Sales Rebound For Canadian Restaurateurs, But Costs Bite

Following a weather-related slowdown in the first quarter 2014, same-store sales at Canadian restaurants improved dramatically in the second quarter, according to the latest Restaurant Outlook Survey from Restaurants Canada, the Canadian foodservice association. But rising costs for food, labor and credit-card processing also are biting into operator margins. Additionally, respondents cite a lack of skilled labor as a problem.

Of those surveyed, 40% reported an increase in same-store sales vs. the second quarter in 2013, while 32% said sales were stable. Only 28% reported a decline in sales during the quarter, down from 38% in the first quarter. This is in marked contrast to the first quarter this year, when inclement winter weather pushed the percentage of those reporting higher sales down to 30%. The association said the percentage of operators reporting higher sales hit a record 45% in the month of June.

And operators surveyed remain optimistic about sales during the next six months; 37% expect higher sales while the percentage fearing sales declines plummeted to 14%. But rising costs, especially for food and labor, were noted as challenges by 70% and 68%, respectively, of the surveyed.

“The good news is that business is growing and restaurant operators want to add more jobs,” says Garth Whyte, president and CEO of Restaurants Canada. “The bad news is, their operating costs are growing at an even faster pace. This, combined with labor shortages in some regions, creates a very challenging business environment.”

The complete Restaurants Canada Restaurant Outlook Survey is available at restaurantscanada.org. “””