What contributed to restaurant survival during the first year of the pandemic in a midsize Canadian city?

In Canada, the pandemic prompted government action to protect public health. These restrictions affected restaurants by banning or limiting them from offering in-person dining. Many restaurants adapted by offering takeout and delivery. Others chose to close entirely until in-person dining was allowed again. 71% of those restaurants never re-opened.

The Food Retail Environment Study for Health and Economic Resiliency (FRESHER) project was funded by the provincial government of Ontario, Canada to identify policies that could lessen the impacts of the pandemic on the food-related sector. In London, Ontario, a midsized Canadian city, restaurants are a substantial employer and major economic sector. For its size, the city is host to a substantially higher number of restaurants that are featured in national and international culinary magazines. Food is part of London’s urban identity.

During the first nine months of the pandemic, we studied factors that influenced restaurant survival and found that operational decisions played a critical role. Restaurants that adapted by offering pickup and delivery options, had drive-thrus, held liquor licenses, or were established for more than five years were more likely to survive. Surprisingly, out of the many geographic factors investigated, we found that only proximity to entertainment venues, and the neighbourhood’s reliance on government assistance for their income were significantly associated with survival. Entertainment venues were closed for the entirety of 2020, which likely reduced foot traffic to nearby restaurants, leading to higher failure rates. Neighbourhoods with higher proportions of government income assistance recipients also saw more closures, reflecting reduced discretionary spending by nearby consumers.

Table-service restaurants fared better than fast food outlets, likely because they could offer large patio dining spaces during the summer months. Restaurants with liquor licenses benefited, especially after a regulatory change by the province allowed alcohol sales with takeout and delivery, a first for Ontario. Older, more established restaurants were also more resilient, likely due to financial stability and customer loyalty.

Interestingly, third-party delivery platforms did not contribute to restaurant survival as compared to other takeout and delivery methods. Yet, these digital platforms are rapidly changing urban landscapes through the creation of “ghost kitchens” which geographically diffuse the relationships between restaurants and consumers. Their long-term effects on urban landscapes warrant further study and policymaker attention.

We found that ‘location, location, location’ was not the deciding factor for restaurant survival. While classical retail location theory is not irrelevant, the patterns observed in our analysis should give pause to urban scholars and policymakers about how we theorise and explain the processes that affect commercial real estate in the city. Many main streets are still struggling to recover from the economic and social harms experienced during the pandemic. These visible problems may be discouraging employers, tourists, and residents from spending their money and time in these areas of the city, leading to fewer restaurants and other retail businesses. This likely causes a destructive feedback loop for the core area of a city. Without concrete policy action, supported by further research, capital may understandably choose to concentrate in the wealthiest and the most attractive areas at the peripheries of cities while depriving everyone fundamental economic and social capital opportunities.

Read the full article on Urban Studies OnlineFirst here.