Commercial foodservice sales in Canada are projected to grow by a solid 4.9% in 2017 according to Restaurants Canada’s latest Restaurant Industry Forecast. This follows a robust 6.2% increase in 2016. Due to stronger-than-expected consumer spending, the outlook for 2017 is more optimistic than expected. Last year at this time, Restaurants Canada was calling for foodservice sales to expand by 4.0% in 2017.
Total commercial foodservice spending will climb to a record $68 billion in 2017 due to healthy consumer confidence, rising employment and increased tourism spending. Combined with the non-commercial foodservice industry, total industry revenues will surpass the $84-billion mark.
With Canada’s economy posting the strongest growth of the G7 countries, consumer spending remains strong at restaurants. Due to robust demand in British Columbia, Ontario and Quebec, full-service restaurants will lead all segments with a 5.5% increase in sales in 2017. Sales at quick-service restaurants are projected to climb by 5.3% in 2017 following several years of robust gains.
With the collapse in commodity prices, growth in caterer revenues has weakened significantly. Revenues are forecast to rise by a lacklustre 2.1% in 2017, following a 2.3% increase in 2016. This is a sharp slowdown from the average of 6.3% annual gains between 2010 and 2014.
In 2016, drinking places posted their strongest growth since 2001. The rebound was short- lived, however, as sales are forecast to slip by 0.9% in 2017.
Looking ahead to next year, commercial foodservice sales will grow by 4.3% in 2018. This is a pace that is more in line with long run average growth. Although continued strength in the economy and high consumer confidence will keep consumers spending, high household debt levels will lead to a moderation in foodservice sales.
Elevated housing prices and healthy economic activity will boost foodservice sales in British Columbia and Ontario in 2017 and 2018.
With the lowest unemployment rate in a generation, strong consumer demand will support healthy foodservice sales growth in Quebec over the next two years.
Manitoba will boast one of the fastest-growing economies over the next few years, which will lead to solid foodservice sales growth.
An aging population and slower economic activity will lead to modest foodservice sales growth in Atlantic Canada over the long term.
A new 6% meal tax in Saskatchewan that was implemented in April will restrain foodservice sales in 2017. Sales are forecast to improve in 2018 due to stronger economic growth.
Following two years of weak gains due to the recession, Alberta’s foodservice industry will grow by a modest 2.9% in 2017. Improved economic growth, however, will lead to stronger sales in the long term.
Restaurants Canada uses an econometric model to forecast foodservice sales. The forecast is based on projections of real GDP, employment, consumer spending and tourism. The model explains 99% of the historical variation in foodservice sales.
The 2017-2021 Restaurant Industry Forecast includes sales projections by commercial foodservice segment (full-service restaurants, quick-service restaurants, caterers and drinking places) at the national level, along with total sales and menu inflation forecasts at the provincial level. To get a copy of the 2017-2021 Restaurant Industry Forecast, you can download a copy here (for members only).