By Sheryl Hoskins
According to a report from Statistics Canada, 50,375 people left Toronto during COVID-19, while Montreal lost 24,880 people to rural areas in Quebec. Meanwhile, the suburbs of Oshawa saw its population grow by 2.1 per cent — the fastest growth in the entire country.
As urban commuters have abandoned their after-work drinks, client dinners, or martini lunches, and millennials have pursued affordable homeownership in a mass exodus from cities, restaurateurs are setting their sights on the suburbs. According to the Wall Street Journal: “High-end urban restaurants have long thrived with the help of suburbanites traveling into the city for a night out. Now those same eateries are making the reverse commute.” Suburban restaurant locations also offer lower rent, less competition, and lower food costs resulting in overall lower risk.
We have continued to see Canadian restaurateurs open new restaurants during the pandemic, with new Lightspeed restaurant openings up 29 per cent from March 2020 to February 2021 across the country. Depending on the province, the number of new restaurants opened year over year is as high as 150 per cent. Similar trends were seen in our U.S. customers, with 34 per cent of new Lightspeed restaurants opening in suburban areas from March 2020 to February 2021 vs. 24 per cent the year prior.
Newly opened restaurants by location during COVID-19: Canada
Newly opened restaurants by geographic setting during COVID-19: United States
Shifting consumer behaviour: online ordering
Online ordering and delivery were must-haves for most urban restaurants, but with mass shutdowns of in-house dining in 2020, suburban restaurants shifted to takeout and online ordering to keep sales coming in.
New research from Lightspeed shows a year-over-year uptick in online ordering sales in rural and suburban regions: restaurants located in large suburbs became the biggest new adopters of online ordering, growing by 3,868 per cent between February and April 2020. Consumer spending in rural and suburban areas on online ordering has also increased since March 2020, as consumers are spending on average more per ticket on online ordering than they are on dine-in.
Case Study: Toro Cantina & The Old Black Forest
“Going viral” is a dream for most businesses, but the overnight fame Lightspeed restaurant Toro Cantina in Albany, New York, experienced was not ideal. The restaurant became known for being ‘the restaurant that opened the day COVID-19 shutdowns started’ in New York state.
Luckily, this was owner Jamie Ortiz’s 13th opening, and he was ready to roll with the punches. “It was on the tip of everybody’s tongue. ‘Worst luck ever.’ ‘Who does that happen to?’ It’s turned out to be a blessing once we got opened back up,” said Ortiz. “You couldn’t pay for that kind of publicity.”
Ortiz focused on the things he could control rather than what he could not. He pivoted all of his salaried employees to managing their online ordering. “We all turned into takeout workers,” he told Lightspeed, “the whole management team.”
While the initial bump in publicity due to its opening day bad luck helped keep Toro Cantina in the news cycle, the team still worked hard to keep that momentum going through the past year. The restaurant has survived and thrived through this pandemic with creative thinking, strong marketing, streamlining its menu, and constant adaptations. “We’ve never seen more efficiency in numbers,” said Ortiz. “We’re still doing great volume, but we’ve never seen food costs this great. I think we learned to be way more efficient. We’re probably more profitable percentage-wise this year, we didn’t rest on our laurels at all. We struggled through every bit of it, but it worked out. It wasn’t easy and I wouldn’t want to do it again!”
Old Black Forest, a Lightspeed restaurant in Nova Scotia also had to shut down 48 hours after they opened their doors for the first time. Owner Nathan Guggenheimer told Lightspeed that his first priority has always been staff morale and safety. He also wanted to keep his community of guests engaged, so he focused on striking a balance between modernizing the former cash-only restaurant and keeping its small-town mom-and-pop vibe. “If I’m making the guest happy, then everything else is going to fall into place,” Guggenheimer said.
He found a similar zen to Ortiz, choosing to focus only on what he could control and keep moving forward. Guggenheimer launched a new initiative during COVID-19: the “Four for Four” program, for every four dollars in sales, the restaurant would donate a meal to community members in need. “If you have the heart, then you don’t look at things the same way,” Guggenheimer says of the past year’s trials. “There’s always a problem and you have to brainstorm the solution. But there’s always a solution.”
If your restaurant or small business has thrived through the last year, a suburban expansion might be the right move for your business. The way independent restaurateurs around the globe have pivoted to make it through the last year has been moving, motivating, and inspiring. We can’t wait to see how our industry continues to evolve.
Sheryl Hoskins is the Global GM of Hospitality at Lightspeed, a leading provider of cloud-based, omnichannel commerce platforms, and has two decades of experience leading and growing software IT businesses in various industries including healthcare and activity and event management. Prior to Lightspeed, Sheryl was the CEO of Upserve, a hospitality technology and analytics platform that was acquired by Lightspeed in December 2020.