Alberta’s restaurants are struggling for air amid rising labour costs

Published October 1, 2018

Today’s unprecedented increase of Alberta’s minimum wage to $15 represents an escalation of nearly 50 per cent (63 per cent for liquor servers) over the past four years. This steep increase to labour costs is placing insurmountable pressure on many of the province’s foodservice operators, according to Restaurants Canada, the largest association representing foodservice and hospitality businesses across the country.

Steady increases to the minimum wage since 2015 have already contributed to the following setbacks for Alberta’s foodservice sector:

  • The number of workers employed in the foodservice and accommodation sector has dropped by 13,300 since a peak of 159,600 in February 2015 to 146,300 today.
  • Foodservice workers experienced a 5.1 per cent decrease in their average weekly hours between 2015 and 2018.
  • The average number of workers per unit dropped from 13 to 11.7 between 2015 and 2018.
  • Adjusted for menu inflation of 3.3 per cent, real foodservice sales from January to July 2018 were 1.6 per cent lower than during the same period in 2017.
  • Foodservice operators have been struggling more and more each year; from 2015 to 2018, there was a 9.1 per cent decline in the average inflation-adjusted sales per unit.

“People are pointing to restaurant sales going up and up and saying the industry is doing great. But really, that’s just menu inflation, and consumers are paying the difference,” said Mark von Schellwitz, Restaurants Canada Vice President, Western Canada. “In reality, many operators are taking losses while figuring out how to adjust their budgets — and with this latest labour cost increase, they’ll have nothing left to cut. They’ve had no chance to come up for air. How long can they keep holding their breath?”

Restaurants Canada is once again urging the Alberta government to reintroduce the liquor server wage, and to introduce a youth wage at $13.60.

About Restaurants Canada

Restaurants Canada (formerly CRFA) is a growing community of more than 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant community. Canada’s restaurant industry is an $85 billion industry, directly employs 1.2 million Canadians, is the number one source of first jobs and serves 22 million customers every day.

Marlee Wasser

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