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Why are so many pubs and restaurants closing down?

It’s disappointing to lose your beloved pub, but closures make space for new openings with few downsides to the consumer, says North Vancouver expert
Owner Ron Slinger announced in May that the Black Bear Pub in Lynn Valley will be closing later in 2023 after 26 years. | Paul McGrath / North Shore News

It’s not easy saying goodbye to the pub of your life.

Maybe they served your favourite sandwich, made with fresh bread and Dijon mustard with just the right kick. Or maybe they poured the perfect pint, handing it to you across the bar with a warm look.

But no love lasts forever in this world, in this economy.

Over the past year, North Shore residents have seen a spate of shuttering in the food and beverage space. Battling a pandemic hangover, skyrocketing rents and staffing shortages have made the industry increasingly competitive.

And as leases end, many operators are confronted with high debt loads and burnout from months or years or decades of long hours in high-stress work environments.

On the sunny side, closings of old favourites make space for potential new ones, and insatiable consumers are always chomping at the bit for the next best bistro.

The big trend at the moment is people are still going out and spending money, says Ian Tostenson, president and CEO of the BC Restaurant and Food Services Association.

“That pent up demand is certainly still there,” he said. “Even in even in spite of inflation and interest rates, people still have his yearning desire to go out.”

Spending habits may have changed but the restaurant industry is still busy, he added.

Tostenson lives in Lynn Valley, where the Black Bear Neighbourhood Pub recently announced that it would be closing after 26 years, related to its lease ending and new development at the location. Deep Cove’s iconic The Raven Pub closed last year – which has been replaced by an Irish bar under the same name – Toby’s Social Pub in Lynn Creek closed for good June 30 because a new lease couldn’t be reached with the property owners. Green Leaf Brewing in Lonsdale Quay and Deep Cove Brewers and Distillers have also closed due to disagreements over lease renewals.

Pubs have especially been hit hard in recent years, Tostenson said.

“If you have a pub that has more of an orientation towards drinking, they’re suffering because people are going for the whole experience, not just to drink,” he said.

That’s compounded by challenges facing the entire food and beverage space.

“You’ve got rising costs, i.e., in this case, rising leases and rents, and the entire industry has got a substantial labor shortage,” Tostenson continued. “So you’re seeing a lot of businesses, in this case, pubs and bars, that have come to the end of their lease, that aren’t renewing because the business is very difficult to maneuver given all the different factors that are going on.”

Smaller operators in particular took on a lot of debt during the pandemic. “Closures are worse right now just because of all that burden,” he said. Burnout is more of an issue in smaller establishments too, as some owners run kitchens and serve tables seven days a week.

On the restaurant side, North Vancouverites have lost Lonsdale Quay staple Cheshire Cheese, trendy newcomer Winston and High Boat Café in Mosquito Creek.

Favourite pub closing is disappointing, but no real downside to consumers

While it’s disappointing to lose your favourite spot, people are also quick to get out and find new options. And empty spaces are opportunities for fresh tenants.

“New businesses are coming in, and they’re probably getting some pretty attractive lease rates by the landlords to attract a new tenant,” Tostenson said. “It’s the regeneration of the industry – we lose some, we gain some. And what you gain is new ideas and new innovations, so that just keeps everything fresh.”

And other than some nostalgic pangs, business turnover doesn’t have other downsides for the consumer.

“The pricing is always dictated by the market,” Tostenson said. “You don’t get a new guy coming and going, ‘I need to succeed now, so I’m putting my prices up’ – that would have already happened naturally with inflation.”

Conversely, a newer operator could have more flexibility in terms of pricing and services, that could be more economic. “It just depends on how that owner views the marketplace,” he said.

Location and clustering with other destination establishments is key to success in the industry, Tostenson noted. Lower Lonsdale stands out as a premier hub on the North Shore, with clustering also happening in West Vancouver’s Ambleside area.

Overall, what’s going on with the local food and beverage industry is really healthy, Tostenson said.

“People are supporting restaurants in spite of the economy,” he added. “I think we need to be a little understanding of the industry right now. You might see a few lineups and a few sections that are open, and you’re going, ‘What’s going on here?’ but that’s a result of labour shortage.”

“By and large, the industry and the public are doing a good job of creating quite a dynamic environment over here.”