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Many of us have experienced going to a restaurant, only to see that it has been closed. In the food court below our building, there was a family-owned Italian restaurant that made everything on premise. They had been there for years, we became friends, and they were so kind.

This week, it was a shock to go downstairs to get my veal parmigiana sandwich and see that it was shuddered. The most jarring part was not even being able to say goodbye, and then thinking about what happened to them.

 

 

It’s a reminder of what presumably was the implications of the current economic environment.

 

No doubt “my favorite lunch place” simply couldn’t keep up with the rising costs. To be sure, these cost-structures have become a reality across many industries:

 

• Costs are going up everywhere - from food prices and rent to staff wages and insurance
• People are cutting back on dining out - with the cost of living getting higher, more people just aren’t eating out as much.
• The industry isn’t really growing - Restaurants Canada says sales are only expected to grow by 0.8% this year.
• Bankruptcies are on the rise - a record number of restaurants went bankrupt last year

From an investment perspective, this is why the tariffs, and where they actually end up, what deals are made, and how companies react, are going to be key considerations to monitor going forward.

 

Of course, these negotiations and considerations require the US to know who they will be negotiating with in Canada. This is an important election: Canada has already had record advance voting. The consensus seems to be that the Liberal party under Mark Carney will win, its only a question of if it’s a majority or not, if the polls are to be believed. My only prediction is that President Trump will be negotiating with a prime-minster from an Ottawa-riding…

 

Have a great weekend, and don’t forget to vote…