Total sales in the food services and drinking places subsector increased for the fifth consecutive month in August, rising 0.3 per cent to $8.1 billion, the highest level on record, according to a report released Wednesday by Statistics Canada.
Unadjusted prices for food purchased from restaurants were up 3.4 per cent in August compared with August 2023 and unadjusted prices for alcoholic beverages served in licensed establishments increased 2.1 per cent over the same period, said the federal agency.
“In dollar terms, the largest increase in August came from higher sales at limited-service eating places (+0.7 per cent), marking this industry’s fifth consecutive monthly increase. Full-service restaurants also posted higher receipts (+0.3 per cent) in August, rebounding from the decrease posted in July,” said Statistics Canada.
“Special food services posted a decrease of 1.5 per cent in August, the third consecutive monthly decline for this industry group. Lower receipts at drinking places (-0.2 per cent) were also seen in August.”
“I think one of the categories that has benefited the most from Canada’s explosive population growth is the food and beverage industry. That and the fact that in some parts of Canada we had a rainy July and some people wanted to take advantage of whatever hot weather was available in August to get out and grab a drink and a bite to eat,” said Bruce Winder, named to RETHINK Retail TOP Retail Experts List for 2024, author of RETAIL Before, During & After COVID-19 and President, Bruce Winder Retail.
“This doesn’t surprise at all. Spending is up across hospitality including tourism. There are more restaurant openings and Michelin stars than ever before and the reason for that is that Canadians are spending more at home instead of going across the border. The US political climate along with the cost of travel abroad is making Canadians think twice. Everything is more expensive including essentials, homes, fashion and travel. With the drop in interest rates, we will continue to see more spending locally,” said Liza Amlani, Principal and Founder, Retail Strategy Group.
“Canada’s food services and drinking places saw a robust seasonal upswing, with receipts increasing by 10.5 per cent from April to May, and continuing with steady month-to-month gains of 2.1 per cent in June, 1.6 per cent in July, and 1.3 per cent in August 2024. These percentage increases underscore the sector’s resilience as consumer demand held strong over the summer months,” said Dr. Sylvain Charlebois, Professor, Senior Director, Agri-Food Analytics Lab, Dalhousie University.
“Revenue is up month over month, although Statistics Canada admits that the industry doesn’t measure growth this way. It is usually on a year-over-year basis. It’s also important to point out that this industry is impacted by inflation as much as consumers face pressures on food prices. Overall, food inflation and menu inflation can be considered running parallel. The sector also faces rent, transportation, and wage inflation, which find their way onto menu prices,” said George Minakakis, Founder/CEO, Inception Retail Group.
“Menu prices and food inflation rose from nine per cent to 10 per cent in January 2023. Just because food inflation declined to 2.8 per cent in August 2024 doesn’t mean it costs less to supply a restaurant today than it did a year or two ago. The higher prices have remained in place. I believe these sales growth numbers are influenced by inflation. Therefore, the question only the industry can answer is how much this has impacted transaction and customer growth. Is it on a rebound, decline, or flat? Not all consumers have enough disposable income to dine out. My experience in this industry has been 20-60-20. Twenty per cent are struggling, sixty per cent are holding their own, and the other twenty per cent are experiencing growth.”Â
Sales up in eight provinces
In August, eight provinces saw increased sales. Quebec (+0.9 per cent) posted the largest gains in dollar terms, with higher sales posted in all industry groups, said Statistics Canada.
“Sales were also up in Ontario (+0.4 per cent), increasing for the fourth consecutive month, led by higher sales from limited-service eating places,” explained the federal agency.
“In August, the largest provincial decrease came from lower sales in British Columbia (-0.5 per cent), driven largely by lower sales in full-service restaurants. Sales in Alberta (-0.3 per cent) also fell in August, led by lower sales at drinking places.”
Further information is available in the “Food Services and Drinking Places Sales” dashboard, where users can consult data on sales in food services and drinking places for Canada and by province and territory.
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