Faced with rising costs, some N.S. restaurants close, while others adapt

After enduring COVID-19 lockdowns, some restaurant owners in Nova Scotia are making difficult decisions as high costs brought on by inflation shrink their profit margins.

The co-owners of Fresh From The Oven, a dessert shop and restaurant in Greenwoood, N.S., decided to shutter their business last month after finding out their rent was going up by half.

"Our profit margins [are] getting smaller in every restaurant," said co-owner Liz Stevens. "And then to have a $1,000 to $1,500 hit at the same time come January? What's that going to do?"

Stevens said the prices of everything from dish detergent to chicken breasts have risen significantly in recent months.

Stevens and her business partner and son-in-law, Dan Crouchman, received a $40,000 small-business loan from the federal government, which Stevens said is now a "mountain of debt" for the restaurateurs.

"At the end of the day, I didn't want to fail," she said. "And I didn't want to fail the community at the same time."

Gordon Stewart, the executive director of the Restaurant Association of Nova Scotia, said government supports helped get restaurants through the lockdowns.

"Now there's nothing, so everybody's on their own," Stewart said. "They have less money to pay rent, they have less money to pay food, everything overall."

Stewart said food costs for restaurants went up about 18 per cent from April 2021 to April 2022.

"That's a huge jump," he said. "[It's the] largest we've ever seen in our history."

Stewart said he expects more restaurants in the province will close permanently as the costs of rent, food and supplies continue to rise and a labour shortage plagues the sector.

He said some restaurants have had to pass on a portion of their increased costs to customers to remain profitable.

Mona Theriault, owner of the Green Elephant Cafe in Kingston, said she hasn't raised her food prices in almost two years. Many of her clientele are seniors on fixed incomes, she said, and she's "fought it" as much as she can.

"I've been very lucky not to have to do any drastic price raises," Theriault said. "That is going to have to change fairly soon."

She said the biggest cost increase she's noticed is packaging. She's started charging for takeout cups, which she said cost her $0.60 each.

Staying busy, limiting waste key

Theriault credited her customers for keeping the restaurant busy and her staff for limiting food waste to keep costs low.

"I'm very proud that we've been able to not only survive this but grow during it," she said. "We can do everything 10 ways to Sunday but unless people choose to come through the door then we're not here." 

Stewart said he expects food prices to settle eventually, but in the meantime restaurants will have to change how they do things.

"New restaurants will have to look at, 'What size [do] we open up?'" he said. "A much smaller size is much better to control."

He said restaurant owners should review their current rental situations to see if there's a "better deal to be had" elsewhere.