(July 20/18) Restaurants Canada just released its Quarterly Forecast of foodservice sales for the remainder of 2018 and for 2019.

Overall, commercial foodservice sales are forecast to grow by 4.8% to a record $71.8 billion in 2018. While this would typically represent a healthy increase in revenues, most of the gains are the result of higher menu prices. Factoring out menu inflation, real sales will grow by a tepid 0.4%. This is the weakest increase since 2011.

One of the biggest stories so far this year is the sharp increase in menu prices. In Ontario, menu prices soared by 7.0% as a result of Bill 148. In addition, several other provinces are reporting menu inflation above 3.0%, due to higher operating expenses.

In 2019, slower disposable income growth, higher interest rates and high household debt will restrain commercial foodservice sales growth to 4.4%. Adjusted for inflation, real sales will grow by 1.2% — a pace that is on par with population growth.

There are a number of risks that could impact this outlook. Tense NAFTA negotiations, combined with the recently announced tariffs could hurt business investment and exports in Canada and lead to higher prices for consumers and operators. Continued housing market volatility would have a detrimental effect on consumer confidence and spending.

Restaurants Canada is monitoring all these changes and will produce an updated forecast if economic conditions suddenly change.

Members can click here to access our latest Quarterly Forecast and learn more.

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