Independent coffee shops feeling the pinch as pandemic dries up income

A number of independently owned coffee shops have closed in Waterloo region over the past few months, while other shops have had to reverse course on plans to expand and rapidly change the way they do business.

After opening Monigram Coffee Roasters in 2012, Graham Braun, in partnership with his wife Monica, began to grow the business outside of their initial downtown Galt location.

They began to create partnerships with other businesses in efforts to expand and were eventually spreading out all over Waterloo Region, but then, the COVID-19 pandemic hit. 

"We pivoted as best we could and as quickly as we could to online sales with our beans and equipment and started delivering stuff all around the region in a contactless way," Graham Braun said.

They temporarily closed all their locations, laid off their staff and alongside many other small business owners in the region, they were forced to take a serious look at their business model.

Andrew Thom, owner of Show and Tell, a specialty coffee shop in downtown Kitchener had to do the same.

Thom had opened Special Delivery Shop — a tea bar and vintage clothing store — about a year before the pandemic hit. He, too, temporarily closed both shops and laid off his staff.

Because Show and Tell was the more lucrative business, he put all his energy there, selling coffee beans to go and home brewing equipment. When Special Delivery Shop's lease was up and the permit was running out, Thom decided to close his newest venture permanently. 

Shops close

Phong Tran owns Matter of Taste, a 16-year-old coffee shop in downtown Kitchener. Just three years ago, Tran and his wife opened their second location in Waterloo's tech hub. With foot traffic down and the majority of tech workers working from home, Tran made the tough decision to close this new location permanently. 

"The coffee business relies on foot traffic. The downtown [Kitchener], and uptown Waterloo major employers are not coming back to work," Tran said. 

While Tran's downtown location is still open and has received a lot of community support, paying rent on two locations just wasn't manageable with the decrease in customers. He says his Waterloo landlord was also unwilling to apply for the rent subsidy program as the paperwork was gruelling. 

When the time came to allow customers back inside for takeout, The Brauns decided to close both Monigram Midtown in the Rego Realty building and their location in the Old Post Office. The Old Post Office location closed primarily because their goal with that space was to host larger events, a goal that now appears far off. 

As the pandemic progressed, coffee shop closures became more and more common across the region. Just recently, DVLB in uptown Waterloo and its sister location Blackwing, in Galt, have closed their doors permanently.

CBC News reached out to the owner of these two coffee shops but she declined to comment on why. 

"For anybody who was taking a gamble on growth, which you do in business anytime you want to grow what you're doing, there's always a risk, the timing was just [unfortunate] for some people," Thom said. 

Chains vs. independents 

"From our perspective, what you're getting when you go to a good quality, independent shop, is a trained skill set using high quality materials — and these things aren't mutually exclusive. They have to be done in combination," said Les Kuan, the technical director of curriculum for the Canadian Barista and Coffee Academy.

He says small shops will have to make changes to their offerings to give customers a reason to "get out of safety of their safe COVID cocoon," and make a stop at an independent shop instead of going to a drive-through.

Thom said accessibility is important at Show and Tell and that ego can't get in the way of making a "double double" if a customer comes in and asks for one.

"That demographic has definitely come in, and we've stocked our shelves a little bit more accordingly as well so that we do have something for everybody," he said. 

'Looking at an empty shop'

Shops are also grappling with a loss of ambiance. Prior to the pandemic, a coffee shop was a great place to meet friends, to work on school assignments or freelance projects.

Show and Tell, Matter of Taste and Monigram have all halted indoor seating in efforts to keep both patrons and staff safe. 

"If you stay a little bit, you hopefully buy a little more and then same thing with, if you stay a little bit, you're also adding to the atmosphere of the shop," Tran said. "So now, you're always kind of looking at an empty shop. It's hard to keep the energy up when you keep seeing an empty shop regardless of how many people walk through the door and buy a take-out coffee."

Thom, however, has enjoyed the quick interactions with customers. He says this new method of service reminds him of European espresso bars. 

"This has been a neat experience and an unplanned thrust to rise to the occasion and roll with the punches and try to be as intuitive as possible," Thom said. 

Braun said that plans to grow Monigram won't be completely canned but will need to be re-thought. 

"We're sure we're still on a growth path," Braun said. "That could mean more coffee into retail situations, and it could mean other retail locations for us in the future, but we're going to be pretty cautious about that until we see how the rest of the re-opening goes and where the new world sits months from now."