What helped local eateries survive COVID? It wasn’t location, location, location

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Restaurants in and around London that were “flexible” in what they served and how it was delivered fared better during the pandemic regardless of location, a just-released study of COVID-19’s toll on local eateries found.

Research by a Western University team studied the impact through 2020, the first year of the COVID-19 pandemic, on more than 1,100 restaurants in London and surrounding Middlesex County. It found 175 closed their doors by year’s end, said Alexander Wray, a doctoral candidate in geography.

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Whether an eatery was downtown or in the suburbs had no impact on its chances of survival.

“Location didn’t matter. That was surprising. The pandemic forced us into digital networks and people ordered from their favourite spots” to help keep them in business, Wray said. “If a restaurant didn’t pivot, if they decided to just try to ride it out, they lost market share.”

Restaurants initially had no idea how long the pandemic and closings would last, but those that changed their format quickly to curbside pickup, delivery, online and phone orders and menu changes to delivery-friendly food had a better chance, the research found.

“The biggest thing we gleaned was they had to be flexible with operations,” Wray said, “design a menu, and make sure they invested in their business, and not rely on a third-party for delivery.”

Highlights of the report include:

• Restaurants choosing to list on third-party delivery platforms such as Uber Eats and Skip the Dishes did not increase their chances of survival significantly.
• Restaurants that ran their own in-house delivery were significantly more likely to survive the pandemic.
• During the first year of the pandemic, it mattered more how you served customers than where you were located.
• Allowing takeout and delivery of alcohol likely saved many restaurants.
• Older, more established restaurants were more likely to survive due to greater customer loyalty and larger cash reserves.
• Restaurants in neighbourhoods where residents received more CERB payments were more likely to fail.
• Restaurants located near entertainment venues relying on foot traffic also were more likely to fail. 
• Restaurants that had telephone service as opposed to online ordering only fared better because customers appreciated the human contact.

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Bryan Lavery is a partner in Blackfriars Bistro, a London restaurant that also has a catering business. He recalls “a constant pivot” during the pandemic.

Blackfriars would deliver food to the trunk of customers’ vehicles, contactless delivery that continues now. It opened a pantry serving prepared foods that it also still operates and has proven to be popular.

“We were constantly changing, and that’s why we survived,” he said. “We streamlined a lot and that is a problem we have now, as a lot of people have left the industry. It is hard to find professional staff.”

Per the research, menu offerings also played a key factor in survival. Food that tastes better delivered or picked up, such as sandwiches, pizza and burgers, fared better than fine dining. Restaurants that offered some grocery items, such as Grace, a downtown fine-dining restaurant that opened a small grocery retail spot, also fared better, Wray said.

The study was published in the journal Urban Studies and tracked restaurant activity in March 2020, May 2020 and December 2020.

Restaurants Canada, the industry agency, has tracked the impact of the pandemic on businesses. From March 2020 to March 2022, 13,000 restaurants in Canada closed, it stated on its website. Bankruptcies were also up 44 per cent in 2023.

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But restaurant sales are forecast to grow 2.8 per cent this year and 4.9 per cent in 2025. 

A Restaurants Canada survey in the summer of 2021 found that eight out of 10 independent restaurant owners took on debt, and nearly 75 per cent took on more than $50,000 in debt.

During the pandemic, the Canada Emergency Business Account guaranteed up to $60,000 in loans to eligible businesses, and $20,000 of that amount was forgivable. The loans were provided by banks, but guaranteed by the government. The CEBA program delivered more than $49 billion to nearly 900,000 small businesses and nonprofits across the country.

ndebono@postmedia.com

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