Several new forecasts by industry groups painted a gloomy picture for the recovery of the Canadian restaurant landscape this week. Social distancing measures, while essential to combat the spread of the COVID-19 pandemic, have added challenges to the daily routines of many operators with the initial shift to delivery or curbside takeout followed by stringent requirements for sanitizing and limits on the number of patrons allowed inside. With extra precautionary measures, restaurateurs, like many others in the hospitality and retail industry, had to pivot quickly and pay for unexpected expenses to adapt to a new reality. In addition, staffing needs changed with layoffs and recalls to work, not to mention additional training for masks and sanitation protocols adding more costs to a bottom line impacted by a prolonged shutdown.
With all these factors in play, some experts are saying that there will be long-standing impact on the foodservice industry. A joint study by Statistics Canada and The Canadian Chamber of Commerce, released in late August, predicted the possibility of 60 per cent of Canadian restaurants failing within three months — a number based on a recent survey where 31 per cent of foodservice respondents said that they would only be able to remain in business for that time due to the existing social distancing measures in effect.
According to the survey, the COVID-19 shutdown in Canada temporarily closed 83 per cent of businesses in the accommodation and foodservice industries, with 2/3 of respondents laying off some staff.
Industry association Restaurants Canada is forecasting billions of dollars in sales lost this year in foodservice, one of the largest sources of employment in the country. The association reports that sales in 2019 for foodservice totaled $93 billion — a number that was predicted to surpass $100 billion next year. However, Restaurants Canada now predicts that the industry will lose between $21.7 billion and $44.8 billion in annual sales this year.
Campaigns such as Our Restaurants, Canada Takeout, Save Hospitality and One Table have launched across the country to assist beleaguered restaurateurs in navigating the challenges to come, as well as calling for government and consumer support. Whether or not these initiatives are successful will ultimately depend on the comfort level of the dining public, as well as the new realities of a distanced workforce. According to a survey from The Agri-Food Analytics Lab at Dalhousie University and Caddle, 36.8 per cent of respondents reported going to a restaurant for a meal/break at least twice a week, but only 23.3 per cent plan to do the same post-pandemic — a significant loss, especially for restaurants relying on lunch business. In addition, as people become more accustomed to preparing food and eating at home, the habits of restaurant going may be in some peril, as reflected by the losses posted by businesses reliant on morning drive-through coffee and breakfast dayparts.
These changes to the industry are far from over, depending on a multitude of factors such as the controversial reopening of schools across the country. “The range in the forecast reflects tremendous uncertainty as to the industry heads into fall and winter,” said Chris Elliott, senior economist at Restaurants Canada, in a release. “Restaurants are likely to see further erosion in sales in the coming months with patio season-ending and possible consumer trepidation about indoor dining. A second wave of confirmed COVID-19 cases would potentially lead to sharply lower sales.”
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