Canadian restaurants were already getting crushed by soaring real estate prices, and now they’re facing pandemic fallout. Data from Open Table shows the big drop off in traffic for restaurants in Canada’s largest cities. Cities like Toronto were already facing weak traffic growth. However, this was capitulated after COVID-19 cases began to rise. Montreal had been bucking the trend until recently, when the federal government began urging people to minimize movement.
About Today’s Data
Today we’re looking at the year-over-year change in the number of diners on Open Table in Canada. Online, phone, and walk-in services are included. The only important note really is when comparing traffic, the industry doesn’t usually do date to date, like one would assume. Comparing a Friday to a Tuesday is pretty much useless. Instead, this compares the day of the week, for the week of the year. Pretty straight-forward stuff, but it may have not made sense if you’ve never seen retail sales by date.
Since this is only Open Table data, it’s not a comprehensive view. However, since it’s such a large platform, it does give us a lot of insight into the sudden drop off of dining behavior.
Toronto Restaurant Traffic Fell The Fastest
The city’s restaurant scene was already hurting from falling household incomes, but it got a lot worse, real fast. The first COVID-19 patient was reported on January 23, after arriving from Wuhan, China. The data starts on Feb 18, when there was only one case – but traffic was already declining. By March 1, the province had four cases. March 9, we see traffic really fall off the chart, and Ontario only had 35 confirmed cases.
Toronto Change In Restaurant Diners
The year-on-year change in diners for the Open Table platform in Toronto. This includes phone, online, and walk-in diners.
Source: Open Table, Better Dwelling.
Vancouver Restaurant Traffic Was Rising Before March
Despite the same falling income trend as Toronto, Vancouver was seeing traffic grow. The first COVID-19 case was Jan 28, but we don’t see any real drop off until March 1. By that day, the province had 8 cases. As we can see, there’s a rapid drop off from there on, although Toronto traffic fell almost 20 points more by the end date.
Vancouver Change In Restaurant Diners
The year-on-year change in diners for the Open Table platform in Vancouver. This includes phone, online, and walk-in diners.
Source: Open Table, Better Dwelling.
Montreal Had The Latest Drop In Traffic
Montreal restaurants, much like its real estate, bucked the trend the longest. It wasn’t until February 27 that the first case appeared in the city. There’s no real consistent drop off for traffic, until March 9 – right around four cases.
Montreal Change In Restaurant Diners
The year-on-year change in diners for the Open Table platform in Montreal. This includes phone, online, and walk-in diners.
Source: Open Table, Better Dwelling.
Calgary Didn’t See A Real Decline Until March
Calgary didn’t have a clear trend before March, after which it took a rapid downturn. Traffic begins a downtrend in March, before the first COVID-19 case begins. On March 5, the first case appeared in the city. On March 15, the city declared a state of emergency. A 54% decline in traffic is surprisingly low for a city with a state of emergency.
Calgary Change In Restaurant Diners
The year-on-year change in diners for the Open Table platform in Calgary. This includes phone, online, and walk-in diners.
Source: Open Table, Better Dwelling.
Canadian restaurants were already facing a big drop in traffic, but the rise of COVID-19 cases have obliterated their bottom line. Some larger restaurant groups in Toronto have already begun laying off employees. Yes, there is going to be some relief for these businesses. However, the combination of thin margins and high priced real estate means it may have a limited impact in helping the 1.4 million people employed in this industry.
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Good point about Toronto, traffic was dropping before the pandemic. Restaurant turn over is very high, and new ownership is rotating fast. There is one place by my house that flipped 3 times last year, and the last owner has it listed now for sale.
Same in Vancouver. Iconic places are citing rent and commercial property taxes as the primary cause. Tax burden shouldn’t be placed entirely on businesses. They should be distributed better amongst the community, since these are commodities that help with valuation.
https://www.theglobeandmail.com/canada/british-columbia/article-iconic-vancouver-restaurant-bishops-to-close-due-to-rent-taxes/
Thanks for this. Would appreciate more commercial coverage if possible.
With hundreds of millions of people now desperate to get out of China, and Canada willing to sell real estate to anyone with a chequebook, none of this will make the slightest dent in local real estate prices. Canadian real estate is the only asset class on the planet that has not dropped. Vancouver area realtors I know say their has been an absolute buying frenzy the past few months. No price is too high.
Hi Bob,
Real estate is the biggest investment Canadians make. We will not sell your our condos for cheap price. Sellers dictate prices. If you want cheap prices, I will simply live in my condo and wait until I can sell it to you for high price. Otherwise, I will not sell it to you. Understand?
Economic inefficiency means workers just move. Why would I stay in Toronto if prices aren’t in line with incomes for an extended period of time, when Montreal or New York City are now cheaper?
This is what happened to Montreal in the late 80s. Prices became so inflated, that a major disruption to the economy made everyone move to a cheaper city – Toronto. Powers shift very quickly after a real recession, which Canada hasn’t had in almost 30 years.
When people in canada are getting laid off, pandemic running wild, country is in a recession, oil prices are 30 bucks we need58 to keep people employed), manufacturing is in a downturn, consumers are filing bankruptcy at record rates.
What on earth could keep the world’s 2nd largest bubble inflated?
The only demand there will be in canada will be for welfare cheques!
Yeah a few people I know are exiting out of the equities market and are looking to park the money into real estate for the time being. I’m in a new area and there’s a new build just 5 houses down and it saw over 40+ people during last weekend’s open house (I’m not in Toronto) and it’s now sold. Mind you that’s obviously not in Toronto prices, but it still went for 925k.
They don’t sound like very smart investors, considering the TSX is hugely undervalued and housing has no market right now.
danyo.
i thik yu don kno what bob did saying.