The juxtaposition is telling.
On the ground floor of 910 Government St., brown paper covers the windows and hides workers putting the finishing touches on a new Burger King restaurant. On the second floor directly above, the lights are off for good at Ric’s Grill steak house.
This is the state of the restaurant industry in B.C., according to the experts.
“It’s happening across the industry,” said Don Monsour, past chairman of the Victoria branch of the B.C. Restaurant and Foodservices Association.
Monsour said the recession, harmonized sales tax and tougher drinking-and-driving laws has meant the higher end of the industry has suffered while quick-service and casual-dining restaurants have taken more market share.
“People are spending less time in high-end restaurants drinking and, with the economy right now, they are shopping down and that’s created a better market for casual dining and fast food,” Monsour said.
Hospitality industry consultant Frank Bourree agrees.
The principal of Chemistry Consulting said the industry simply hasn’t recovered from when the province introduced the harmonized sales tax in 2010 and then compounded the troubles with the new drinking-and-driving laws.
“The result was the industry [revenues] dropped provincewide 2.3 per cent in 2011 and was flat in 2012,” Bourree said. “With the recession, there was a lot of trading down and fast food has seen more growth.”
In Greater Victoria, that manifested itself in the growth of casual dining restaurants over the past several years, including an explosion of gourmet burger joints, expansion to new locations for restaurants like PIG BBQ Joint and new fast food offerings in the core like Fat Burger and Burger King.
At the same time, higher-end offerings like Pablo’s, Prime Steak House and Ric’s Grill have closed.
Bourree said there may yet be more casualties through the traditionally lean winter season as cash reserves start to dry up.
“Dinner is slowing down and that’s a reflection of total disposable income,” Bourree said. “People just don’t have the money to be dining out quite as much.”
And even when they do, they may be opting for more casual fare.
Bourree said recent statistics show the industry is expecting to see growth of five per cent in 2013, helped in part by the elimination of the HST and a return to the provincial sales tax.
But he’s quick to point out the money spent is moving around. “It’s not the same industry as it was even 10 years ago,” Bourree said.
He said the industry is seeing a trend to morning and afternoon snack times that are improving the bottom line of cafes, delis, breakfast joints and fast food outlets. “It’s showing a lot of growth, because it is a small indulgence,” Bourree said.
And while he doesn’t like seeing a fast food joint opening along Government Street just a stroll from a 7-Eleven store, he understands it. “For Burger King it’s fantastic ... they will do very well there,” he said, noting the tourist traffic that streams up the walk from the Inner Harbour.
Burger King could not be reached for comment Tuesday, but the restaurant at the corner of Government Street and Courtney Street is clearly close to opening as it is currently being painted and has already started the hiring process.
It will be the third Burger King in Greater Victoria after the second location opened downtown at the corner of Johnson and Douglas streets in 2011. The other location is on the Old Island Highway.
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