The impact of COVID-19 on Canadian restaurant operations and the likelihood of pivoting off-dining options post-COVID-19

Abstract

The COVID-19 pandemic uncovered the weaknesses in the global food system, disrupting food production, processing, distribution, and consumer behaviors. The study seeks to examine the state of recovery in the restaurant operations, changes in supplier relationships, and the likelihood of pivoting off-premise dining options post-COVID-19. Based on primary data from 181 restaurants in Canada, the findings revealed that takeout was the most widely used off-premise dining option by the restaurants in the study before and during the COVID-19 pandemic. The most significant change during the pandemic occurred in the use of curbside pickup and delivery through third-party aggregators. The use of the drive-thru option remained at the pre-pandemic. The pandemic significantly impacted restaurants' sales and traffic levels and permanently closed some restaurant units. As of September 2021, two-thirds of the restaurants reported having recovered more than 50% of full capacity. The nature of supplier relationships during COVID-19 and pre-pandemic firm characteristics (number of restaurant units, business form, and restaurant category) influenced the likelihood of pivoting one or more off-premise dining options post-pandemic. By controlling the effect of pre-pandemic firm characteristics, the study provides empirical evidence on the state of recovery in restaurant operations and the likelihood of pivoting off-premise dining options post-COVID-19.