Work from home trend could take $20 billion bite out of food service revenues
VANCOUVER -- From your morning latte and that salad at lunch, all the way through to drinks shared during happy hour – restaurants, cafes and food courts in the downtown core are suffering while many of their customers continue to work from home.
Ryan Park's Disco Cheetah Korean Grill food truck has seen a dip in customers at its spot near the Vancouver Art Gallery.
"It's too slow," he told CTV News Vancouver. "(We're) 50 per cent down right now, our business."
And Disco Cheetah, catering to tourists and office workers in the buildings nearby, is not alone.
A new study from Dalhousie University's Agri-Food Analytics Lab looked at how Canadians have been spending their food budgets since offices closed, and researchers found people's habits have changed drastically.
"We are expecting revenues for the entire service industry to drop by as much as $20 billion over the next year," says Sylvain Charlebois, director of the lab. "(That) represents, roughly, about 25 per cent of the market."
Before the pandemic hit, he says, about 40 per cent of food spending went to eating out and 60 per cent was spent in grocery stores buying food to cook at home.
"That ratio went from 40/60 to 9/91 a month into the pandemic, so nine per cent service, 91 per cent retail. We're back up to probably around 22/78 right now, 22 service and 78 retail. We are expecting that ratio to go up to 30/70 by next year, but it's not going to be the same," Charlebois says.
"We will likely see many, many restaurants disappear over the next year or so. Instead of just waiting for the money to show up, they're going to have to figure out a way to get to that money, essentially, over time through the use of food delivery apps, perhaps relocating closer to rural communities."
The study also asked people who are working from home when they plan to go back to the office.
"Two Canadians out of five have no idea where they're going to be in a year from now, so there's lots of uncertainty out there," he says.