By Chris Elliott, Senior Economist (June 24/15) It was only a matter of time. After many years of strong gains, foodservice sales moderated to 3.1% growth in March. Factoring in menu inflation of 2.8%, real sales were relatively flat. This performance was due to tepid sales in Alberta and Quebec, and a slowdown in demand in Ontario and British Columbia.
After leading sales growth in recent years, Alberta’s foodservice industry struggled with a 1.1% increase in total commercial sales in March. Although quick-service restaurants reported healthy gains (+6.6%), sales fell at caterers (-11.7%), full-service restaurants (-1.3%) and drinking places (-4.2%). Alberta will see the largest decline in real GDP in 2015 due to the drop in oil prices.
In Quebec, the restaurant industry continues to struggle because of a drop in independent traffic and units. Quebec’s sales slipped by 1% in March, making it the only province to see a decline compared to March 2014. Sales tumbled by 15.4% at drinking places and fell 4.2% at full-service restaurants.
Following several years of strong gains, total foodservice sales in Ontario slowed to 4.2% growth due to weaker demand at full-service restaurants and caterers. Sales at drinking places fell 8.9%. However, quick-service remains a bright spot as sales climbed a healthy 6.7%.
Foodservice sales in British Columbia moderated to a more sustainable 4.4% growth in March, after enjoying robust gains across all segments in March 2014. Sales weakened at caterers and drinking places, but continued to grow at a healthy pace at quick-service restaurants (+6.6%) and full-service restaurants (+4.4%).
New units bolstered total foodservice sales growth in Newfoundland and Labrador by 12.2% in March, following a 0.5% decline in March 2014. Even though its economy is struggling from the fall in oil prices, Newfoundland led the country in foodservice sales growth in the first three months of 2015.
After a challenging February, Prince Edward Island, Nova Scotia and New Brunswick reported stronger sales growth.
Manitoba and Saskatchewan
Healthy gains at caterers lifted total foodservice sales in Saskatchewan (+5.0%) and Manitoba (+4.3%).