Halifax Smitty’s restaurant abruptly closes doors, cites pandemic pressures

Restaurants Canada explains why some restaurants can’t stay open and how customer habits have changed since the pandemic.

A popular Smitty’s location in the Clayton Park area of Halifax abruptly closed its doors Tuesday.

A notice posted to the door of the restaurant says the decision was due to the financial impacts of COVID-19 and the post-pandemic period.

“Collectively those challenges are very real and have taken their toll on us personally and financially, we can no longer continue to operate profitably in this location,” it reads.

The notice goes on to say a replacement tenant was sought, but without success, and the landlord terminated the lease effective Wednesday.

The location was in business for more than 24 years.

Last year, 7,000 Canadian restaurants went out of business, according to a new study from Dalhousie University.

The university is now projecting that another 4,000 restaurants will go out of business in 2026.

Restaurants Canada says 41 per cent of restaurants are operating at a loss or barely breaking even. That number was 12 per cent in 2019.

‘A perfect storm’

Janick Cormier, vice president of the organization’s Atlantic Canada division, says the industry never recovered from the pandemic.

“At a time where the costs to operate a restaurant are increasing significantly, Canadians are struggling to make ends meet on their end, and they’re coming out to eat less often and when they do go to restaurants they’re spending less,” she says.

“It’s creating a perfect storm of circumstances where unfortunately some restaurants are having to make the hard decision to close.”

Cormier says some of the biggest costs restaurants currently face are food, labour costs, insurance, utilities and rent.

“Costs have gone up double digits in the past two years, but the restaurants aren’t able to pass on that increase in costs to consumers because they’re more and more price-aware and they’re looking for the best deals,” she says.

When consumers do go out they don’t spend as much as they used to, or splurge.

“They’re skipping the glass of wine, they’re skipping dessert, they’re looking for the least expensive item on the menu, for example, and so it’s creating a situation where restaurants just aren’t able to keep up with the operating costs,” says Cormier.

This causes restaurants to evaluate their menus and get rid of expensive dishes or swap expensive ingredients for less expensive options to keep prices down.

Supporting local

Cormier says people should get out and support local, if they’re able to.

“That means maybe you’re getting takeout once a week, maybe you’re going out and celebrating special occasions and it’s really about supporting your local establishments,” she says.

“It’s kind of like when we were back in pandemic times and people said, ‘support local, support your restaurants, go get the takeout,’ it’s the same message today. We really need customers to come through their doors and spend their money in our establishments because we’re simply not getting enough foot traffic.”

With files from CTV Atlantic’s Crystal Garrett and Bruce Frisko.

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