Victoria restaurateur Terry Vassiliadis never dreamed that his Eugene’s Greek Restaurant would be as successful as McDonald’s Corp. or Subway Restaurants.
His more modest goal was that, once he had lined up his first franchisee, Cory Brune, more franchisees would follow and eventually he and his brother’s franchising venture would be a thriving success.
But he said the B.C. government flushed those hopes down the drain when it implemented the harmonized sales tax (HST).
“I haven’t given up on the dream of franchising,” Vassiliadis said, “but who would want to get into the restaurant business in B.C. when there are no profits anymore?”
His only franchised location is slated to close and the two corporately owned restaurants that he and his brother own are losing money.
In April 2010, 3,321 people ate at Vassiliadis’ Shellbourne Street location in Victoria and each spent an average of $13.25 before tax.
This past April, 2,409 people ate at the restaurant and each spent an average of $12.54 before tax, he said.
“The HST had an overnight effect,” he said. “People are holding onto their money, and they’re not coming as frequently.”
Statistics Canada numbers, however, don’t support restaurant owner claims that food service spending is down.
The government data cruncher noted that although British Columbians spent less on restaurant meals in each of the first three months following the new tax’s implementation, spending increased in each of the next three months compared with the previous year.
According to Statistics Canada, restaurant spending in the last half of 2010 in B.C. was down about two one-hundredths of a per cent to $3.907 billion from about $3.908 billion in the last half of 2009.
British Columbia Restaurant and Food Service Association CEO Ian Tostenson was surprised when Business in Vancouver gave him these statistics.
“It’s hard for me to square these numbers that restaurant spending is virtually unchanged year-over-year,” Tostenson said.
“Most of the substantial players in the restaurant business are having a really rough time in terms of sales. Some are off 20%.”
Statistics Canada data shows that B.C. restaurant sales continued strong in early 2011, being up 1.8% in January compared with January 2010.
Sales were down 11.8% in February compared with February 2010 but those months are not comparable because the province hosted the 2010 Winter Olympic Games.