Wage hikes could shutter more than one-third of Alberta restaurants

Restaurants Canada survey found that 35% of Alberta food-service providers are thinking of closing

Tim le RicheMore than one-third of Alberta restaurants may be forced to close due to the impacts of minimum wage hikes and other cost increases, a survey says.

“It’s alarming that more than one in three respondents say they’re thinking of closing up shop,” said Mark von Schellwitz, Restaurants Canada Vice-President, Western Canada. “There’s just no margins left. The cumulative impact of a sales decline combined with cost increases, many of them mandated by government policy, have had a big impact on our ability to create jobs. When our industry thrives, so do the communities that we’re in. When we don’t, those communities suffer.”

To compensate for the increased wages and costs, Alberta restaurants have hiked menu prices, reduced staff hours, laid off staff or stemmed hiring, the survey suggests.

Mark von Schellwitz
Mark von Schellwitz

Restaurants Canada represents about 30,000 Canadian food service businesses including about 11,200 in Alberta. It called on Wild Rose political parties and candidates running in the April 16 provincial election to tell voters how they will help the food service industry.

“We think it’s a crisis that has to be addressed by parties in the election campaign,” said von Schellwitz.

The association says salaries and wages represent about 29.7 per cent of restaurant costs. Alberta’s minimum wage rose to $15 per hour in October 2018. Alberta members told the association survey that as a result of the wage hike:

  • 94 per cent have increased menu prices;
  • 88 per cent have decreased staff hours;
  • 61 per cent have hired fewer youth for entry-level positions;
  • 46 per cent have laid off staff;
  • and 26 per cent have explored self-service solutions like touch pads and kiosks.

“Average sales per restaurant over the past couple of years have actually gone down over nine per cent,” said von Schellwitz. “That’s a significant decline in traffic.”

The survey was taken between Feb. 12 and March 9 with 203 responses representing 1,350 establishments, including table-service restaurants, quick-service restaurants, and other food-service businesses, such as accommodation, institutions and drinking places.

Restaurants Canada shared 16 policy recommendations with Alberta’s four major political parties on Jan. 14 in the hopes that they would be incorporated into all their platforms in the lead up to the next provincial election.

Those recommendations can be reviewed by clicking here. They include a freeze on any further minimum wage hikes, more flexible labour rules for jobs outside the 9-to-5 norm, carbon tax rebates and no provincial sales tax.

Tim le Riche is a Troy Media business reporter based in Edmtonton. 

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