COVID WAR KILLING RESTAURANTS

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The government of Canada's Ontario province set in place, on 5 January, new measures set to run through at least 26 January in response to what it calls a "tsunami" of new COVID-19 cases (no deaths). Among the restrictions are a ban on indoor dining and an order for many indoor businesses, including gyms, concert venues and theaters, to shut down.

TRENDPOST: With the "more virulent" Omicron variant now at the forefront, there may indeed be a "tsunami" of cases; there is no corresponding tsunami of deaths attributed to Omicron. As of 23 December, the Toronto Sun reported that, across Canada, Omicron had not been responsible for a single fatality.

As reported by Bloomberg on 4 January, there is pushback from business owners who feel the hardships imposed upon them will result in permanent closures. A study by the Canadian Federation of Independent Business states that small businesses have incurred an average of $190,000 in additional debt in order to stay open in the midst of various lockdowns.

An operator of a worldwide chain of Middle Eastern restaurants (many of them in Ontario) quoted by Bloomberg said the new rules could lead to "a bloodbath" among small businesses which are already struggling, citing restaurants that had already shut their doors forever. He called on the provincial and federal governments to provide assistance, particularly to the restaurant sector. 

Another issue challenging small businesses faced with lockdowns cited by the restaurateur is the difficulty of maintaining a workforce; people tire of the cycle of being let go and then re-hired, and eventually choose to not work in that sector; the restaurant business has been especially hard-hit by such "labor uncertainty"; see "LOCKDOWN ORDERS DESTROYED RESTAURANTS" (25 May 2021) and "WORKER SHORTAGES, VIRUS HOBBLE RESTAURANTS' RECOVERY" (14 Sep 2021).

TREND FORECAST: According to a letter signed by 3,300 U.S. restaurant owners, their debt loads are growing heavier, costs are increasing and the scare of “rising” COVID Cases are scaring away customers. Indeed, full-service restaurant business is down 18 percent since the COVID War was launched two years ago and seating at the end of last month fell 32 percent.  

With winter now set in, and more people catching colds, the flu, and getting tested positive for the virus—combined with the media continuing to sell COVID Fear and more establishments demanding vax passports to enter—the restaurant, entertainment and hospitality sectors will continue their decline. 

When the COVID War begins to wind-down and vax passports are no longer required for entry—which we anticipate will be late March to mid-April—these business sectors will strongly rebound.  

TRENDPOST: While such a situation is not peculiar to Canada, it does echo what Trends Journal reported in "HALF OF CANADIAN RESTAURANTS MAY FAIL BEFORE JANUARY" (27 Oct 2020); then, as now, a ban on indoor dining is especially tough on restaurants during winter, and especially in a climate like Canada's.

TREND FORECAST: The restaurant business has always had a high failure rate, even in good times. But it has traditionally provided employment opportunities for the unskilled, the inexperienced, and for immigrants. In the COVID War, it was the first to suffer and may prove the last to recover. 

And any "recovery" will likely change the face of the industry; it will be more difficult, if not impossible, for locally-owned "Mom & Pop" restaurants to start up, let alone survive; who wants to start a business that can be shuttered overnight by a government whim?  

The future of the restaurant business will be dominated by large chains with deep pockets, but there will still be far fewer restaurants overall and far fewer employment opportunities for the industry's traditional workforce. 

Once again, the "cure" will prove worse than the disease.


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