Canada’s fast food chains are being hard hit by the coronavirus lockdown.
The two companies behind the A&W hamburger restaurant chain issued a statement saying that their sales have plunged by 50% since March 13. This is the result of the closure of 220 restaurants throughout Canada. The companies behind A&W forecast that the restaurant sector as a whole in Canada has experienced a 60% drop in sales over the past month.
A&W Food Services of Canada, a privately held company that owns or franchises the country’s 925 A&W outlets, and A&W Revenue Royalties Income Fund (TSX:AW.UN), a publicly traded organization, did not offer an estimate on when the fast-food sector will recover from the current losses. They did suggest that it could take up to two years for normal sales levels to resume.
Unitholders will be impacted. Their distributions have already been suspended, and there may lie ahead a lengthy period of time before distributions resume and recover their pre-crisis levels.
The A&W operating company has delayed one quarterly royalty payment to the fund and may do so again. Those payments could be delayed until late December of 2021, the companies said in a written statement.
