Foodservice Equipment Reports

Foodservice Growth Forecast To Slow In Canada

Despite falling oil and other commodities’ prices, the foodservice market in Canada continues to grow, though at a slower rate than this year, according to Restaurants Canada’s (RC’s) annual forecast, released Sept. 16. Restaurant sales are forecast to grow 3.8% in 2016 to C$62 billion, down from 4% in 2015 and 4.8% in 2014. When noncommercial foodservice and lodging are added, RC estimates the Canadian foodservice market at more than C$77 billion. Despite the slowdown, foodservice in Canada has posted growth for 25 consecutive years, including 2009.

The impact of the drop in oil prices can be seen in the simple fact that sales in Alberta, recently the province with the fastest growing foodservice sales, weren’t even mentioned in the RC release on the forecast. The provinces in which sales growth is exceeding the average are British Columbia and Manitoba, with sales projected to grow 4.3%. Eastern provinces continue to post the slowest foodservice growth, with growth in Newfoundland and Labrador expected to be only 1.8%.

RC President and CEO Donna Dooher noted that operators also are contending with rising food, beverage and labor costs squeezing profit margins. She said average pretax profit for restaurateurs is down to 4.2%, from 5.8% in 2001.

In spite of an economy in recession or near recession, many Canadian operators continue to report rising same-store sales. In the latest Restaurant Outlook Survey for the second quarter 2015, RC said 39% of those surveyed said same-store sales increased compared with the same quarter last year. And the gap between those who expect their sales to increase during the next six months vs. those expecting a decline was a healthy 23 points.

Information on Restaurants Canada research can be found at restaurantscanada.com.

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