Donna Dooher has lived most of her life in foodservice, like so many others in the industry. She started as a server, a stepping stone that led to a successful career spanning more than 30 years as a chef, caterer, TV personality, cookbook author, and soon to step down as president and CEO of Restaurants Canada. She really has seen it all in the foodservice business.
By Donna Dooher
The challenge for operators is that they work seven days a week and are nose to the grindstone, so they just don’t have the time to pop their heads up to look around; they’re always in the thick of it.
The two biggest issues in the business continue to be rising food costs and labour. Almost 50 to 70 per cent of your money coming in is dedicated to handling these issues. I don’t see this changing drastically (in 2016) unless there is movement on some of the issues impacting those two items, such as the cost of payroll expenses, rents, credit card fees, real estate costs, and property tax.
The big issues force operators to take a closer look at their business practices. It doesn’t matter what type of operator you are, whether a multi-million dollar operation or 60-seat operation. You must look after those operational pieces. This is where some operators may fall short. That is where we at Restaurants Canada come in: we’re here to support you and help look for ways to take the pressure off.
Changes to the supply management system here in Canada would take some of that pressure off. Something’s gotta give. I think the Trans-Pacific Partnership (TPP) is putting a lot of pressure on the system, bringing to light how the need for change is there. We currently have an antiquated system that needs to be modernized and updated, and the stakeholders all need to get together.
My advice for independents in 2016?
Look to efficiencies; they will always save you a little bit. You need to have good accounting practices from the start. Sadly, quite often they’re the last thing put in place.
I understand operators. You’re so passionate, you just jump into it, making wonderful food, and you wake up one day and your accountant or landlord says, ‘hey, you owe me some money.’ Or your accountant says, ‘you’ve been working 60-hour weeks, and you’re not making any money.’ It is a reality check.
Especially the young emerging entrepreneurs who are coming through our industry – they are going to shake up the whole business model. We need to have the discussion with them: how about you set this up before you jump up to the stove?
For example, some entrepreneurs don’t consider that many of their customers are going to pay with debit or credit cards and how the processing fees (anywhere from 1.5 to 3.5%) will impact their bottom line. The fees not only apply to the cost of goods but also the applicable taxes. In the hospitality industry there’s an added sting – the gratuity. This could be as high as 35% of the overall bill.
There’s no question: the failure rate is high in our industry. Like any industry there is always room to grow and improve along the way. There are great operators who have been running independent restaurants for 20, 30, 40 years – they do pay attention to these factors, forecasts, menu mix. They watch the consumer trends, cost of sales and listen to their customers’ needs and for some their brands become mulitnational chains.
I’m incredibly optimistic about the industry – this is an amazing industry: it’s an innovative industry, it’s a young people’s industry, it’s a first time job for so many. Over 18 million Canadians every day are touched by Canadian hospitality. Just imagine if for one day every foodservice operation in the country were closed. What would Canadians do? We are needed and appreciated.