Weather-Battered Canadian Operators Saw Sales Soften In 4Q 2013

Tough weather—especially in populous Ontario—and rising labor and food costs have restaurant operators in Canada feeling less optimistic about the sales outlook for the first half of 2014, according to the latest Restaurant Outlook Survey from the Canadian Restaurant and Foodservices Association. The percentage of operators reporting they expect sales to grow at a slower rate during the next six months surpassed those anticipating accelerating growth in sales for the first time since Q4/2011. The survey was released Jan. 28.

“Ice and snow are slowing business down, but they aren’t the only challenges facing the restaurant industry,” said CRFA Pres. and CEO Garth Whyte, in the press release accompanying the survey. “Operators are also struggling against the headwinds of an uncertain economy, rising costs and made-in-Canada challenges, such as beer and liquor monopolies and supply management in dairy and poultry.”

The inclement weather and drops in tourism were named by operators as factors in softening Q4 sales. The percentage of those surveyed reporting lower same-store sales surged to 37% from 28% in Q3, while those reporting increased sales fell from 40% to 33%.

The rising food and labor costs—a number of provinces have announced or enacted minimum-wage increases recently—brought a jump in the percentage of operators planning to raise menu prices to 44% from 33% in Q3.

The complete Restaurant Outlook Survey is available at the association’s website, crfa.ca/research.  “””