What about the future in Quebec?

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Gilles Trépanier, Restolutions Inc. April 3, 2020

Let’s try to see in the crystal ball what the future of restoration in Quebec will be after the pandemic? Difficult exercise if there is one……

It’s hard to predict the future.

First, how many will survive?

It is clear that many players will not be able to get to the finish line, which is the end of the pandemic. The duration of the containment will have a definite impact on the number of restaurants that will be able to continue operating…. But how many will succeed?

In order to get an idea of the order of magnitude, let’s see first, what the experts are planning across the border.

The NRA (National Restaurant Association and not National Rifle association !!!) recently published that to date 3 of the restaurants in the United States were permanently closed and that another 11 was expected in the next 30 days… Eventually, one sooth predicted that 30 of the restaurants might have to close…. At the last count, there were 660,775 restaurants and 307,940 of them are restaurants that are part of chains… If the 30 was reached, we are talking about the closure of 200,000 establishments… Even if the minimum number (11 ) were found, we are still talking about the closure of more than 70,000 restaurants.

By transposing these figures for Quebec and its number of restaurants in operation (20,737 according to the ARQ),we arrive at a minimum of nearly 3,000 closures and, in the worst case scenario, more than 6,000…. Several experts consulted believe that a realistic number lies somewhere between these two extremes… All the more so since the percentage of self-employed
(58 ) is larger than in the rest of Canada (40 ) and the United States (35 ).

What type of restaurant is most likely to move to through the crisis?

It is believed that the number of closures will be greater among independent restaurants because the financial position of the chains seems more solid (mix product better adapted, possible support of the head office, greater bargaining power with landlords, royalty leave, etc.). The economy in general will suffer from the crisis and purchasing power will decrease, which I believe will lead to a migration of consumers from higher-end (mostly independent) restaurants to chain restaurants. The best-positioned restaurants will be the ones with the best quality/price positioning under the circumstances. Consumers will be very price sensitive…. Also, restaurants that have been able to retain certain customers through their delivery service and, as a result, will have been able to generate significant revenues when the time comes to take stock will have a higher survival rate.

Possible change of habits….

It is also difficult to predict consumer behaviour at the exit of COVID-19. Will they return to the good old ways of visiting their favourite restaurant once or twice a week, or will they have developed the taste and ability to prepare meals at home? This could be a determining factor during the recovery….

Will people have a taste for meals at home?

Which is for sure….

The industry will no longer be the same, and it may take some time to regain the dynamism, creativity, and profitability of pre-COVID-19. Customers will need to be reassured (the fear of a virus will remain in consumers’ memories for some time). There will also have to be changes in the way things are done… and above all, communicate them well. Easy enough to demonstrate a new packaging or the efficiency of a delivery system. But how do you inform about the care taken in food preparation, safety efforts in general or any practices that have been put in place to secure the product? You’ll have to be creative and use all the platforms to get the message across.

Let us hope that the various measures promised by the various governments will help to get through the crisis, to as many players as possible in this beautiful industry that sets us apart, that makes our reputation and that is an important economic engine. Unfortunately, the severity of the period we are going through will mean that many (hopefully) signs will disappear from the Quebec landscape…