‘No bright outlook for the future’

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This article was published 27/11/2024 (322 days ago), so information in it may no longer be current.

Four years ago, Nick Graumann spent thousands of dollars creating a coffee hub within his downtown Winnipeg restaurant.

On Friday, he’s permanently shuttering Nick’s on Broadway. He’s the latest in a slew of local restaurateurs to call it quits.

“I wouldn’t mind doing this forever if I got a real paycheque,” Graumann said Tuesday. “There’s no bright outlook for the future.”

More than half of Manitoba eateries — 53 per cent — are currently losing money or breaking even, Restaurants Canada data found. Before the COVID-19 pandemic, 19 per cent of the province’s industry wasn’t making money.

Graumann, 36, said he’s pivoting to a career in construction. It’s a far different life than he’d envisioned in early 2020.

Then, Nick’s on Broadway was debt-free. Graumann said he bought an espresso machine and spent some $20,000 renovating cabinets, countertops, lighting and more for a coffee bar.

He hasn’t made the money back, he added.

Graumann recalled struggling during the pandemic. He cancelled deals with third-party delivery apps because of the cost; few sales came from the apps anyways, he said.

In the years since, foot traffic hasn’t returned, Graumann explained. He estimates customer levels to be 30 per cent of what they were pre-pandemic.

Nick’s (287 Broadway) opened in 2015.

Even the “budget bites” menu he created last year — $3 quesadillas, $4 wraps — hasn’t attracted customers like he’d hoped.

“It’s really convenient to go to McDonald’s or Subway,” Graumann said. “If people don’t frequent small businesses, then … all there’ll be (are restaurant chains).”

Fewer people downtown and the recent bout of inflation have made business unsustainable, he said. Graumann chose not to renew his lease.

“(There’s) a significant … strain on the industry to try to make any sort of money,” said Shaun Jeffrey, executive director of the Manitoba Restaurant & Foodservices Association.

The average Manitoba eatery has experienced a 25 per cent operating cost increase since the COVID-19 pandemic. Meanwhile, consumers are spending roughly three per cent less, Jeffrey said.

The combination makes it “very tough” to own a restaurant, he added.

Lately, the restaurant association has been encouraging its members to diversify their revenue streams. Offering catering, take-and-bake options and takeout are among the measures emphasized to stay afloat.

It’s the first time such messaging has been heard in the association’s 80-year history, Jeffrey said.

“Our pathway to the future (involves) changing and adapting to new trends and new dining habits.”

Plenty of restaurants are profitable. Often, they’ve tweaked operations to meet customer demand, like restructuring opening hours and drawing revenue from different places, Jeffrey added.

Restaurateurs are increasingly asking the association for data about the industry’s ebbs and flows when making business decisions; such statistics have become “a necessity,” he said.

Some downtown diners, including office tower haunts like Bailey’s and Hy’s, are excelling, Jeffrey noted. Still, downtown restaurants are struggling more than average.

“It’s still the perceived (public) danger … and parking,” said chef Wayne Martin, co-owner of Capital Grill & Bar on Broadway. “We don’t get much traffic down here.”

He sold Capital Grill’s Roblin Boulevard location last month. Those customers are visiting Broadway “reluctantly,” he said.

Martin called the lunchtime crowd steady — the restaurant is near a range of office towers — but he deemed nighttime slow.

However, neither parking nor crime is as bad as people think, Martin said.

Meantime, there has been increased year-over-year spending on downtown entertainment, including hospitality, said Kate Fenske, CEO of Downtown Winnipeg Business Improvement Zone.

Events led to a near 30 per cent jump in visitation this fall compared to last and the core’s weekly average visitation jumped 29.5 per cent year-over-year, according to BIZ numbers. Ottawa mandated federal government workers back to the office at least three days per week, contributing to more foot traffic.

“There’s a lot of optimism right now for downtown but we’re not out of the woods yet,” Fenske said.

It’s a mixed bag of businesses thriving and struggling, she noted, adding ground floor retail is generally challenged.

The Downtown Winnipeg BIZ tracked a net loss of one business in 2024’s third quarter; it follows two quarters of net increases.

In-development residential projects, like Market Lands, will likely produce new business customers, Fenske said.

“There (still) seems to be a lot fewer people walking down Broadway than in the past,” noted Chris Brogden, a long-time resident and worker in the area.

Across the city, restaurants including Fionn MacCool’s on Regent Avenue and Empress Street’s Preservation Hall have recently shuttered, citing high operating costs and pandemic-era debt.

gabrielle.piche@winnipegfreepress.com