New Restaurants Canada president Todd Barclay discusses the industry’s road to recovery


Rosanna Caira: What’s the biggest
challenge for you as you take on this role in the new normal we’re living in?

Todd Barclay: There are many challenges we’re facing — we’re dealing with a pandemic that has completely rocked this industry — and we’re all continuing to learn every day as things shift and change. Joining an organization where you’re interacting like this is very different [from my past roles] and it was new for me to come into an organization where I met everybody virtually. But, this team is really incredible and it embraced this. We spend time together every day as a leadership team, grounding ourselves in the issues of the day and the week that we’re trying to focus on and accomplish. Another challenge is that, because things are shifting so dramatically, week to week, it’s sometimes hard to look further out and we sometimes get a little bit myopic in terms of how we’re focused. But thankfully, as a group, we come together and work through those issues and I feel as though we’re moving in a good direction. There’s lots to do — a lot has been done, but we continue to advocate and work on behalf of the industry every day.

RC: More than a year into the pandemic, what asks do you have for the government and are they different from those of six or seven months ago?

TB: The programs that were established did help, certainly more for some than for others. Probably the best example of that is the rent program, which I think [was well-intentioned], but unfortunately, because it was driven through the landlord versus for the tenant, a lot of restaurants across the country weren’t able to take advantage of that. So, in speaking of that program, as an example, we’ve been working very closely with the federal government to enhance and change it to ensure more restaurants can take advantage of it. We’re seeing progress there and are working with all provincial governments across the country in order to provide greater levels of subsidy grants to help restaurants to get through this very difficult time.

In terms of what we’re focused on today, there are a few things that are pretty critical. First and foremost, there is a light at the end of the tunnel. We can see that as lineups for vaccinations happen. However, there are still many bumps on a long road ahead. So, there are things that need to continue to happen in order for restaurants to survive through what will still be a pretty tough time. At a federal level, we’re working very closely with the federal government.

But, a few months ago we initiated a national press conference where we called upon the government to create a national Working Group. They’ve agreed to that — our first meetings [were] at the end of January, which is really exciting — and in those discussions, we’ll talk about the importance of the continuation and enhancement of programs. For many restaurants and businesses across the country, there is a requirement for there to be some certainty, some hope.

As you look at what’s happening, if you know there’s going to be this continuation of programs and assistance, it gives you the will, every day, to continue to move forward and potentially to, unfortunately, dig into your own savings to continue to survive. Secondly, we’re working with government at a federal level — and provincially — to look at the new ideas and initiatives that have come out of this pandemic, to see if we can have those persist. For example, extended patio hours, extended patio space [and] looking at opportunities for alcohol delivery. Beyond the pandemic, working on opportunities for growth and ways to expand our businesses are discussions we want to have with the government. The whole economic model of restaurants was strained — even prior to the pandemic — and most restaurants are typically realizing single-digit profitability. We’ve seen this pandemic drive some new initiatives, so we’re working on ensuring those will continue well beyond the pandemic.

The third thing we’re working with government on is [getting its] help in terms of a voice. We need local, provincial and federal politicians to be reminded that our industry is the fourth-largest in the country; it employs more than a million people at the best of times; and it provides a significant chunk of the overall economy — 95 cents of every dollar that comes into a restaurant is re-invested back into the community and, typically, only five cents stays within the pockets of the people who own these organizations. So, we need the government to help us with that through consumer campaigns that speak to the safety of restaurants and the importance of supporting local community restaurants. It’s a three-pronged approach to ensure [existing]programs persist well past the spring and ensure other programs that have been developed will sustain themselves well past a pandemic.

RC: What more can be done, structurally, to help government understand the importance of this industry? Why don’t they seem to get that message?

TB: I’ve reflected on that — both as an individual within the industry and also as a consumer — and spent a lot of time meeting with politicians across the country over the last four months. If we reflect on that question, I don’t know if it’s that politicians don’t understand or that politicians will often react to what their base is looking for them to support or focus on. And, ultimately, politicians want to get re-elected. So, we as an organization, have done a good job in terms of advocating on behalf of the industry to the government, but I believe we can do a better job going forward. You’re [already] seeing it in some ways in how we’re now taking the message out and educating the public. We have, as an association, focused most of our spending and resources on relationships at a government level. On a go-forward basis, there’s more to be done from a public-relations perspective, as well. And if we can have communities [and] individuals better understand the [positive impact] of our industry on the economy, on our local communities, that will create a greater groundswell in terms of a better understanding and, potentially, more support going forward, from a government perspective.

There are other ways we can we can push for advocacy; different initiatives currently in place across the country with different levels of government. As we have broader discussions with the federal and provincial governments, I envision a day where there’s a minister of Foodservice and Restaurants, as we do a better job of continuing to educate not just government, but society as a whole of the importance of this industry.

RC: What is the association’s stance on restaurants being able to take advantage of wholesale liquor prices and offer alcohol delivery to customers?

TB: It’s a significant opportunity for us and one we needed to push on. Many provinces have already agreed to this. [For example,] B.C. recently announced discounts for restaurants, in terms of the acquisition of liquor, spirits and beer, and the Atlantic provinces have already been very progressive with this type of programming. I find it quite perplexing that restaurants actually pay more for liquor than consumers do, so trying to compete in selling liquor in on-premises establishments, as well as off-premise, proves difficult if you’re actually paying, in some cases, more than a typical consumer would be. So, there’s a significant push from our association — and from various individuals within the industry — to move forward with this. And, I would suggest that there’s an appetite in Ontario to look at more progressive programs moving forward. This pandemic has been catastrophic for industry, but it’s helped move forward some of the long-standing issues we’ve had as an industry, so my hope is that this is another example where we’ll see some great progress in the provinces where that doesn’t already exist.

RC: Another issue that’s surfaced a lot through the pandemic is third-party-delivery systems as another area where high-cost commission rates have really hurt the operator. What’s your view on these fees and should there be more government involvement in capping those rates?

TB: In a typical environment, I’m always a proponent of the market dictating what should happen. But, during the pandemic, when restaurants across the country had been forced to shift their business model to an off-premise model, having a program in place where the aggregators have been able to charge significant percentages on top of existing menu prices has created an issue for a lot of restaurants across the country. I have a background in this, because my time working for Cara involved negotiating these contracts. What I would say is that, in a typical time, for restaurants that do not have a well-established off-premise business, this type of programming — this type of technology and access to people’s homes outside of your four walls — represented a pretty significant opportunity. I wasn’t surprised that many independents and chains took advantage of this. The problem, to your point, is, as the pandemic happens and you’re forced to shift 95 per cent of your business, the model doesn’t work. I’m happy the government has stepped in and put some restrictions and caps in place. I’ve had discussions with different [third-party-delivery] organizations and many did step up right away and offer levels of support and help — especially for restaurants without an established delivery business. They knew the pressures that would be put on these restaurants. Let’s also remember, ultimately their business is driven off of our business, so they want us to survive — they have a vested interest in us being able to survive through this time and, ultimately, [having] our business going forward.

During the pandemic, it makes sense for there to be opportunities for government to help and bring in regulation. Post that, there’s a good debate to be had for some of those restrictions staying in place for an extended period of time. But, ultimately, I do think that the market should bear this out.

RC: We talked earlier about how important this industry is, in terms of the number of people it employs. How has this pandemic affected those numbers?

TB: It’s been devastating —catastrophic — for this industry, in terms of the number of people who’ve been either laid off, furloughed or lost their jobs, as well as the number of restaurants across the country that closed. During the height of the pandemic, 800,000 people were no longer working. Thankfully, through the summer, there was a resurgence, however, as we got out of the summer and into the fall, there were still close to 260,000 people still not working within the industry. That number has only grown as restrictions have been put back in place, so I expect that [number has grown] into the 300,000s. At this stage, many people across the country have been impacted by this pandemic, as it relates to job loss, and our industry has experienced the greatest level of job loss of any industry across the country — and I expect that will continue. [In regard to] the number of restaurants that have closed, it’s hard to say exactly, because there’s not great data. But we do have access to various organizations within the industry that can provide us with information, as well as our own data through surveys, which shows at least 10,000 restaurants have closed. And that number [grew] through December and into January. The difference this year is that, as we all know, the greatest opportunity to make money in this industry is typically through the holiday season. And, unfortunately, so many restaurants across the country were forced to close and the coffers are dry and bank accounts have been drawn upon. So, it’s going to be a really tough period of time. This circles back to the beginning of our discussion and the importance of government providing sustained relief and hope to both the individuals that own the restaurants, as well as letting people who are employed in the restaurant industry know to not lose hope, jump ship and move somewhere else. There is absolutely a future — we just need to work together and with government to make sure we can sustain ourselves for the next few months.

RC: Are you at all concerned that, with all of these layoffs and people leaving the industry, perhaps they’re lost to the industry for good?

TB: I am worried about that. There are [certainly] people across the country today looking at their past experiences and the roles they had within the industry and wondering what the future holds — and that is a concern. I’m also sure that, as restaurants ramp back up, there will be issues related to finding people to come back because of some of the government programs in place today, [such as] the new employment-insurance programs as a continuation of CERB, might be [influencing people’s] decisions, as well as the fact that more kids are at home because schools are closed. Unfortunately, people are going to have to make different decisions as a relates to their careers moving forward. However, I know our industry is a resilient one. It’s a fun industry, it’s a great place to work, it’s a great place to meet people, it’s energetic — it’s the hospitality industry. It probably will take time, but I’m encouraged by the fact I know that people will come back. There will be some issues to deal with in the short term, as it relates to labour, for sure.

RC: One of the things I also hear when I’m talking to operators is a huge level of frustration as to why restaurants can’t offer on-site dining, as opposed to just takeout when safety protocols are so high. How do you respond to that?

TB: I share their frustration — there is very little data [to show] restaurants were the problem. And, [in the data], restaurants were included with nightclubs and other late-night establishments where, the levels of safety and health precautions maybe weren’t at the same level. It’s been a big part of what we’ve been doing in terms of advocacy — asking for that data. In Ontario, for example, when the data was finally shared, it created the groundswell to get restaurants back open in regions where they have been closed. I’m a huge advocate of governments and very thankful for provinces that have used data as a guide to keep restaurants open. B.C. is a wonderful example of that — the Medical Officer of Health, even talked about the fact restaurants are probably safer than your homes because of all the dollars that have been spent on precautions. And, in fact, let’s also remember that this is probably one of the most regulated industries in the country. Operators and CEOs of restaurant companies know how to keep people safe — it’s a big part of our job — so I share that level of frustration.

I believe that, if we’re truly all in this together, we should all be in this together — a real lockdown should be true lockdown, so we get through this as quickly as possible. And, I also believe and am advocating for, when re-openings happen, we should not be the last on the list. We have proven we’re more than capable of [offering] a healthy and safe way to re-start the economy and we know so many jobs can be re-gained very quickly if we’re allowed to re-open. We’re also spending a lot of time with governments, talking about how much of a shame it would be, at this stage — when so much has already been invested and we can see the light at the end of the tunnel — to not continue to invest in these great restaurants so we can turn the lights back on. Let’s not lose sight of the fact we need to continue to support restaurants going forward and we can be a big part — and a safe part — of the re-opening of the economy as quickly as possible.

RC: When we look at safety protocols and everything restaurants have done to keep their consumers and their guests safe, do you foresee a lot of these protocols sticking around in the long term?

TB: There’s a segment of society that probably will rush back very quickly and not worry about the different safety protocols and requirements — certainly not from a restaurant perspective, but in terms of society. I expect that the re-opening will involve some level of restriction for a period of time, including contact tracing going forward, which, by the way, we were the only industry to do right. And, in fact, in some ways, it probably hurt us, because we were the only ones who were providing data back to the government, in terms of what we’re seeing. So, I expect many of the safety protocols that are currently in place will stay for a period of time, but, like all things, will eventually shift to a new norm. And, I know restaurants will be more than willing to follow those guidelines, as long as it takes — just let us re-open and prove that we can be a safe and effective part of the re-opening of economy.

RC: What industry trends or changes do you see emerging in the next one to three years as a result of this pandemic?

TB: Technology is going to play a major role going forward, whether that’s related to off-premise-dining opportunities and how people order food, secure codes for menus, frictionless payments, et cetera — a lot of those things are going to continue going forward. The other thing we have to reflect on is that there will probably be consolidation in the industry. As various organizations have been forced, through this pandemic, to make significant cuts or close locations, there’ll be opportunities for growth through consolidation. And, we should also remember that, unfortunately, many restaurants will be coming out of this pandemic with a significant amount of debt because, as we mentioned, the model was very strained. So, restaurants are going to have to adapt and pivot in order to deal with that. The importance of local will be talked about; the importance of safety will be talked about, for sure; and restaurants will continue to do a very good job of managing their cash flow through how they manage their supply chain. We’ve seen, over the last eight or nine months, [operators] have restricted their menus and that will probably sustain for a period of time as they continue to manage for these changes. New habits have been formed — many people across the country had never used their phone to order food before. Finally, restaurants today need to be thinking about the experiences they can provide when people come back into the restaurant and make sure that they’re ready to create great experience. People will come back to restaurants and I firmly believe we have to make sure that, as an industry, we’re ready for them to come back. And, remember, that first experience is the one that reminds them of how much they missed those experiences, so that they come back over and
over again.

RC: Since you joined the association in August, what are some of your biggest lessons learned and most important takeaways for you, personally?

TB: Lots of learnings for sure. It’s been a year none of us will ever forget and, hopefully, one we won’t have to endure for much longer. I knew coming in that there were many challenges. This industry is facing a significant issue currently and there will be issues and challenges for us to deal with going forward. But, I was excited to be able to step in and bring my expertise to help this industry to survive and revive itself and prosper going forward. In terms of learnings, as I reflect on the year, one thing is the importance of close relationships, community and family. I’m sure, for many of us, no matter what we’ve endured through this year, our family and the community that we surround ourselves with has really been what has helped us to get through it. And, I think that’s true in your own personal life and from a business perspective. I’ve heard, so many times, from different owners and operators across the country that they have been really inspired by the community that’s been supporting them. That’s something many have invested in, especially over the last nine months, and will continue to invest in going forward. Because, ultimately, those relationships are the ones that will sustain us.

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