After restaurants and bars in Ontario experienced a rebound in sales during the summer, some restaurant owners and economists are expecting a rapid decline in business with the arrival of colder months.
An analysis of data released by Statistics Canada in September showed restaurant and bar sales in Ontario increased in May, June, and July.
The increase in sales was preceded by the establishments opening up again after the province forced them to shut down in March and April, at the beginning of the COVID-19 pandemic.
On Oct. 9, the Ontario provincial government announced indoor dining and drinking will once again be prohibited, as the province entered its second wave in late September.
Physical distancing rules also loosened up in many Ontario municipalities over the summer, possibly contributing to the slow increase in people going out to eat or drink after the re-openings, according to Anna Feng, an economist at the Conference Board of Canada.
Despite the summer increase, sales at Ontario restaurants and bars in July only reached half the numbers of the previous year, in July 2019, according to an analysis of the Statistics Canada data.
Feng said although country-wide sales in the restaurant industry increased in July, according to the Stat Can numbers, the unprecedented drop in March and April means the industry has still not fully recovered.
“It’s the largest drop we’ve ever seen in history,” Feng said, adding that the July increase has not yet caught up with numbers from the previous year.
Although restaurants and bars this summer saw an increase in sales, they did not make a full rebound. (Visualization by Leila El Shennawy)
Joelle Parenteau, one of the owners of Ottawa fast-casual sandwich restaurant Wolf Down, said the late summer months until now have been great for her business.
“We’re busier than ever,” Parenteau said.
One of the federal government’s first COVID-19 aid programs, the Canada Emergency Response Benefit (CERB), is one reason Feng attributes to the increase, in addition to pent-up demand.
“There’s less concern (for) their financial condition,” she explained. “That means Canadians can spend a little bit more on those leisure [activities] and dining out over the summer.”
Feng said restaurant owners can expect to see a larger drop than usual in sales this year as soon as the weather is too cold for patrons to sit on patios.
“Now, people are going out because they’re sitting on patios, enjoying the summer and the fresh air,” she said. “But as soon as we enter the winter, the cold weather, the snow and blizzards, it’s just going to be impossible for people to sit on patios.”
Without patios, that leaves dining indoors. With the arrival of the second wave of COVID-19 in Ontario, and record-breaking numbers being reported in some of the province’s largest cities, Feng says indoor dining is likely to be limited even further.
“That will just take a further hit to the recovery of our restaurant industry.”
A small winter dip is typical, according to Statistics Canada numbers, since last winter saw a small sales decline in the winter months. This graph also shows the drop in sales during the pandemic. (Visualization by Leila El Shennawy)
However, Feng says, another major contributor to sales, food delivery apps such as Uber Eats and Door Dash, may help keep restaurants in Ontario afloat through the winter.
Parenteau said her restaurant relies heavily on takeout and delivery, and that they have been lucky in that regard.
“We’re fortunate to have been in a position where we could just double down on takeout and delivery,” she said. “We’re fast casual, so it’s much easier for us to transfer the sales over to takeout versus restaurants that rely on dine-in.”
Despite an August prediction by the Canadian Chamber of Commerce that 60 per cent of restaurants could close within three months without aid, Feng said it is unlikely Canada will experience permanent, mass closures of eating and drinking establishments.
Feng said the Conference Board of Canada’s own analysis predicts the Canadian restaurant industry will be able to return to its pre-pandemic state.
“In the very long-term, probably by the end of 2021 or by early 2022, we expect the restaurant sales to come back to its pre-COVID level,” she said.
Parenteau said her business is doing well enough that it will likely survive the pandemic. Still, she says, the uncertainty has been difficult.
“It’s been a little more stressful than usual because you just never know what piece is going to fail next,” she said. “It seems like every week there’s something new, a struggle.”