Food and Beverage Retailers in Canada Hit Hard Amid COVID-19 Panic

neighbourhood retail on eglinton avenue west, toronto. photo: the eglinton way bia

By Jessica Finch

As Canada continues to combat COVID-19, mass closures, reduced hours, and limited social gatherings have all impacted the retail industry. With people being strongly encouraged to self-isolate, work from home, and avoid public spaces, small businesses, in particular, are suffering the consequences.

The food and beverage industry has been doing what it can to keep some aspect of normality during the turmoil. Until recently, many bars and restaurants were remaining open for business, but with the past 48 hours seeing major adjustments within Ontario alone, including the restriction of sit-down service and only allowing businesses to operate their take-out/delivery options, normality is fading fast and making room for unprecedented uncertainty.

While other industries can operate remotely with relative success, restaurants, bars, and coffee shops are feeling the impact of these closures unlike most others. Employees are left without paycheques, perishable stock is left uneaten, and rents are left outstanding. Despite the allowance of take-out food to be delivered and picked-up, the industry is suffering greatly as COVID-19 wreaks havoc on the economy.

image: techcrunch

As people are encouraged to self-isolate and avoid exposure of any kind unless absolutely necessary, food delivery services are availing of the increased demand. Uber Eats is offering free delivery to surrounding communities and its website is asking customers to think of their local restaurants and support them by ordering from smaller establishments rather than chain restaurants.

People are being encouraged to buy gift cards from their favourite local hotspots, offering just a small injection of cash into the business to help with the low margins many are struggling with. Some restaurants across the country are appealing via social media to their loyal customers to remember them during the outbreak and to think about making reservations for the coming months or buying gift cards, even just to sustain morale within the communities.

Despite most closures being deemed as temporary, it is currently unclear as to how long these closures will last. COVID-19 has proven to be relentless in many aspects, perhaps meaning that some smaller establishments could face the possibility of never opening their doors again. In the face of this possibility, the government will be forced to evaluate possible tax deferral measures to help small businesses manage their cash flow and payroll obligations.

image: freshprep

On a somewhat positive note, meal prep delivery services such as Fresh Prep, CleanBite, and HelloFresh are sure to see heightened demand as people refrain from buying groceries in the traditional sense. These services offer everything one needs to prepare full meals from the comfort of their own home. All ingredients are delivered to one’s door in correct quantities, ready to be prepared, and generally people subscribe to the service for weekly delivery.

Vancouver-based Fresh Prep has seen great success in recent years, with many people opting for the meal prep delivery service to shoulder some of their everyday stress.

The QSR (Quick Service Restaurant) portion of the industry is also taking drastic measures in attempts to flatten the curve. On March 12, Starbucks CEO, Kevin Johnson, released an official statement on Starbuck’s website stating “as we navigate this dynamic situation community by community and store by store, we may adapt the store experience by limiting seating to improve social distancing, enable mobile order-only scenarios for pickup via the Starbucks App or delivery via Uber Eats, or in some cases only the Drive Thru will be open.” These steps have since been implemented in Canada. At this point all QSR seating has been cornered off or removed across the country.

starbucks seating area closed off in winnipeg. photo: winnipeg news

empty starbucks seating area in hamilton. photo: the hamilton spectator

McDonalds has reminded its employees that all of its corporate-owned restaurants in Canada and many of its franchisees have existing policies in place to offer paid time off. Tim Hortons is taking similar steps as everyone else, and even completely closing particular stores in high-volume areas such as malls and universities.

It is clear that the fast-food chains will not struggle as severely as the smaller businesses, however it is unclear how COVID-19 will impact the sector in the long run. People may refrain from choosing to sit in close proximity to others for a prolonged period of time even after the pandemic is under control. Only time will tell how people’s habits will be affected. This could mean continued prosperity for delivery services and meal prep companies.

As the whole world continues to grasp the magnitude of COVID-19 and adapt to the necessary precautions put in place, one thing is clear: this pandemic is sure to leave lasting effects on the food and beverage industry. No establishment will come out unscathed — already so many are suffering — but with worries that some will not make it out at all, the possibility that whole retail communities may deplete is a valid concern.

Jessica Finch is a writer and editor based in Toronto. She holds a BA in English and Psychology and is a graduate of Ryerson University’s Publishing program. She has extensive managerial experience in the food service industry, and is interested in exploring innovations within this sector and other retail environments. Email: jessica@retail-insider.com

TODAY’S TOP HEADLINES

SUBSCRIBE to Retail Insider's Daily E-News for Free:

* indicates required

Email Address *