‘Tough decision’ to cut café as CEBA repay looms

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This article was published 06/12/2023 (682 days ago), so information in it may no longer be current.

Riva Billows spends her Saturdays reading and sipping warm drinks inside Riley Grae.

However, the days of her ordering coffees and marshmallow-filled hot chocolates at the Corydon Avenue shop are numbered — the store’s café is closing as a federal government loan repayment looms.

The store is tightening its operations. Many will likely follow as the deadline approaches for businesses to repay their Canada Emergency Business Account loan to qualify for a forgivable portion, according to business advocates.

Billows expressed sadness over the café’s impending closure.

“Coffee can be a very intimidating business,” she said. “That pretentiousness just never existed at Riley Grae.”

The eclectic store opened in the summer of 2019 and began its own coffee shop around a year ago, after its then-coffee shop partner left.

“We’ve always wanted to be more like a mini mall, kind of (a) community hub,” said co-owner Lauren Wittmann.

The shop sells gift items and involves other entrepreneurs, like a nail technician and a comic book dealer. The coffee bar takes up a back corner of the shop.

Riley Grae announced Monday it would close its café at the end of 2023.

“It was a tough decision that we did not want to make,” said Wittmann. “We’d been pushing it off a couple months.”

There were café regulars, but they didn’t cover the bills, Wittmann said — and a number of coffee shops dot Corydon Avenue.

New Thom Bargen and Starbucks locations opened nearby, adding to a grouping including Make Coffee + Stuff and Tim Hortons. The wide variety lessened the number of coffee drinkers in Riley Grae, Wittmann stated.

Focus on CEBA loan

Wittmann and their mother, also their business partner, are focused on the CEBA loan they took out.

Businesses could take a maximum loan of $60,000 during the pandemic. To have one-third forgiven, companies must pay Ottawa back by Jan. 18 (or March 28, if they refinance through a bank).

Companies have until the end of 2026 to repay the loan in full, but they’ll be charged interest.

“We’re feeling extra pressure because it’s $40,000 gone to that loan,” Wittmann said. “Whatever we have left, we can’t use it on keeping the café afloat because we have to use it on keeping Riley Grae afloat.”

McKenna Butz expects more small businesses to close fully or partially within the next year — if not for the loan, for a lack of sales amid higher operating costs.

“We’ve had a lot of feedback from different small businesses lately saying that this is the slowest that things have ever been for them,” said Butz, an employee at Valencia Boutique.

The shop recently put a call on social media outlining fears of downsizing and stressing the importance of shopping local.

People responded; the store has since seen more customers and is doing well, Butz said.

“It’s a weird economy right now,” she continued. “I think we’ll see… (people) make tough decisions about whether they’re going to keep their doors open, or how they’re going to adapt.”

“I think we’ll see… (people) make tough decisions about whether they’re going to keep their doors open, or how they’re going to adapt.”–McKenna Butz

Many businesses are taking out new loans to repay their CEBA loans in time to receive the forgivable portion, noted Loren Remillard, president of the Winnipeg Chamber of Commerce.

Some companies are increasing their prices, which detracts customers in a price sensitive world, Remillard said.

In Manitoba, 23,424 businesses were approved for a CEBA loan.

The initial goal of the loan was to ensure businesses survive a “very difficult economic period,” Remillard continued.

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“It seems short-sighted to now create the conditions to see the original goal not fully realized,” he said.

Businesses should and will pay back the public money, but a deadline extension is needed amid difficult economic conditions, Remillard added.

Premiers, downtown business improvement zones and business advocates across the country have called for a longer CEBA extension.

Riley Grae doesn’t yet have a plan for its café area, Wittmann said.

gabrielle.piche@winnipegfreepress.com

Gabrielle Piché
Reporter

Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle.

Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.