restaurant closures? [General]

2009 Mar 24
at least 3 restaurants (soora, amate, diwali) i've given positive reviews to have packed up. Aside from making me sad / giving me a complex, i'm wondering if there's an actual empirical increase in the numbers of closures (that can be correlated to the economic downturn)? Or, is this just an impression ... maybe i've become hypersensitive to these trends since joining Ottawa foodies?

As something of a counter to what i guess is the conventional wisdom, i stumbled across a discussion in non-food forum thread claiming an increase in the number of restaurant openings and traffic (in the poster's community, somewhere in the US). Whatever the case, I'd guess there's a lot of confounding variables that intersect w/ these sort of trends, e.g., the type of restaurant, their target clientele, etc.

So, any statisticians, city employees or food economists that can shed light or speculation on the numbers? And, not to foist work on FF, perhaps an aggregation of closures (and openings) in a given year might be an interesting data point a site like this could provide? (sorry FF ... just curious about the numbers, is all.)

2009 Mar 24
I work in corporate and commercial banking. Restaurants and retail stores are very high risk ventures, and most banks/FIs will only lend to the cream of the crop (ex - a company that owns 8 Tim Horton's locations). The rate of failure even in good times is astounding!

The number of closures is most definitely attributable to the economic downturn. Eating at restaurants is a luxury and success is highly contingent on factors such as price, location, and consumer discretionary income among other things. Chimi and I were talking in the chat forum yesterday about how companies are reigning in on expensing lunches/dinners. Everybody is tightening their belt, the federal government included! Throw in the OC Transpo strike, and I'm sure those reasons alone were just crippling to some Ottawa restaurants.

It's a sign of the times, unfortunately.

2009 Mar 24
The restaurant business has always been a tough business.
Your overhead costs are very high and face it, food spoils. Most restaurants make most of their money of alcohol sales and also the fact that alcohol never spoils. Having come from Winnipeg, I know a lot of markets aren't willing to pay for the sweat and tears go into cuisine quite to the extent that they do in say, France.

Restaurants know how many covers they need to do to pay the overhead for the night and then start turning profit. You lose a lot of money during slow nights.

The economy has prompted more people to pack their lunch, cook at home or settle for less expensige alternatives. Naturally, grocery stores have been doing well in contrast.

2009 Mar 25
I am not an economist by any stretch of the imagination but the recession combined with the seven week bus strike didn't help the downtown area at all. I personally found it very quiet downtown during the bus strike especially the market area. Straying a little off topic I remember going into Loblaws on Rideau on a Sunday afternoon just before Christmas and the steady stream of traffic I am accustomed to seeing there just wasn't there. Plus the retail space downtown is expensive. I noticed alot of my friends rethinking their spending habits what with the shaky economy and company closures.

2009 Mar 25
It's amazing how close a lot of restaurants, even ones that seem incredibly successful, operate to cost.

Just as an example, my fiance did contracting work for a certain Ottawa coffee chain in January, and still hasn't been paid. Usually, there's a 60 day hold for cheques for contractors, so okay you wait 60 days to get your money, which it fine. However, he called them yesterday (it's been longer than 60 days) and they actually cannot afford to pay him until April. They *could* cut him a cheque, but it would bounce. In addition to being mildly annoyed by this, I also find it fascinating, given how busy this coffee shoppe tends to be, at all times.

I can only imagine how difficult it can be for other vendors who are not as busy.

2009 Mar 25
the resto business is very tough
and there are many factors that make for a sucessful one or a failing one
but the biggest factor of what where and why, is simply a shrug of the shoulder

from my observations from being in the industry for so long and having owned a "sucessful" resaurant for my last two years in Seattle:
location
accessability
concept
food!
service!
doing the little things right while still seeing the big picture
word of mouth
easily remembered telephone number
getting resovations correct
remembering regulars
SMILES!
atmosphere and ambience
etc etc etc

even getting all those things right, you can still fail
and please note: a successful resto makes a profit of 5% of operational cost on the average yearly

some owners are very very lucky and for no reason other than karma smiling down on them, make it

Chefs in Canada are sorely underpaid as are most kitchen workers
servers can make more money a year working 3-5 hours a day 4-5 days a week than a Chef working 12-16 hours a day 5-6 even 7 days a week
(where are the labour laws?)

the Owner of the resto I currently work is very fair
she gives the servers the normal minimum wage as opposed to industry minimum
She constantly makes sure I am not overworked but when there is work to be done I lead by example and will not finish til what needs to be finished is

She is far from making money hand over foot
and this season with the transit strike, parliament being wishy washy, and the recession has bankrolled the resto from her own personal funds from the start of the year but another year like last, and She and I might both be setting up shop elsewhere...well I will, she might retire........

nuf said

2009 Mar 26
I live and work in Regina, which is the best economy in North America right now - even so, the media has saturated people's perceptions that they need to spend more carefully and save for a rainy day.

I can say that business in the restaurants that I work in are ABSOLUTELY slower right now then they were a year ago at this time. I suspect that people are saving up for "special occasion" dinners more than casual everyday dining more than they used to - so in my experience the weekends are not affected too much; still a full restaurant, however its the weekdays - especially weekday evenings when you can't even count on the business lunch crowd, that are total killers.

If you only serve two tables of 2 in a night (so, say $100 total depending on the cost of the dinners/drinks) - and that is becoming more frequent on weeknights - you still have to pay at least a server, a cook (not only for cooking time, but for advance prep time as well), a manager, and a dishwasher. That $100 doesn't stretch that far between that many people's wages - you would lose LESS money by closing for the entire evening - but that's the rub, you always think - well WHAT IF we get a few walk-in tables, all we need is another 5 top and a 4 top and we're back in it - but you have to take that chance and risk losing money. If you have a small restaurant - say 40 tables, it is impossible to make up the slack from the weekdays on the weekends because you can only get so many people in - this equals constant deficit.

If that happens weeks after week, a restaurant (especially a newer restaurant that has not yet established a regular clientele), will fold in no time. Absolute connection to economic downturn IMO.

2009 Mar 26
Food Is Hot - Isn't that the truth! The others here are speaking about the general economic situation and how it effects the restaurant biz... that makes things difficult enough... but then add to that the "unpredictable".

I've said it before here, one thing that is going to see quite a few Ottawa Restaurants go down in the next two years is the construction that continues on Preston Street. The City has planned to make changes, all well and good, but to do so over 3 years time is ridiculous... the restaurants there are truly suffering during the summer months when The City rips up the street.

Last year many places suffered (and there were some closures), and to think they have to look forward to 2 more summers is crazy. They should be doing one part of the street at a time instead of the whole thing over 3 years. The lane closures, lack of parking, and dust is wrecking havoc with the small guys business (and patio season). Those places that "hung on" thru 2008 may not be able to do so in 2009 and 2010. Absolute craziness.

2009 Mar 26
thanks all for the insights, and to Obi & FiH, that "insider's perspective" is most informative. By pure coincidence, i had lunch yesterday w/ a friend, a former chef (Ottawa and west coast), whose response to a similar question echoed almost exactly what you both mention about the 5% operating rule, the constant struggle against deficits, staff exploitation, and that invisible and not always well understood hand of KARMA that blesses some restaurants and sinks others. (Its also a refrain i heard often from my mother who operated a simple fish 'n chips place for 8 yrs.)

And yes, those road closures! I was thinking about this in relation to poor Bank St. and to an extent, Wellington Ave, both veritable dust-bowls and appetite killers the past year(s). I did sort of enjoy Wellington's pedestrian-friendliness after the construction left at night, but it must have had a negative effect.

Suffice to say, reflecting on the times, i tipped more than normal yesterday.

2009 Mar 26
Itchy
road closures and construction does hurt
I often wonder why the workers hang out on Sparks and then as soon as it is 12:05 start hammering, and digging, and making all other annoying noise (IE the beep beep beep of a backing up bucket truck) or resanding the tiles right before lunch while the patio is about to open

speaking of patios, some areas, rely heavily on the patio season to carry them through the rest of the year and last year sux'd
during lunch most times was fine but trying to get a dinner crowd on a pedestrian mall in the middle of downtown when it is pouring is nearly impossible unless they get caught in it and while the storm away nursing a cup of coffee

you tipped more yesterday, bless your soul, that helped out the server a bit but that does not help the resto
helping restaurants is visiting more often not just on special occasions
(not a guilt trip just stating to all what is needed)

I actually convinced the Owner to reduce some prices and let me up the portions abit showing here that her foodcost is skewed since instead of doing a hard inventory of the goods

perhaps we are still abit pricey but I offer the best I can find while being eco-sensitive,further advancing the resto to GREEN (which is not cheap), utilizing local as much as possible, offering dishes not found often found elsewhere so patrons aren't bored of the menu and I have set a cap on the price I offer on my specials
also on certain days, I run two with one bargin minded while not skimping

my next agenda is to convince the Owner taking 8$ out of a patron's wallet 3 times a week is better than taking 40$ once a month and an interesting concept:
not paying attention to foodcost (% it cost to produce a dish) but rather $ to bank (meaning how much is actually made on a dish)

ie
7% foodcost of a bowl of blah blah soup at 6$ putting 5.58$ in the bank
but rather
say and entree salad or a bowl of curry for say 15$ that has a food cost of 30% but banking 10.50$ per item sold
food cost is a convention held by accountants and bean counters

paying bills is what is generated to the bank

oh by the way
most new restaurants are graced with about a intitial 3 months of popularity then people grow bored unless it is phenomenal and then thinks peter out
3 months into business is when the money investors expect their first repayment also vendors starting knocking hard on the doors and banks start calling
so many just cut and run or struggle til they are just worn down and walk away bankrupt


2010 Jan 13
Jazz'oo now closed
38K+ rent in arears

2010 Jan 13
I always thought, Booze is where the money is.
;-)

2010 Jan 13
Allow me to cry crocodile tears for Jazzoo, they who hid from OF reviews through threats.

2010 Jan 13
I too will be shedding crocodile tears over Jazz'oo. What goes around comes around.

2010 Jan 13
I for one feel for the staff that lost their jobs....right after Xmas is a tough time to be looking for work...

Terry

2010 Jan 13
I agree that Terry makes a good point... when a business fails, there is a lot of other people that get hurt in the fall-out.

Hopefully the "other" folks at Jazz'oo will find new jobs soon (think they must have been in a desperate situation to work there under those conditions to start with... basing that on the Reviews that I read before they were removed. I think that if the Owner was threatening people he couldn't "see" on the Internet, I can only imagine what he was like to work for).

2010 Jan 13
My thoughts are the same as Food & Think's, but the owner gets little sympathy from me in that case.

2010 Jan 13
I hate to go back all the way to the top but I have to make mention of closures...

Itchy feet refers to Amante & Diwali closing, I can tell you that both those places closed because our city gov't doesn't care about small business. They can put bridges up in 24 hours but they can't find a more efficient way to do road construction...

Mark at Amante had a great little product but got noticed far too late, Ram @ Diwali didn't stand a chance....

The construction workers ate, smoked & talked far more than worked, it was frustrating, you're told one day that their 2 months ahead than the next it's 3 months behind.

None of us could keep staff, they were making NO MONEY, Ram's wife was cooking in the end, they had 1 or 2 employees, it was especially sad because they both (Mark & Ram) have young families.

I really feel for the other areas in town that have had to deal with this agony & when the tunnel gets built downtown, good bye rideau centre....!

Terry


2010 Jan 14
For the record, Soora (mentioned in the first post) has reopened under new ownership.

*Begin rant*
Bank st. businesses took a beating during all the construction, including my local bakey, Maison Baguettes, which folded. Farewell tasty Saturday morning croissants. Not quite sure why construction couldn't have continued into the evening and on weekends to get the job done sooner.

The one positive side to all the construction was that it was good for the lungs. With no traffic, restaurants along Bank could throw open their windows in the evening without bus fumes seeping in and choking the customers. ;-)
*End rant*

2010 Jan 14
I am glad that Soora has reopened in some form. My heart goes out to the poor folks at Amante and Diwali and I hope they were able to get out without losing their shirts. Please let us know Terry, if either of them tries the painful task of rentering the market so that we can frequent them.

2010 Jan 14
It is very sad that a lot of businesses closed down, espescially restaturants and I think that we can help it, if we go to local restaurants and support them it will be very helpfull. Our family is not a big fun of eating out but this year we decided to go at least once a month to restaurant and support locals.

2010 Jan 15
A couple of places that I have noticed that are now closed:

Hot Peppers on Somerset has a sign Closed temporarily due to lack of kitchen staff. However, the business is also for sale.

The Persian place at the corner of Irving and Wellington now has a for rent sign in the window(Khartoom? Something of that nature.)

2010 Jan 23
Pan> I could not keep working there
I gave em a month but without the Lady who taught me Thai food there and her ex running the place willynilly, I washed my hands of it
RIP

2010 Jan 24
Obi- I figured as much. I've worked in the restaurant industry and could read between the lines when I read the sign. Staff doesn't turn over quickly when you have good people to work for.

2010 Jan 25
RIP indeed. Do you know of a new culinary home Chef Obi, of which we might frequent?

2010 Jan 25
The place on Iving and Wellington closed, but has opened another location on Holland, near Tunney's. The second location was open before the first closed.

2010 Jan 25
LWB - you're referring to Istanbouli's?

2010 Jan 25
Istanbouli was not at Irving. It was way west of there at Carleton

2010 Jan 25
I stand corrected. Perhaps I need to get further out of Westboro and more often ;)

2010 Jan 27
Elgin Street Freehouse has a Notice of Distress on the door...