How inflation is hurting Manitoba restaurant owners

Winnipeg Works: Food costs impacting MB restaurant CTV’s Michael D’Alimonte learns about how rising inflation is having an impact on the province’s restaurant.

Opening a restaurant during a pandemic was difficult for Lourdes Federis, owner and operator of FoodTrip Kitchen, a Filipino restaurant in the Polo Park area.

Federis thought dealing with COVID-19 restrictions - forcing the fledgling business to operate without a dine-in option - would be the largest hurdle her restaurant could ever face.

Fortunately, Federis persevered through the pandemic. Unfortunately, now she’s facing an even bigger problem: rising inflation.

“I know it will pass,” said Federis, “I know we’ll catch up. But, right now, I don’t see that.”

“I’m scared that we’ll not even get to that ‘when’,” she said.

Food prices in Canada continue to rise, even as the overall inflation rate fell in November.

According to Statistics Canada, the national inflation rate slowed down to 6.8 per cent in November, whereas prices for food rose 11.4 per cent annually, continuing an upward trend compared to October.

Edible fats and oils are 26 per cent pricier compared to last year, with eggs jumping up by 16.7 per cent and vegetables now 11 per cent more expensive, according to Statistics Canada.

For Federis, that means it’s becoming more and more costly to produce her business’s main product, her restaurant’s food.

“We can’t really just pass that on to our consumer, right?” said Federis, who noted certain food items have increased by upwards of one hundred per cent.

Federis hopes the provincial or federal government will step in to support small businesses through current economic conditions, which she says are even worse than the pandemic.

“Something has to be done. Otherwise, you’ll just see restaurant or small business closed one by one,” said Federis.

FoodTrip Kitchen isn’t the only restaurant grappling with higher costs for ingredients.

Shaun Jeffrey with the Manitoba Restaurant and Food Services Association says inflation is increasingly squeezing restaurant operators already dealing with razor thin margins.

“Although you’re busy (now) you’re not very profitable because your food costs are seeing such significant increases,” said Jeffrey.

Restaurants are finding ways to save money or offset costs, says Jeffrey, adding some restaurants are opening on Christmas Day this year, which he describes as unprecedented for the industry.

Jeffrey says he’s hoping the province will make investments in the food service industry to ensure long-term viability.

“It’s going to be many years before our industry recovers from the pandemic,” he said.

The Winnipeg Chamber of Commerce is proposing another way for the province to help restaurants and food service establishments.

Under current rules, hospitality establishments pay retail price for alcohol.

Letting them buy alcohol at wholesale prices, Loren Remillard, CEO of the Chamber says, would be a win-win scenario.

“It allows the sector to benefit (and it) allows them to pass on savings to the consumer,” said Remillard, “And the province wins as well by increased volume of sales and increased revenue.”

The province can also help small businesses by offering PST rebates, among other taxation-related measures, Remillard said.

Manitoba Liquor and Lotteries is aware of the proposal regarding alcohol sales to local businesses and is currently reviewing their policies.

“We are in the early stages of this assessment, and we have identified liquor pricing for commercial customers as a key consideration for the project moving forward,” reads a statement from a Manitoba Liquor & Lotteries spokesperson.