Annual receipts reach a record of more than $6 billion in 2004
Peter Wilson, Vancouver Sun
Sun
Bob Lindsay owns Lift Bar and Grill, Monk McQueens in Vancouver and Monk’s Grill in Whistler. Photograph by : Glenn Baglo, Vancouver Sun
When it comes to eating out, British Columbia families lead the way — spending, on average, $1,727 each year in restaurants or 24.2 per cent of their annual food budget.
And that puts us ahead of everyone else in the country in downing food and drink outside our homes.
So it’s no wonder that BC Stats reported recently that, as we ready ourselves for the 2010 Winter Olympics, the restaurant industry is looking good.
In 2004 BC’s restaurant, caterer and tavern receipts reached an annual record of more than $6 billion, an 18.2 per cent jump from 2000, and much better than the 12.6 per cent national average hike.
And the outlook appears to be good across the board from fast food to fine dining.
However, operating a restaurant is no sure way to riches, or even a bare living and it’s fraught with danger, with even long time successful operators offering cautions to those who want to make it big by tickling the public’s palate.,
When restaurant legend John Bishop of Bishop’s is asked about going it alone in the business he’s a man of few words.
“I say ‘don’t do it.'” Bishop said. “Say I’ve got a young staffer and we’ve had a pretty busy night I say ‘don’t do it.'”
Not that they pay attention.
Said Bishop: “I can’t tell you how many people have come through my place, that have gone on to open a restaurant and be successful and I’ve probably said ‘don’t do it’ to all of them.”
Even, so people still open restaurants and this has made Vancouver, at least, one of the cheapest major culinary cities in which to eat, said Geoffrey Howes of Toseki Entertainment which operates Aqua Riva and The Salmon House on the Hill.
“People ask how come we have the best prices and the best value in North America?” Howes said. “If you go to Toronto, San Francisco, New York or anywhere else the prices way more than here.
“And the overall quality now is dramatically better in some cases than those cities. The reason for that is pure and simple, competition.”
Howes said that the good side of competition is that the consumer gets the best possible and it forces innovation because people are constantly looking for a new niche to be better than somewhere else.
“I don’t believe we would see that kind of innovation in this city if it wasn’t for the fact that the business is so competitive that you’re constantly trying to reinvent the wheel to do a better job so people will come to your restaurant,” said Howes.
He contrasted the situation
in Vancouver with that in San Francisco, where there are restrictions on the number of restaurant licences issued.
All you have to open a restaurant here is to get a liquor licence and get the appropriate health permits, said Howes.
Vancouver restaurateur Bob Lindsay, who operates Lift, Monk McQueens and Monk’s Grill in Whistler said that most restaurants fail because of cash flow problems and a lot of that is because of the seasonal nature of tourism.
“May through September we’re all hugely busy and then October through April we’re all going after the same limited market,” said Lindsay. “I don’t know how many restaurants there are in Vancouver now, but it’s got to be over 2,000.”
When restaurants get into trouble, said Lindsay, is in the low volume months.
“It’s not that they’re necessarily losing money on an annual basis, but they just don’t have the cash flow to keep up with what they need to put out to their suppliers.”
The smallest restaurants are usually what are known as ma and pa operations.
“And that’s where you work seven days a week as the proprietor,” said Lindsay. “You’re the waiter or the dishwasher or the cook and you might make $60,000 a year. I call that subsistence restauraturing.
By contrast, Lindsay’s restaurants take in a combined income of $15 million a year.
“We work on volume and trying to keep our bottom line as healthy as we can,” Lindsay said. “There are just a million things that can erode your bottom line in the restaurant industry, the biggest one being labour.”
It’s not just the ma and pa operations that face major problems. Recently a restaurant with a terrific reputation, which won several awards, Bis Moreno on Hornby Street went out of business after eight months of seeming huge success.
And Bud Kanke, who now operates Joe Fortes and started up 10 restaurants in Vancouver including The Cannery and The Fish House in Stanley Park, remembers hitting hard times in the early ’80s.
“In 1980 my net worth was so far minus below zero I had to build it all back up again,” said Kanke. “It just went. It was gone. I always say I do it one salmon steak at a time.”
Howes said there is a statistic often bandied about that 80 per cent of restaurants go bankrupt or don’t make any money over their first two years, but that this is unprovable.
“You can’t measure that easily by the bankruptcies because what traditionally happens is that a restaurant will open, they’ll be underfunded financially, they won’t have enough cash flow and they won’t get the sales that they’ve quite predicted. Or their expenses could be way too high because they don’t understand the business.”
Then what traditionally happens, said Howes, is that they hang in, just surviving and then, perhaps, the restaurant gets sold to someone else.
With that said, however, there is always the chance that the restaurant will make it big and cash in on all the hard work and hours of intense dedication.
Just ask John Bishop who opened his namesake restaurant on Dec. 12, 1985.
“I thought that maybe, if I thought about it at all, that we might get five years out of it,” said Bishop.
PROFILE OF THE BRITISH COLUMBIA RESTAURANT INDUSTRY:
– Annual revenues: More than $6 billion a year.
– Number of restaurants: More than 9,500.
– Employees in restaurants and drinking places: Close to 118,000.
– Percentage of the workforce: 8.7.
– Salaries wages and benefits: More than $1.7 billion.
– Average annual amount British Columbia households spend in restaurants per year, as of 2005: $1,727 (significantly higher than the national average of $1,519 and a whopping 37.2 per cent boost from 2000).
– Percentage of total household expenditure on food spent in restaurants: 24.2 per cent, the highest in Canada.
— Based on the most recent figures available from Statistics Canada and BC Stats.
© The Vancouver Sun 2006