Foodservice Equipment Reports

Canadian Operators Report Good First Quarter And Are Very Optimistic About Next Six Months

Canadian restaurant operators are very upbeat. For the second quarter in a row, they reported a strong up-to-down differential of same-store sales. And, in the first quarter 2015 Restaurant Outlook Survey released April 22, operators indicated the highest expectations for sales gains during the next six months since Restaurants Canada began the survey in the second quarter 2011.

Of Q1 same-store sales, 38% reported higher sales vs. the same quarter last year. In Q1 last year, operators were affected by terrible winter weather and reported the largest negative differential of those reporting declines to increases in the survey’s short history. That positive 38% number in Q1/2015 matches those reporting increases in the Q4/2014 survey. Those reporting a decline in same-store sales rose to 27% Q1 compared with a record low 23% Q4. The 27% is the second lowest reported declines in the survey’s history.

In explaining restaurateurs’ upbeat mood and high expectations for sales gains in the coming six months, the association’s Senior Economist Chris Elliott, who prepares the quarterly reports, wrote, “The combination of lower gasoline prices and a weaker Canadian dollar could boost restaurant sales and tourism over the summer months.” He also noted same-store sales were particularly strong in March, with 45% of operators reporting a gain during the month.

One negative in the report was a reported rise in food costs. The share of operators that reported food-cost increases in the quarter rose to 65% from 60%, reporting such gains Q4/2014. Those surveyed reported an average 12-month gain of 4.7% with increases impacting beef, pork, vegetables and fruits. This stands in contrast with food-price trends in the U.S. where wholesale food prices have plunged in recent months. For the 12 months ending in March, year-over-year prices actually declined in the U.S., according to the U.S. Bureau of Labor Statistics and the National Restaurant Association.

Restaurants Canada represents 30,000 commercial operators of all types. The full quarterly Restaurant Outlook Survey can be found at restaurantscanada.org.

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