Restaurants facing challenging times

NANAIMO: High food prices, tough drinking and driving laws and HST all ingredients for perfect storm.

The Modern Café is one of three major restaurants in the downtown core which closed this month.

The Modern Café is one of three major restaurants in the downtown core which closed this month.

A perfect storm of high food prices, new drinking and driving laws and the harmonized sales tax are putting the squeeze on downtown restaurants and causing some to close, says Peter Ertsos, owner of Diners Rendezvous.

The restaurant closed its doors two weeks ago, just a few days after the Modern Café and the Dancing Goat coffee shop closed, leaving a growing culinary void in Nanaimo’s downtown.

Ertsos said both restaurants and retail owners he’s talked to are having a tough time.

“The biggest challenge I see is oil prices,” he said. “It has affected not only food costs but everything we’re buying lately. Everything is outrageously priced and it’s all due to transportation costs.”

Ertsos, who has been in the restaurant business for 30 years, said he grew tired of working 14-hour days, seven days a week with little or no profit.

When the province introduced tough new drinking and driving laws, Ertsos said he went from placing a $4,000 liquor order monthly to just an $800 order.

Prior to that, food costs increased exponentially. In 2005, a nine-kilogram box of tortilla chips cost $18.76. Today the same item costs $36.

Last August, he said he paid $16.95 for a 11-kg case of bell peppers. In the winter months, that increases to more than $100.

Food shortages and an imbalance in distribution in North America have prompted imports from Europe and Asia, further increasing prices.

“The salad is still $7,” he said.

With restaurant margins at a razor thin three to five per cent per plate, too much is piling up on owners to make a go of it, said Ertsos.

Corry Hostetter, general manager at the Downtown Nanaimo Business Improvement Association, said her interviews with downtown Nanaimo restaurant owners suggests a natural progression of change.

“There have been some closures but you could say those are coincidence,” she said. “I’ve spoken with other restaurant owners and some are telling me they’re breaking records. The restaurant business is like that. Some open and some close.”

Talal El Bakkar, owner of Aladdin’s Café on Victoria Crescent, said outside influences like government legislation don’t bother him. He’s opening a second location on Nicol Street, just a few blocks away from his current location.

“We don’t really rely too much on alcohol,” he said. “When people come here they come here for the food. If they have a glass of wine, great, but we focus on food and atmosphere.”

He also keeps his overhead low, doing most of the kitchen work himself while keeping one or two servers on at any given time in the 35-seat restaurant.

El Bakkar does his own food prep and cooking among other proprietary duties, and he says he loves what he does.

“When you open a restaurant the thing is you can’t say I’m the owner and just go off somewhere on holidays. I have to be here from 10 in the morning to 11 at night non-stop. I do it because I enjoy it.”

Ertsos, who’s owned Diners Rendezvous for two and a half years, said he’s simply had enough.

“I’m done,” he said. “This was my 30th year in business and my final year. I’m never doing it again.”

Before moving on to other opportunities, Ertsos predicts that in a decade’s time virtually every restaurant will be a franchise restaurant.

“It’s just getting too difficult,” he said. “There are simply too few dining dollars and too many variables beyond our control out there for independents to make it.”

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