When Wayne Empey and his wife Thanh Pham purchased a tired cafe on the corner of Broughton and Blanshard streets, they knew they were wading into a volatile industry.
Four years later, Caffe Teatro has come out ahead of the economic downtown by providing Vietnamese cuisine to the suit-and-tie crowd, but Empey’s upbeat persona fades momentarily as he discusses staying afloat in Victoria’s saturated food service industry.
“We only manage to survive because my wife and I run the place,” he said. “The naiveté of people to open up restaurants today, I don’t know who’s opening up these new places. Where do they get the money?”
There are 534 active food service licences in the City of Victoria, including 26 new licences for 2013. Those numbers don’t include food trucks or grandfathered food cart licences.
Despite dwindling tourism, the ill-fated harmonized sales tax, a chill on alcohol sales from stricter drinking-driving laws and a 24 per cent bump in payroll due to minimum wage increases, Victoria’s restaurant scene continues to thrive.
“People are still satisfying that urge to go out and be social, but they’re just doing it in smaller, tangible ways,” said Bob Parotta, Victoria chair of the B.C. Restaurant and Foodservice Association.
Restaurants that have closed in recent months, like Rick’s Grill and Sauce, represent a North American-wide trend of larger establishments losing out to “fast-casual” food, Parotta said.
“There’s just a surge in the breakfast and casual places right now due to economic times.”
B.C. restaurants lost an estimated $1.5 billion in food sales during the reign of the HST, according to the Canadian Food Restaurant and Foodservices Association.
In April, the first month after the HST was abolished, food sales shot up between six to nine per cent across the Capital Region, Parotta said.
“It was a tough few years, because the government didn’t give us the time to adjust to any of those changes,” he said. “But we’ve all learned to work with it now, we have taster programs for wines, we can plan drink menus so by the end of a meal, the customer is still under .05 (blood alcohol level). We just need to be consulted beforehand.”
The uphill climb for mom-and-pop food establishments like Caffe Teatro was the norm even prior to the recession, said Frank Bourree, principal of Chemistry Consulting Group and expert in food service trends.
“It’s super competitive here, we’ve got more and more chains in the market,” Bourree said. “What has changed is fast food is a much bigger piece of the market today than 20 years ago.”
Empey suggests the city could restrict restaurant density downtown to support existing restaurants and avoid over-servicing a finite business population.
It’s great to have options, but it’s too dense,” he said. “There should be a moratorium on restaurant zoning on certain city blocks.”
Coun. Shellie Gudgeon flatly rejected the idea, but said the City’s next big food service policy will likely be zoning restrictions for food trucks.
“We are saturated (with restaurants), there’s no doubt. But as an industry, we need to step it up on all levels, said Gudgeon, who also owns Il Terrazzo Ristorante. “The tough economic times have shown us that we can’t just open the doors and wheel people in, we have to have a quality product. Five, 10 years ago it was far too easy.”
Parotta points to food festivals like Taste and Victoria’s inaugural Spot Prawn Festival earlier this year as indicators of a healthy appetite for more food-centric events in the Capital Region.
“Everybody’s talking about a definite mark of improvement this summer,” he said. “I think this is going to be a good year.”