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'Ghost restaurants' on the rise as traditional eateries go out of business
Published Tuesday, October 22, 2019 6:04PM PDT Last Updated Tuesday, October 22, 2019 8:07PM PDT
VANCOUVER - Rising operating costs are being blamed for the closure of two well-known Vancouver restaurants, and it's a reality many other local restaurants are also facing.
Nestled between retail stores on South Granville, West Restaurant has been in business for two decades, but before the year is up, it will close its doors for good.
A few blocks down, Ouisi Bistro is also closing because the owners' landlord wanted to double their lease.
Ian Tostenson, president and CEO of the B.C. Restaurant Association, says he's not surprised. Taxes in that area are based on the properties' highest and best use, regardless of what's actually built on the land.
"If you are a small building and the highest and best use is a multi-use building then you are going to be taxed on that potential, so it becomes unaffordable for a restaurant to sit on its own," said Tostenson.
Rising costs in goods and labour are contributing to many restaurants being forced to close.
But a growing trend known as "ghost restaurants" could be the answer.
The Joseph Richard Group, which owns and operates 16 restaurants in Vancouver and the Fraser Valley, is dealing with the crunch by capitalizing on its kitchen space.
"We currently have our regular menu items, plus six other concepts," said Daniel Stringer, a cook with the Joseph Richard Group.
Those other concepts are for the company's numerous "ghost restaurants" that only exist online through delivery apps like Skip The Dishes.
"It's another way to add another line item for the business - to add another revenue if you will - to kind of generate more income," said Richard Moreno, co-founder and CEO of Joseph Richard Group.
For chain groups, it's an added bonus, but Tostenson says for smaller businesses, the concept of ghost restaurants could keep them afloat.
"The competition for restaurants is fierce. It provides some interesting fare that otherwise they wouldn't necessarily do," said Tostenson.
While the ghosts will never fully replace standalone restaurants, he says they represent the future in an industry that is only getting more and more competitive.
"You are not going to see the complete elimination of restaurants but you will see that probably new restaurants that do enter the market will be smaller," said Tostenson.