Alberta restaurants face 'double whammy' as costs rise, sales drop: industry advocate

Restaurants across Alberta are barely getting by in the downturn, and the majority of them expect the situation to worsen in the months to come, says one industry advocate.

"Over the last year, our members have been facing a double whammy of double-digit cost increases combined with double-digit declines in same store sales. It really has been a struggle," said Mark vonSchellwitz, vice president ofWestern Canada for Restaurants Canada.

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Schellwitz said the poor exchange rate, new liquor taxes, and a "very aggressive"minimum wage increasehave on average resulted in ten to 16 per cent increase in costsacross the board forAlberta restaurateurs.

"There's many restaurants who are really surviving on a knife's edge right now," Schellwitz said.

He said restaurants are resorting to cutbacks, curtailing hours and reducing staff in order to lower costs.

"They're stuck behind a rock and a hard place when it comes to increasing prices, because when sales are already down, they jeopardize even more sales and customers leaving if they raise their prices."

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Schellwitzsaid the recent closure ofJanice Beaton's Farmrestaurantis likely part of a broader trend.

A recent outlook survey conducted by Restaurants Canadashowed that 75 per cent of the association's Alberta members expect sales to drop even further over the next six months, he said.

"Our industry is a very low-margin, competitive, labor-intensive industry at the best of times," Schellwitz said.

He said the last thing the industry needs are additional costs imposed by government.

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"Now is not the time to add costs with another aggressive minimum wage increase, for example, or with thecarbon levy," he said.

"We want to protect the 150,000 Albertans we employ, and we need all the help we can get to do that."