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Cheaper rent, new chefs, closed restaurants: How COVID will change restaurant landscape

'The only thing tougher for a chef not having a job is owning a restaurant to be truthful'
20200316 mijiidaa ts new
Guelph's Miijidaa is one of many restaurants that have adjusted to the new reality of the restaurant business. GuelphToday file photo

A Guelph food expert is predicting that post-pandemic, those who’ve wanted to get into the restaurant business for years will be able to walk into a shuttered restaurant and say: ‘Yeah. I’ll take it. This is what I’m willing to pay.’

“Eight to 10 months ago, a young chef in his/her 30s would need at least a million bucks to start a restaurant,” said Dana McCauley, a food service expert and director of new venture creation at the University of Guelph’s research innovation office who helps agriculture food researchers transform ideas into commercial ventures.

And this is just one example of how the restaurant landscape will forever change according to McCauley. 

She emphasized that the restaurant model in Canada was broken long before the pandemic hit with restaurants struggling with low-profit margins leaving them with little resilience in a crisis situation like COVID-19.

McCauley said with sales declining, restaurants can hardly afford rent, are facing a massive decline in sales, don’t know what to expect and have to constantly change their business models. 

She said in the last 20 years, the inputs for being a restaurateur went up, salaries went up, energies went up, and rent in urban areas particularly went up. This decreased the margins for independent restaurants with many people trying to decrease their costs by employing fewer staff, buying fewer food items with some restaurants even focusing on single items in an attempt to streamline, have less inventory and be as efficient as possible. 

“So when you already have done everything you can and then the pandemic hits, what happens? You fall to bits,” said McCauley. “That's how it was in February and then March came.”

McCauley said there are many talented chefs and smart restaurateurs closing their restaurants and many underdogs are scooping up downtown locations in cities with rent they could never afford before.  

“There was one week where every single day, someone we knew closed their restaurant — people with really, really established profiles and platforms,” said McCauley, giving the example of celebrity chef Lynn Crawford who had to close down Ruby Watchco in Toronto, reputed as one of the best places to dine in the country. 

“If Lynn Crawford can’t make it. You know it’s hard,” said McCauley. 

Currently, McCauley said restauranteurs are doing whatever they can to survive. 

“This vulnerable sector is taking the brunt of all the lockdowns,” said McCauley.

“They’re pivoting every single day it seems like,” said McCauley, with restaurants having to think outside the box such as selling meal kits and grocery items customers can buy when they pick up take-out orders. “The fact is that culinary arts is based on creativity.”

Court Desautels, president of The Neighbourhood Group of companies that owns four restaurants in Guelph and one in Kitchener, said it's very important to stay creative while navigating the changing landscape. 

“You got to look at who you are as a person and how you're going to help these people,” said Desautels. 

Desautels said The Neighborhood Group of Companies had to make a lot of sacrifices with nearly all employees — 155 workers —taking a voluntary leave (including himself).

“I was in tears the day I had to lay everybody off,” Desautels said.

During the sudden lockdown, their large collection of perishable items were given to staff, donated to charity, or frozen.

“It’s devastating because you don’t know what to do. Nobody knows what to do,” said Desautels. “Then just trying to piece it all together with the landlord and everything else.”

Slowly they opened up restaurants beginning June. 

He said most of his restaurants were not created for takeout orders and so with takeout orders being the primary form of dining during the lockdown, they had to change their ways and establish themselves as a takeout business.

“Take out isn't just ‘Oh great people are going to buy take out,’ You have to look at the dishes you have. Do they travel well? We had to re-engineer menus and look at different offerings.

Desautels said the pandemic streamlined their business model.  

“We became very efficient,” said Desautels.

Still, Desautels says his company is one of the more fortunate ones where he’s able to survive on 50 per cent sales. 

Desautels said it's devastating to see restaurants close down knowing most of them won’t be able to survive. And he too lives with the fear of his business shutting down. 

He said the pandemic did bring a lot of restaurant owners together where they discussed challenges and pooled resources. 

“The world is not going to end. It’s just going to be a little different,” said Desautels.

On Oct. 29, The Ontario Restaurant Hotel & Motel Association wrote an open letter to Premier Doug Ford demanding to know why restaurants in Ontario are being singled out with heightening restrictions with no data pointing out to restaurants as the source of transmission. 

The letter points out Restaurants Canada's estimation that indoor dining closures mandates in Ontario’s COVID19 hot spots have so far resulted in the loss of tens of thousands of jobs, sales losses of as much as 80 per cent for full-service restaurants and over 40 per cent for quick-service restaurants.

“Our local restaurants want to be able to pull through the pandemic and continue serving our communities. However, without transparent transmission data and further government support, half of all independent restaurants are at risk of closing within a year,” reads the letter signed by over 40 large restaurant chains like Tim Horton’s, Ontario Craft Brewers, McDonald's Restaurants of Canada, and Dairy Queen Canada Inc.

McCauley said the failure of a restaurant is like a canary in a coal mine. 

It means that everybody who sold that restaurant a piece of meat, a piece of vegetable, a piece of pasta — they all suffered too. 

“Many of these businesses will never go back to their original model but will keep operating as bodega/grocery concepts, offering take-out experiences such as cocktail kits and online classes in perpetuity,” said McCauley.

“I feel for them. I feel they must be exhausted right now and discouraged. I think it's a tough time. The only thing tougher for a chef not having a job is owning a restaurant to be truthful,” said McCauley.

“When we get through this pandemic, it will be a renters market or a buyers market and there will be lots of really great spaces where people left lots of really great stuff that you'll be able to get into very inexpensively,” said McCauley.


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Anam Khan

About the Author: Anam Khan

Anam Khan is a journalist who covers numerous beats in Guelph and Wellington County that include politics, crime, features, environment and social justice
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