VANCOUVER — A&W restaurant sales have fallen sharply since the COVID-19 pandemic started to grow in Canada in mid-March, according to the A&W Revenue Royalties Income Fund.
"The effects of COVID-19 on many businesses and I'd say particularly restaurants have been unexpected. They're sudden and unprecedented," said Susan Senecal, CEO of A&W Food Services.
Industry data shows food service sales in Canada since the pandemic began have fallen by over 60 per cent, she said.
About 200 of the company's restaurants out of a total 995 are temporarily closed. Many of those are in shopping centre food courts or street front locations.
The company closed its dining rooms at restaurants that remain open and those locations are restricted to drive thru, delivery and mobile ordering sales.
"Customer traffic in the remaining restaurants is down significantly, as guests remain at home and practice social distancing," Senecal said.
Starting March 13, total sales of the burger chain's restaurants in the royalty pool are about 42 per cent of sales before that date, including the impact of closed restaurants.
Same-store sales in the first quarter, which ended March 22, fell 4.0 per cent.
Growth in January and February was positive, noted Senecal.
"However, starting March 13, 2020, COVID-19 began to have an immediate effect on A&W restaurant sales."
The negative same-store sales growth was offset by gross sales from new restaurants, said Donald Leslie, chief financial officer.
The comments came as A&W reported its profit for the first quarter totalled $5.5 million compared with nearly $5.7 million in the same period a year earlier. Net income, excluding non-cash items, totalled $7.7 million, up from $6.3 million a year ago.
Gross sales at A&W restaurants in the royalty pool totalled $308.7 million compared with $308.8 million in same quarter last year, as the number of restaurants grew to 971 compared with 934 a year ago.
A&W announced earlier this month that it would temporarily suspend its monthly distributions to unitholders in an effort to preserve cash during the pandemic.
The company believes the quick-service restaurant segment of the food service industry will recover from the impact of the coronavirus, said Senecal.
"However, the timing and the strength of the recovery cannot now be predicted with any degree of certainty."
This report by The Canadian Press was first published April 29, 2020.
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