Canadian Operators Report Sluggish First Quarter

A soft economy, gas price increases and inclement weather clipped restaurant operator sales in Canada in the first quarter, according to the latest Canadian Restaurant & Foodservices Association Restaurant Outlook Survey. While the percentage of operators reporting improved same-store sales held steady at 33%, the percentage that said sales fell compared to the year earlier quarter rose to 36%, up from 31% in the fourth quarter last year.

But with winter now behind them, optimism about sales during the next six months is on the rise with 34% believing sales will improve, up from 24% in the fourth quarter and the percentage expecting worse sales fell two points to 19%.

“With the bad weather behind us, restaurant operators are feeling more positive about business in the coming months,” said Garth Whyte, CRFA president and CEO. “No doubt it was a challenging first quarter for many restaurateurs.”

Food costs, though moderating in Canada as well as the U.S., were cited by two-thirds of operators as the biggest negative factor affecting their business, followed by a weak economy at 51% and rising labor costs at 48%. Operators reported an average 2.2% increase in food costs for the past year, down from a 3.6% increase in the same period last year.

More information on the CRFA’s Restaurant Outlook Survey can be found at crfa.ca/research.

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