Downtown restaurant owners skeptical that more civil servants will return to work in the core
Sarah MacFarlane, OBJ
April 30, 2024 4:15 PM ET
If a rumoured directive requiring federal civil servants to be in the office a minimum of three days a week comes to pass, it could be good news for downtown restaurant owners who have been scrambling to stay afloat in a downtown “ghost town.”
Many, though, remain skeptical.
Amir Rahim, owner of Grounded Kitchen, has been pivoting his business since the pandemic to accommodate the changes in Ottawa’s downtown. Grounded Kitchen on Gloucester Street was a pre-pandemic hotspot for both public- and private-sector workers in the core, but since COVID, Rahim says he has adapted, trying everything from lunch and dinner specials to new initiatives such as opening a second location on Carling Avenue that is driven by automation.
But with the news this week of a potentially stricter return-to-office mandate for civil servants, Rahim said his gut reaction is one of skepticism.
“A lot of mandates and requests have been echoed a lot over the past year. We’ve heard companies, including the feds, saying people will be back to work and haven’t seen a big difference,” Rahim told OBJ. “My gut reaction is that remote work has caused a difficulty and that this will be harder than we think. When it happens for real, I’ll know it’s working.”
Grounded on Gloucester has already seen an uptick in lunch traffic, but Rahim doesn’t attribute it entirely to the public service. Instead, most of Grounded’s customers are private-sector or Crown corporation employees, Rahim explained, as well as upper and middle management for the public service.
“I don’t know where they’re working, but they live downtown. They’re in suits, they didn’t wake up, put on a suit and come here for lunch. But all I know is they’re working and we’re full for lunch most days,” he said.
Since bringing back lunch service, Rahim said Grounded Kitchen’s earnings are comparable to those in 2019 and on track to eclipse pre-pandemic numbers by the end of this year. If there is a ramped-up return to office for public servants, he said Grounded can rely on a more varied customer base and, in turn, revive services that have taken a back seat.
For example, before the pandemic, off-site catering was responsible for 40 per cent of Grounded’s sales, said Rahim. But with fewer corporate events, business lunches and in-person gatherings, catering has decreased. Takeout service has also gone down.
“So far, we’ve been able to mitigate that with increased sales. Our numbers are the same, but it’s all in-store dining — a loonie or four quarters is still a dollar — but this could diversify that a bit,” said Rahim. “I love serving customers in the restaurant, I wouldn’t be here if I didn’t love it.
“But this could bring more density in the restaurant on more consistent dates, increased takeout, more catering and we could still have night business,” he added. “I can even bring back more happy hours, hopefully, for those after-work drinks.”
In the ByWard Market at The Grand Pizzeria, co-owner David Mangano says “the more people downtown, the better,” and he’s preparing for a boom in business in the next few months, though not because of federal workers.
Given his restaurant’s location, he hasn’t missed the public servants as much — indeed, in some ways, their absence from the downtown core has even been better for his business, he said.
Aside from the nearby offices of the Department of National Defence and the Canadian Revenue Agency, the ByWard Market is not positioned near major government buildings, and so Mangano said The Grand does not rely on public servants.
During the summer, The Grand is supported by tourists visiting its patio and locals who come to spend a day in the Market.
“We don’t feel the pinch of people working from home as much as someone who owns a business on Sparks Street, for example, where there are a lot of people going through a hard time with so many empty government buildings,” said Mangano. “Business will improve for the summer, but that’s because of tourism.”
Since the public service has been working hybrid, Mangano said The Grand has actually seen an increase in parties of between 10 and 20 people for work-related gatherings during Market Hour, The Grand’s version of happy hour.
“They book a lunch or dinner as a face-to-face meeting and get-together to see each other in person and that increased with them working remotely post-COVID.”
Mangano said that, with the money saved by working from home, he sees remote employees more willing to dine out.
“We don’t cater to lots of offices and people who work from home have more disposable income because they’re not paying for clothes, commuting, parking, gas … So there’s a bit more disposable income and we see people come in more,” he explained. “For us, specifically, it works out to be a bit better in some ways.”
That said, Mangano says there are pros and cons to the situation and adds it’s important for the downtown core to be busy and thriving. He hopes lunch service and after-work drinks might increase at his business with a stricter return-to-office mandate — that is, he said, if it happens.
“I’m hearing they’re just not going to show up, so I’m skeptical. We say they’re going back to the office, but are they really?” he laughed. “That’s the question.”
Anish Mehra, owner of the East India Company on Somerset Street West, said he is looking forward to an increased return-to-office for the public service. He just hopes this one will stick.
“When the initial mandate happened last year, we noticed an increase in business, especially on Tuesday, Wednesday and Thursday, because that’s when they were coming in, so we saw rushes,” explained Mehra. “But it didn’t feel like a full return because everyone had different days in the office and, since then, I think a lot of the offices have become lenient and we’ve seen a decrease, particularly at lunch.
“It seems optional, so I imagine people aren’t in office as much and we’ve seen a decrease there,” he continued. “With this new one, if it is enforced and becomes habit, there will be more plans for lunches and going out and then we’ll see the full effect.”
While Mehra said he understands the argument in favour of remote work, he hopes the desire for more social engagement will outweigh it — especially as he looks toward the revitalization of the downtown core.
“Having a vibrant and active social scene in the core takes many parts and part of that is having people in the core. Part of the business plan and expectation when you open up a business in the core is that you assume the public servants will be there,” he explained. “I know there’s been pushback, but it’s a bit of a social agreement: we will provide services and they’ll be there to take part, and the federal government has always been a big part of that.”
Since the pandemic, Mehra said the East India Company has largely recovered in sales and managed to increase the regular dinner crowd. Despite that, when he takes into account increased costs of food and labour, Mehra said federal workers in office three days per week could be the boost he needs.
“We have rebuilt our dinner and group business and our events, but the part that’s weakest is the lunch crowd,” said Mehra. “If the mandate is enforced and if people are eager to go out and support businesses, that would mean a lot to us as downtown businesses.”
As an advocate for downtown revitalization, Mehra said that having more federal workers return more often to the office is an important piece of the puzzle.
“You can’t have revitalization without people,” said Mehra. “People need that social engagement, our city needs it, and some of it takes place in the office, but it also takes place at lunch, and on the street, and in the city.
“If you create a doughnut in Ottawa, a circle of activity with a core that’s dead, you scare away tourists and visitors too and it impacts everyone,” he continued. “We need to keep people in the core so that places are open, windows aren’t boarded up, and it can thrive. Downtown needs it, and our city needs it.”
https://obj.ca/downtown-skeptical-th...s-return-core/
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