Takeout is booming, dining rooms are struggling, and P.E.I.'s restaurants don't know what's next

When Ethics Surani came to P.E.I. from India as an international student in April, he wanted to get a car, but it wasn't really in the budget. 

"I actually love driving," said Surani. 

"I want to go buy a car and I thought, DoorDash is some income to cover the expenses of a car."

He picked a good time to get into the fast-growing business of delivering food to people's homes. DoorDash had only been available on P.E.I. about 18 months. Similar services, such as Skip the Dishes and TopServe, are also relatively new to the Island. 

The pandemic has been a factor in that growth, but there's more to it than just lockdowns and physical-distancing rules. While the Island has been relatively open during COVID-19, the dining rooms of full-service restaurants are not doing near the business they did in 2019.

Meanwhile, limited-service restaurants — the ones that don't have table service and are more focused on takeout and delivery — have seen significant growth.

That works out for Surani, who likes the flexibility of DoorDash's business model, where he can just sign up to do some work whenever he feels like it.

"Whenever I'm free and I want some extra cash, I can just start it for a few hours," he said.

"It's on my schedule and I like working that way."

Full recovery for limited service restaurants

During the pandemic, people have been stuck at home for some periods of time, and others may well be nervous about sitting among strangers in a restaurant.

But that doesn't mean that they didn't want someone else to do the cooking. According to Statistics Canada, sales at limited-service restaurants on P.E.I. — from May through August — were up 7.9 per cent in 2021 versus 2019.

At the same time, full-service restaurants saw revenues drop 22.9 per cent. The growth in limited service was not enough to make up that loss. Overall, the industry's revenues are down 8.2 per cent.

The balance in the industry has changed in the process. In 2019, full service and limited service had roughly equal revenues. In 2021, a larger majority — 57 per cent — came from limited service.

Carl Nicholson, president of the P.E.I. Restaurant Association, said pandemic public health restrictions that reduced dining room capacity have been a factor in the loss of business.

"That's why you're seeing the full-service, sit-down dining is down, because we don't have the capacity, based on the restrictions," said Nicholson.

With the introduction of the P.E.I. Vax Pass in early October, those restrictions have eased, but it was too late to help restaurant dining rooms during the peak tourism season, the second one of the pandemic.

Restaurateurs will have to wait for next summer to see if diners return, and Nicholson recognizes it is not necessarily a sure thing.

"You wonder what percentage of the population kind of goes, 'You know what, I kind of like it this way,'" he said.

"But, you know, we're still social people, right? We want to get out. We want to socialize."

Will people return to dining out?

David Hopkins, president of the Fifteen Group, a Toronto-based restaurant consulting firm that does work all around North America, is bullish about the future of the restaurant dining room.

"I definitely think it's going to turn back around," he said.

"We're just coming out of capacity restrictions in restaurants, and I think it will take some time for people to get back to a new normal. There's still some hesitancy, there's still some fear. But, you know, eventually people will be going out and wanting to sit in restaurants again the way they used to back in 2019."

Danny Bendas, managing partner of California-based Synergy Restaurant Consultants, which also does work around the continent, agrees, but also offers a note of caution. 

He said there was a move toward takeout and delivery that started before the pandemic.

"People, I think, were becoming more attuned to takeout [and] delivery," said Bendas.

"But I do think that [dining rooms] will recover — those that offer great value, and I don't mean just price, I mean overall experience."

It will take some work to attract people back to dining rooms, said Hopkins. As nervousness about COVID-19 continues, restaurants will have to work hard to make people feel safe

"You did all kinds of sanitary procedures [before the pandemic] but you just did them and nobody cared because they assumed they were being done," he said.

"Whereas now you kind of want to ensure your guests know how important their safety and their health is to you, and [are] communicating that."

'You try to think of everything'

The exodus from dining rooms did not just leave restaurants helpless. It forced them to adapt.

During the first wave of the pandemic, dining rooms were entirely shut down, and that forced many restaurateurs to either offer takeout and/or delivery or close down.

"When you start a new restaurant, you try to think of everything and try to define what you want to be," said Steve Murphy, owner of Slaymaker and Nichols in downtown Charlottetown.

When Slaymaker and Nichols opened at the end of 2019, it was aiming for fine dining in a relaxed atmosphere. Murphy refurbished a building that was originally a home, but most recently lawyer's offices.

He had no way of knowing how the coming pandemic would turn around his business model.

"COVID, a lot of people did whatever they have to do to survive," said Hopkins.

Eventually people will be going out and wanting to sit in restaurants again the way they used to back in 2019.— David Hopkins

Slaymaker and Nichols began offering takeout, and eventually settled on TopServe to offer delivery. Hopkins said for a fine-dining restaurant, takeout delivery can be a challenge, and even a danger. Fine dining is as much an experience-based business as a food-based business, and the takeout experience can put that in jeopardy.

"Your brand and your concept and how people perceive you is very important to your long-term success," said Hopkins.

"High-end restaurants, it becomes really challenging to deliver the experience and what you want your brand to be recognized for."

A failed experiment

For Clam Diggers in Cardigan, long-term considerations were part of a decision that made its takeout experiment short-lived.

Unlike Slaymaker and Nichols, Clam Diggers is in a rural area. That means more time from restaurant kitchen to kitchen table, meaning more time for the quality of the food to deteriorate. In addition, Clam Diggers is mainly a seafood restaurant, and seafood does not travel well.

"Crab platter, seafood platter, none of that travels very well," said owner Arlene Smith.

"It's much better when it's served piping hot and the server can take it to the table, as opposed to boxing it up and having the steam build up in the box and then risking the fact that it might be soggy when you do get at home."

Clam Diggers gave up on takeout in just three days, deciding to simply close until the dining room could reopen.

A permanent fixture

Murphy can understand Smith's dilemma. There are dishes not offered on the delivery menu, and seafood is one of them, for the same reasons Smith outlined.

But Murphy thinks delivery has probably become a permanent part of Slaymaker and Nichols.

With the dining room open again, delivery is not a huge part of the business. As well, it comes with costs. TopServe takes a commission, and it requires another person in the kitchen and in front of house to ensure the smooth operation of the restaurant. Murphy, though, sees employing more people as a bonus. Delivery is still profitable, and he has received good feedback on what has been landing on dining room tables at home.

"That's a big part of why we would continue to do it," he said.

"I think if we weren't able to achieve that, then we wouldn't. But … so far right now, it's working."

Ideally, the P.E.I. restaurant industry could see growth in all facets of the industry, attracting people back into its dining rooms, and continuing to refine the delivery model.

And that would work out just fine for Surani, who said he will likely continue to deliver for DoorDash, even if he takes on a full-time summer job next year.

"I would still have some hours, like on weekends or like sometimes during the day, that I can do DoorDash," he said.