The Lives and Deaths of Cities

[lio45]

Originally Posted by Acajack

Have to wonder if the only dynamic urban streets in our cities in the future won't all be lined with Door Dash and Amazon pick-up counters.

I'm slowly trying to reduce my exposure to brick-and-mortar retail real estate (not urgently, but it's one of my criteria nowadays) for that exact reason.

On a related note, I think this forum's collective brainpower could be tapped for general long-term investment advice; we used to have such a thread, in fact. (I'm probably going to restart one some day.)

[whatnext]

Originally Posted by Acajack

We've seen several major high-profile restaurants close down in my city in recent weeks, and this has caused me to become a lot more concerned about the future as I sense that many more are teetering on the brink right now. We know a number of places that would normally be packed on Friday and Saturday night that we've witnessed half-empty or less recently.

With the decline of street-level retail that's never coming back as it once was, I saw more experiential stuff like restaurants, bars and cafés as key to their viability, but now it seems like that could be going down the tubes as well due to rising costs.

If we're lucky it's mostly a question of this moment's inflation and the sector will rebound when costs come down, but my fear is that it isn't just that and that a lot of people's habits changed for good during the pandemic.

We're a couple of years out from the pandemic now, and you'd think things would be back to normal now. I don't think they are in most places and while some spots are booming, I'd say your average restaurant, bar or café isn't back to pre-pandemic business, and I am afraid it may never come back like before.

Apparently more than half of Canadian restaurants are losing money. On the other hand, when I was growing up i could count the number of times we went out to dinner in a year on one hand. MCDoanls was a big treat, not a "what's for dinner" moment. One of the fastest ways people could cut down on their monthly budget is eliminate dining out.

It is just a shame that the internet is killing street level retail at the same time. What reason will there actually be to go out and stroll Canada's high streets?

[Truenorth00]

Originally Posted by Acajack

Have to wonder if the only dynamic urban streets in our cities in the future won't all be lined with Door Dash and Amazon pick-up counters.

I disagree with this. Walkable streets will always have good retail. Foot traffic ensures it. For them delivery apps are just marketing. For the places you have to drive? Delivery apps will be major income. This is why the ghost kitchens are all outside downtown areas and usually located near highway access.

Think of it yourself. What is the distance you would walk from your house in the middle of winter to a restaurant or retailer you like in lieu of a delivery? How many such places are near you? And how many such places would there be on a walkable street?

[lio45]

Originally Posted by whatnext

Apparently more than half of Canadian restaurants are losing money.

Another recent article I saw had many restaurants dreading the quickly approaching deadline for reimbursing their Covid-Era CEBA; plenty could close, according to most observers. (Without repaying their generous Justinian loans, obviously. CEBA isn't personally backed, a business' shareholders didn't have to personally become collaterals, another IMO stupid LPC decision during their Covid money-is-no-object spree)

[casper]

Originally Posted by lio45

Fascinating, but I can't help but notice you're giving casper ammo to point out that "there's no housing crisis in Canada, look at all that vacant housing in Saskatchewan right now!"

Speaking of which, I just had a business idea

1) Sell off whatever assets I need to sell, to acquire the entirety of Uranium City.
2) Create "the Northwest Saskatchewan College".
3) Have my new postsecondary institution sell Canadian visas to South Asians by the boatload.
4) Rent all my Uranium City housing to them at high-ish prices.
5) Profit!

Obviously. I have a good friend that use to work on the Uranium City cleanup project for the Saskatchewan Research Council, they had the contract to manage the cleanup of Uranium City. A multi-decade project.

You would need to provide a bit of training to the students to avoid going for walks on the tailing of radioactive material and avoid the unlabeled drums in the industrial buildings.

Saskatchewan and Alberta have a long history of very small independent post secondary religiose institutions in small towns. So your all set with your business plan.

[casper]

Originally Posted by lio45

Another recent article I saw had many restaurants dreading the quickly approaching deadline for reimbursing their Covid-Era CEBA; plenty could close, according to most observers. (Without repaying their generous Justinian loans, obviously. CEBA isn't personally backed, a business' shareholders didn't have to personally become collaterals, another IMO stupid LPC decision during their Covid money-is-no-object spree)

Lets see how it turns out next year. It accomplished its goal of helping to stabilize the economy during a very difficult time. I don't think the conservatives or business community were objecting to the program at the time.

[Truenorth00]

Originally Posted by whatnext

Apparently more than half of Canadian restaurants are losing money. On the other hand, when I was growing up i could count the number of times we went out to dinner in a year on one hand. MCDoanls was a big treat, not a "what's for dinner" moment. One of the fastest ways people could cut down on their monthly budget is eliminate dining out.

The reason half of all restaurants are losing money is that the value proposition genuinely sucks. We don't go out much. Both for health and monetary reasons. My wife recently had a get together at a restaurant. She thought she got ripped off when a Caesar came to $20 with tax and tip. What's the point of going out when a family night out at Swiss Chalet is $80 and a very light date night with two apps and two drinks is $100?

In this environment, it makes no sense at all to eat in lower end dine-in restaurants. Better off to use the ready-to-eat counter at Loblaws for $50 than go to Swiss Chalet for $80. And better to save that restaurant outing for a $200-300 outing once every 2-3 months than a casual restaurant once every two weeks. And this is increasingly the way restaurants are going. The high end and takeaway/fast food is booming. The middle is dying.

Originally Posted by whatnext

It is just a shame that the internet is killing street level retail at the same time. What reason will there actually be to go out and stroll Canada's high streets?

I don't think street level retail is dying. I don't see much turnover in streets with lots of foot traffic. I think malls (especially second or third tier) are slowly dying. And I think that's great. These are insanely expensive retail spaces that we mostly don't need in the internet age.

I also see some suburban plazas and strip malls dying. Especially in older neighbourhoods. To be expected, with their fossilized demographics. If you opened a pizza shop in a neighborhood full of families 25 years ago and now all the kids have moved out, your clientele just got halved. If there's no sign, of redevelopment, probably best to close up shop.

[casper]

Originally Posted by Truenorth00

In this environment, it makes no sense at all to eat in lower end dine-in restaurants. Better off to use the ready-to-eat counter at Loblaws for $50 than go to Swiss Chalet for $80. And better to save that restaurant outing for a $200-300 outing once every 2-3 months than a casual restaurant once every two weeks. And this is increasingly the way restaurants are going. The high end and takeaway/fast food is booming. The middle is dying.

I am of the same view. At this point I only go to restaurants when I am traveling on business. I am traveling far less than in years past.

The uptake in skip and uber eats is not great for that industry. The software platform takes a good percentage of the margin on those orders. That is not path to success either.

[MolsonExport]

Originally Posted by Truenorth00

The reason half of all restaurants are losing money is that the value proposition genuinely sucks. We don't go out much. Both for health and monetary reasons. My wife recently had a get together at a restaurant. She thought she got ripped off when a Caesar came to $20 with tax and tip. What's the point of going out when a family night out at Swiss Chalet is $80 and a very light date night with two apps and two drinks is $100?

In this environment, it makes no sense at all to eat in lower end dine-in restaurants. Better off to use the ready-to-eat counter at Loblaws for $50 than go to Swiss Chalet for $80. And better to save that restaurant outing for a $200-300 outing once every 2-3 months than a casual restaurant once every two weeks. And this is increasingly the way restaurants are going. The high end and takeaway/fast food is booming. The middle is dying.

This. It is crazy how expensive shitty fast food has become in recent years. Better to pare back on this crap and save the dollars for great tasting ethnic cuisine (at similar or even lower prices) or fine dining.

[someone123]

Originally Posted by MolsonExport

This. It is crazy how expensive shitty fast food has become in recent years. Better to pare back on this crap and save the dollars for great tasting ethnic cuisine (at similar or even lower prices) or fine dining.

Around here of course all food prices have gone up, but it doesn't seem like they all went up in lock step. I am often surprised at how cheap it is at some of the small places and in particular Chinese restaurants (some of them here being very tasty and good value for dollar). Then again a lot of it is mostly blobs of starch even if it is tasty.

Meanwhile upscale casual burgers and beers for 2 are $80 now with tax and tip.

[Acajack]

Originally Posted by Truenorth00

I disagree with this. Walkable streets will always have good retail. Foot traffic ensures it. For them delivery apps are just marketing. For the places you have to drive? Delivery apps will be major income. This is why the ghost kitchens are all outside downtown areas and usually located near highway access.

Think of it yourself. What is the distance you would walk from your house in the middle of winter to a restaurant or retailer you like in lieu of a delivery? How many such places are near you? And how many such places would there be on a walkable street?

Best-case scenario I think will be walkable attractive streets having a mix of unique local businesses and national and global brands, though with the Starbucks, Zaras, H&Ms and Sephoras of the world occupying a greater and greater share as we go forward.

Even before the pandemic and online shopping really took off there were already complaints that shopping streets in major and minor world cities were increasingly all dominated by the exact same brands, to the point where it was sometimes hard to tell which country you were in.

[lio45]

Originally Posted by Truenorth00

My wife recently had a get together at a restaurant. She thought she got ripped off when a Caesar came to $20 with tax and tip.

I had a similar experience this summer, my gf really craved a Caesar salad so we stopped for takeout at a value chain ( https://www.benny-co.com/ ) and I gave her a green Elizabeth II bill while I was waiting in the car, and she had to come back to the car to ask me for more because that round $20 wasn't even enough to cover the actual amount due (pre-tip)!

[lio45]

Originally Posted by MolsonExport

This. It is crazy how expensive shitty fast food has become in recent years. Better to pare back on this crap and save the dollars for great tasting ethnic cuisine (at similar or even lower prices) or fine dining.

+1. I dislike not getting value for my $ so whenever we eat out now, it's high end stuff -- the "missing middle" for restaurants, unlike for housing, really sucks. Worst of both worlds: high-ish prices, shitty food. No thanks!

[Truenorth00]

Originally Posted by lio45

I had a similar experience this summer, my gf really craved a Caesar salad so we stopped for takeout at a value chain ( https://www.benny-co.com/ ) and I gave her a green Elizabeth II bill while I was waiting in the car, and she had to come back to the car to ask me for more because that round $20 wasn't even enough to cover the actual amount due (pre-tip)!

This was for the drink. Not the salad! Would have been excusable for the salad.

[Truenorth00]

Originally Posted by MolsonExport

This. It is crazy how expensive shitty fast food has become in recent years. Better to pare back on this crap and save the dollars for great tasting ethnic cuisine (at similar or even lower prices) or fine dining.

It's not just how much more expensive fast food is, it's how much better the alternatives are. Grocery stores are in the game now with ready to eat counters. None of this was really there when most of us were young. Why spend $80 at Swiss Chalet when you can have 80% of the taste for 40% of the price from Costco or Loblaws? The only penalty is that you have to do some dishes after.

[lio45]

Originally Posted by Truenorth00

This was for the drink. Not the salad! Would have been excusable for the salad.

Lol! That’s just crazy. (And I actually disagree about the salad: $20+ is “decent food” territory, that salad was very ordinary and not worth much more than the cheapest junk food.)

[Acajack]

Originally Posted by lio45

Lol! That’s just crazy. (And I actually disagree about the salad: $20+ is “decent food” territory, that salad was very ordinary and not worth much more than the cheapest junk food.)

My wife tends to make fairly elaborate meals even on weeknights so a couple of middling restaurant chains like L'Académie and Vieux-Duluth (and some local ones) come out pretty close to the cost of what we would eat at home with selections right around 20 bucks or less.

Especially since these are bring-your-own wine chains.

[P'tit Renard]

Originally Posted by whatnext

Apparently more than half of Canadian restaurants are losing money. On the other hand, when I was growing up i could count the number of times we went out to dinner in a year on one hand. MCDoanls was a big treat, not a "what's for dinner" moment. One of the fastest ways people could cut down on their monthly budget is eliminate dining out.

It is just a shame that the internet is killing street level retail at the same time. What reason will there actually be to go out and stroll Canada's high streets?

CBC had a similar written article, Restaurant industry facing bleak outlook, as costs mount even faster than skyrocketing prices
https://www.cbc.ca/news/business/restaurants-struggling-report-1.7016367

What caught my eye is that labour costs isn't really the big driver of increased costs, but rather it's the massive increase in rent. So Trudeau's TFW/international student ponzi scheme isn't really helping restaurants much, but could actually be making it worse by inflating the real estate bubble and pushing up rents. Another real time example of how the real estate bubble is cannibalising the real economy.

***

But as an entrepreneur about to celebrate her restaurant Tutti Matti's 21st year in operation in downtown Toronto, she says wage increases to attract and keep her staff are nowhere near her biggest problem.

Restaurant owner Alida Solomon works the till at her restaurant Tutti Matti in Toronto. Alida Solomon has run Tutti Matti, a restaurant in downtown Toronto for almost 21 years, and she says the situation for restaurateurs like her is dire right now.

Most restaurants are seeing rent increases of between 20 to 35 per cent in the downtown core right now, which is a major expense to have to swallow on top of everything else.

"Food inflation is over nine per cent," she said in an interview. "The cost of food plus rent, plus wage increases — which are totally valid, wage increases are normal in the face of inflation — but it's just the whole package."

[P'tit Renard]

Originally Posted by Acajack

Especially since these are bring-your-own wine chains.

It totally sucks that Apportez votre vin is only available in Quebec. Ontario rarely has BYOB, and they always charge outrageous corkage fees if they do. A glass of wine in Toronto these days is priced like a cocktail.

[thewave46]

Originally Posted by kool maudit

Damn. Overwrote my post.

Fortunately for everyone, writing's just a hobby for me. Not a profession.

Originally Posted by WhipperSnapper

One company towns ebb and flow with the economic performance of the company and, there's always a proportion of the population that lingers waiting for eventually death once that business has moved on.

Not much of a story here.

I was trying to pull at a deeper thread. Oh sure, one can distill cities and towns to population and economic statistics. Buildings are just steel and glass at the end of the day. Businesses are just profit-seeking legal creations.

It's the vibe I'm trying to catch. I've lived in one of those Northern small towns as an outsider; catching the vibe of long-term locals who've maybe seen the ups and downs, the businesses come and go, buildings abandoned and torn down. They had a sense of place beyond as an emotional attachment.

The Hoito was more than just another chain restaurant to residents of Thunder Bay. When it burned, a piece of Thunder Bay was lost. Will a new Olive Garden (if one ever opens in that city) evoke the same level of attachment? It certainly will make people happy, but will anyone ever get attached to it as a meaningful part of the community?

Does Singapore or Dubai evoke the same feel? Probably for some, but I've never been. What makes somewhere like New York, Paris, or London interesting is that they combine grand scale and elements of emotional attachment, in addition to the local stuff that makes neighbourhoods.

Chain restaurants and businesses just don't evoke that same vibe to me; even in the long-term they've an element of transientness to them. If the only Boston Pizza in town closes, one can go to the next town and get the same thing. I won't be able to get another loaf of Golden Grain rye bread after the 30th, no matter where I travel.

I suppose I was hoping for more personal recollections versus analytical ones; SHH kind of hit the mark (and he's right about it partially being an aging thing).