JLL’s Food & Beverage 2023 report indicates demand is returning in Canada while restaurants continue to battle rising costs and staffing shortages as customers increasingly to seek out experiences when they go out for food and drink.
January reservations in Canada were 38.1 per cent above 2019 levels.
Tim Sanderson, Executive Vice President & National Lead, Retail, JLL Canada, said what’s happening in Canada is mirroring what’s taking place in the U.S. which has always had a propensity to eat out more than people do in Canada.
“I think that people are after how many years of being shut in they just want to get out and experiential food and beverage is something that’s attracting people. I don’t think we have enough of it in this country quite frankly where you can go and have a meal and play some games, whatever. But I think it’s coming,” said Sanderson.
Experience remains one of the top trends in food and beverage. Consumers’ demand for fun and novel experiences continues apace. Consequently, new “eatertainment” concepts are opening as well as “clubstaurants”, which offer members exclusive experiences at a premium price, said JLL.
“It’s a similar trend to introducing food to a shopping centre. When people go to a shopping centre and there’s a place to eat and it’s decent and it’s not just an old tired food court, statistics prove that they spend more time on the property and when they spend more time on the property the conversion rate of buying something other than just food is higher,” said Sanderson.
“Clearly that’s the same thing for a bowling experience. Or something like the Rec Room. Let’s go. Let’s have something to eat. Let’s have a beer or two. And let’s go play some basketball hoops or let’s go play some games. It’s a third dimension to food, alcohol and gaming.”
But restaurants are still facing some challenges these days with many of their costs elevated and finding people to work is not easy. JLL said more than nine out of 10 restaurant operators report that rising costs are a significant challenge to their business. They are battling these costs primarily by raising menu prices, which pass these costs on to the consumer. And staffing shortages are limiting the quality of service restaurants can offer their diners. Operators are offering higher wages, cutting back on opening hours, or utilizing technology to remain efficient.
“We see it when American restaurateurs come to Canada and start looking at wage rates. Our wage rates for labour in Canada for the restaurant business are much, much higher than they are in the United States,” said Sanderson.
“Food as a category is a very thin-margined business. I don’t know where all the people that worked in food service went when the pandemic hit but they all left the industry it seems . . . My personal experience is service levels are troublesome. They’re either under-staffed or the staff aren’t well trained within.
“I think as an industry they do have to work a little harder at training their staff. It’s a problem.”
Canadian operators are focusing on food and fun. Here are a few examples of that in the JLL report:
- In the Greater Toronto Area, Cineplex is opening its new Junxion concept, which is being hailed as the movie theatre of the future. In addition to showcasing movies, games, and live events, Cineplex Junxion Erin Mills will feature a food hall with a variety of food and beverage options, as well as an indoor food truck and bar with a selection of wines and beers.
- Sports and entertainment food operators have positioned themselves in high-traffic areas to capitalize on the growing demand for in-person experiences.
- In Toronto, the city’s first NBA-themed restaurant, NBA Courtside Restaurant, is opening just steps from Scotiabank Arena. Similarly, Vancouver is opening near the Broadway Corridor a basketball-themed bar ─ Courtside Bar ─ that will serve beer and stadium food.
- Vancouver’s Turquoise Goat is the city’s newest board game café, joining a market with numerous board game bars and pizzerias. The café offers an inexpensive and tech-free way to socialize while enjoying simple food and drinks. It has already become a popular destination for patrons.
Related Retail Insider Articles
- Retail Sales Return to Pre-Pandemic Levels in Canadian Malls but Headwinds Persist for 2023 [Interview with JLL’s Tim Sanderson]
- Cineplex Launches New ‘Junxion’ Entertainment Concept with Additional Canadian Locations Planned [Interviews]
- First NBA Courtside Restaurant to Open this Spring in Downtown Toronto [Interview/Renderings]
