Bonia said.

"That'spretty scary when you suddenly have to go to half the capacity of what you had before."

And it will prompt restaurant owners to go through the numbers, to determine if it's even worth staying in business, he said.

Physical distancing could also impact the number of kitchen staff, saysVancouver restaurant owner and chef Vikram Vij, who recently announcedthe creation of the Canadian Hospitality Worker Relief Fund (CHWRF) to support restaurant and hospitality workers financially impacted by COVID-19.

"If thehealth departmentsays the employees need two metresof space between each of them, instead of having six employees [in the kitchen],you're only allowed to have three or four. That's going to impact the menu selection. That's one deep impact."

That, says Vij, along with dining capacity problems, might be enough for owners to "just throw in the towel and just say, you know what, I would rather just go work for somebody else and not have the stress."

Other challenges includethe customers, and whether they will be anxious about returning to a social gathering such as a restaurant.

A recent Legerpoll found that 45 per cent of the public say theywould be comfortable dining in restaurants after the government lifts restrictions.

"There's a level of nervousness when you're around other people," said Bonia. "If we opened restaurants tomorrow,I think that's still there with people who are going to be looking at how close this person is sitting next to me."

Thousands forced to close

Restaurants Canada, an organization representing the food services industry, saysthat thousands of restaurants have already been forced to close for good, and more are likely to follow.

"It's going to be a complete destruction of some segment of the business," saidDavid Lefebvre, Restaurants Canada vice president, federal and Quebec.

"I would say especially the small independent operators are having a really, really hard time Those that did not have the capacity to go into delivery and take out."

He also pointsout that, unlike other businesses, stock in a restaurant consists ofperishable goods, meaning that those forced toclose, or cut back significantly, lost alargepart of their inventory.

As well,restaurants are quite labour intensive andneed more employees per dollar of revenue than other industries, Lefebvre said.

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"The amount and the quantity of people that had to be taken care off, laid off, furloughedwas quite higher compared to gross revenues than other businesses," Lefebvre said.

There arearound 98,000 food service establishmentsin the country, and about 94 per cent of those have a payroll under $1million, he said.

"You have a whole gamut of small players, which, of course, haveless financial backing, less possibilities to raise capital. And so they were hit harder thanretail or grocery stores."

Restaurants that have been able to ramp up their takeout services might be bringing in 10, 15, or 20 per cent of the usual volume, says Lefebvre. But for the most part, it's not enough to offset dining room sales, andnot something they can builda viable business over time, he said.

"Some can barely turn out a profit or barely break even. For the overwhelming majorityit's a drastic reduction in revenues."

New services here to stay

Along with boosting takeout services, some restaurants are adding other services such as providing groceries or do-it-yourself meals.

PatrickSaurette, owner ofThe Marc in Edmonton, whichnow provides groceries and curbside pickup service, says he believes those services are hereto stay.

"I think this is going to be an important piece of our economy in the hospitality industry. It's just servicing those needs. People's habits are going to have been changed."

It also means, with potentially fewer diners, that they may have to look at other changes which include a leaner staff, higher prices, hours, and how theyhandle reservations, he said.

In the coming months, Saurette, who's also the former chair of Restaurants Canada,believes 30 per cent of the sector's businesses will be wiped out.

But he predicts there will be creative solutions to some problems and that, in about a year, a resurgence of very strong independent restaurants.

"It's just too large of a piece of our economy for it to entirely go away. I think it'll strengthen."