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October 13, 2021 | Restaurant Sector Disruption Continues

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

A couple of weeks ago, we met friends for dinner indoors at a well-established, mid-range bar-restaurant that had been busy for years before the pandemic.  We made a reservation, presented proof of vaccination as required, and were one of just three tables occupied at 730 pm on a Saturday night.  We felt for the staff and management.

Despite 72% of Canadians being fully vaccinated, the economic costs of the pandemic are ongoing.  Even restaurants that cater to the wealthiest patrons are in trouble; see Canada’s High-End Restaurants Struggle To Survive:

“Fine dining is going to completely change. It’s going to become casual fine dining. … I just had a management meeting, saying we have to be more accessible to people,” Mr. Vij said. “Allow them to come to the restaurant maybe once a month instead of every three months, or we won’t survive.”

It’s not just that the pandemic has reduced traffic and increased costs.  It has catalyzed change in consumer behaviours.  More people have learned that cooking at home can be rewarding and healthier, physically and financially.  Some 20% in recent surveys say they are not planning to return to their previous eating out frequency.

The hard truth is that some of this is a necessary downsizing of a restaurant sector that became widely over-built during the credit bubble of the past decade. The impacts continue for employees and suppliers as well as landlords and commercial real estate.

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October 13th, 2021

Posted In: Juggling Dynamite

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