Licensed Restaurants in Raymond

Introduction: Growing the Local Economy

In 2019, the Town of Raymond adopted an economic development strategy that aims to expand, among other things, the number and types of restaurants in the community. The idea is that by doing so, Town residents will not only be able to enjoy a casual or fine dining experience in their own backyard, but also, will be encouraged to spend more of their disposable income in Raymond, in support of the local economy and local jobs, rather than in neighboring Lethbridge.

To advance this strategy, Town Council is considering adjusting the Town’s alcohol policy so that both current and future full-service restaurants can become a vibrant part of the Town’s commercial sector. More specifically, Council is considering amending Bylaw No. 987-11, theTown's Land Use Bylaw, to permit full-service restaurants to apply for and obtain "Class A - Minors Allowed" liquor licenses (licenses for establishments where "food is the primary source of business").

The Economic Realities of Full-Service Restaurants in Alberta

Full-service restaurants in Alberta operate on razor-thin profit margins. As the most recent data available from Statistics Canada shows, from 2013 to 2019 average operating profit margins at full-service restaurants in Alberta hovered around 4 percent:

Source: Statistics Canada. Table 21-10-0171-01 Food services and drinking places, summary statistics.

This means that for every dollar that full-service restaurants spend in Alberta, they on average make 4 cents in profit. That research has found that roughly 60 percent of full-service restaurants fail in the first three years of operation should therefore come as no surprise.

To maintain these razor-thin profit margins, full-service restaurants in Alberta have therefore come to heavily rely on selling alcoholic beverages to their patrons. Again, as the most recent data available from Statistics Canada shows, from 2013 to 2019 “sales of alcoholic beverages for immediate consumption on the premises” at full-service restaurants in Alberta accounted for, on average, 23 percent of total sales:

Source: Statistics Canada. Table 21-10-0213-01 Food services and drinking places, distribution of total sales

For the vast majority of full-service restaurants in Alberta, therefore, nearly one-quarter (1/4) of their gross revenue comes from the sale of alcohol. This helps to explain why the Government of Alberta amended the Gaming, Liquor and Cannabis Act (GLCA) to permit full-service restaurants to sell alcoholic beverages with take-out and delivery during the pandemic: by implementing health restrictions that prohibited in-person dining, the Government of Alberta in effect implemented a policy that, overnight, eliminated approximately 23 percent of total sales at full-service restaurants across the province.

Conclusion: Spurring Commercial Growth in Raymond

The key to expanding the number of full-service restaurants in Raymond, then, is creating a more hospitable environment for them to operate in – which is precisely why the Government of Alberta amended the GLCA during the pandemic, and why Council is considering amending the Town's Land Use Bylaw in the first place.

Except for special event licenses for private events on parcels of land that have no restrictive covenants, the Town maintains an absolute ban on alcohol sales to the public. Raymond therefore remains a predominantly "dry" community. Yet, if Raymond remains a predominantly "dry" community the likelihood of attracting family-oriented full-service restaurants (e.g. Boston Pizza, Moxie's, or Smitty's) will remain much lower given the importance of alcohol sales to their bottom lines.

Until the Town's Land Use Bylaw is amended to permit full-service restaurants to apply for "Class A - Minors Allowed" liquor licenses, future full-service restaurants are likely to remain few and far between, current full-service restaurants are likely to struggle, and Town residents are likely to continue spending a substantial portion of their disposable income in neighboring Lethbridge rather than in support of the local economy.