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The work-from-home trend sparked out of necessity by COVID-19 has had a devastating impact on Canada’s hospitality industry.
A new report released by Dalhousie University on Tuesday suggests the industry could lose up to $20 billion in revenues in the next year, with 30% of that due to telecommuting.
“This will force urban cores to redefine how they accommodate retail businesses, including food service, and so if you’re a coffee shop in downtown Halifax you’re probably going to see fewer brainstorming meetings, fewer chats over coffee, fewer business lunches,” said Dalhousie University professor Sylvain Charlebois, the report’s lead author.
“It’s much harder to generate business when people are staying home. What it means is that the food service industry will look very different in a year or two from now.”
The report focusing on telecommuting and food expenses during the pandemic is a collaboration between Dalhousie University’s Agri-Food Analytics Lab and Ontario-based research firm Caddle. It involved a nationwide survey of 10,851 Canadians at the end of July asking if and how they planned to change their lifestyles to spend more time working from home.
The takeaways are that more Canadians plan to work from home whenever possible, fewer are visiting restaurants on their work days, and fewer expect to regularly frequent them in the next year.
“If you spend more time at home working, you will consume food very differently, you’ll cook it more often. People have more gardens than ever before in Nova Scotia,” Charlebois said.
“I’ve had several conversations with different people in Halifax saying ‘I used to buy coffee every day, I used to buy something every day from a shop and not any more.’ I’m actually one of them, too.”
Prior to the pandemic, 36.8% of Canadian respondents said they were going to a restaurant or ordering out for a meal or coffee break at least twice during the work week. When asked about those plans after the pandemic is over, only 23.3% said they intended to visit restaurants at least twice a week.
Before the pandemic, 6.1% of Canadians indicated they went every day. Only 2.9% expect to go daily once it’s over. In Nova Scotia, those figures had 6.4% frequenting an eating establishment on a daily basis pre-pandemic. Only 2.1% plan to afterwards.
Nova Scotia figures also have 66.1% of respondents saying they’d visited a restaurant or ordered out for a meal/coffee break once a week during the workday prior to the pandemic. But 78.6% indicated a desire to go once a week in a post-pandemic world.
“So you can see that people are planning to go less frequently, but they are still planning to go visit once a week,” Charlebois said. “The frequency is going to drop significantly. And that’s a lot of money. If I were a restaurant owner in downtown Halifax, I’d be super worried.”
When survey participants were asked if they planned on working from home more often a year from now, 23.6% said yes, while 36% said no/they can’t work from home. An additional 18.4% said they didn’t know, and 22% said they don’t know what they’ll be doing in a year from now.
Appetite for telecommuting
“I think there is an appetite for telecommuting, and I think Nova Scotians actually overall haven’t hated the work-from-home. They see the advantages,” Charlenois said.
Breaking down the national numbers to highlight the Nova Scotian experience, Charlebois said 17.9% of Nova Scotian respondents to the survey said their employer is planning to allow more people to work from home.
“That’s almost one in five Nova Scotians…employers and employees are seeing benefits of allowing people to work from home,” he said.
“You can save on costs, you can increase the quality of life for your employees. Employees can reduce the costs to go to work. You don’t have to commute, you don’t have to buy a new wardrobe as often.”
While telecommuting offers benefits to both employers and employees, Charlebois said it’ll force the entire food service industry to “recalibrate.”
“The money won’t go to them anymore quite as much, so they have to figure out how to get to the money, and one of the ways to do that is by using apps or to relocate and things like that,” he said.
“I do believe that people will want to congregate physically and meet up over coffee. That’ll continue. We’re social beasts, and you can actually bring in the best tech possible but I don’t think you can replicate that. But if you’re a restaurant owner you’ve got to think about how to get to people living either in HRM outside the peninsula or even more remote locations.”
Now that working from home is an option, 7.5% of Nova Scotians surveyed said they intend to move within the next year. Asked if they plan to work from home more often a year from now, 27.5% of Nova Scotians said they have no idea where they’ll be in a year.
Another number that jumped out at him was how many Nova Scotians indicated they were currently unemployed. Between 23% and 24% of respondents answered with the option ‘I don’t have an employer currently.’
“My guess is this fall is going to be very hard for a lot of Nova Scotians and we have to be ready for that,” he said. “It’s going to impact many sectors, including food service.”
The Nova Scotia data also indicated some generational differences when it comes to the work-from-home experience. Only 14% of baby boomers said they enjoyed working from home during the pandemic, compared to 36% of millennials.
Charlebois said COVID-19 is going to force the food industry to redefine itself, adding that employers need to find innovative ways to run their businesses and pay their employees.
“If that sector wants to remain a sector of choice for employees looking for jobs, they have to really up their game,” he said. “They need to redefine business and get to a market that is changing and transforming as a result of telecommuting.”
For this report, a total of 10,851 Canadians were surveyed between July 27- 29, 2020. The sample carries a margin of error of +/- 3.1 percentage points, 19 times out of 20.
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According to the numbers I have seen, a lot of people with spare time and extra money are putting that money to work in the Stock Market. While if they can afford to do that , well good for them. Just expect to see it all disappear quickly and end up with a large tax bill next March potentially.
But there are also people not paying their rents, and just generally not coping well mentally with the current crisis and spending money in ways that “help their sanity”. Online sales of entertainment items, electronics, and games is increased greatly. RV sales in some States and provinces are off the scale.
Thankfully we are generally a more conservative bunch of spenders here in Nova Scotia. It is just a shame that more of us did not support local businesses first in these difficult times. The hundreds of cottage industries that we could spawn, and the huge domestic economy that this would build would be a worthy investment in our futures. 🙂
What seems missing from these conversations re restaurants is the possibility that people might actually be saving the money they are not spending on meals/coffee out. I mean, wouldn’t that be a good thing? We frequently see stats on the low amount of savings Canadians have in the bank. Most basic budgeting books will tell you first thing to cut the money you spend eating out and your expensive daily latte habit (luxuries not needs). Of the respondents who still have jobs, I wonder if they saved the money for the rainy days ahead or just bought more stuff on Amazon.