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Cooling Economy and Rising Prices Result in Fewer Restaurant Visits in January

According to Restaurants Canada’s latest REACT Survey, the number of restaurant purchases made by Canadians continued to trend down in January 2023.

According to Restaurants Canada’s latest REACT Survey, the number of restaurant purchases made by Canadians continued to trend down in January 2023. Based on a monthly survey of 1500 Canadians, Restaurants Canada’s Consumer Dining Index is calculated as a weighted average of the number of times Canadians purchased a meal or snack from a restaurant in the past month, and then indexed to July 2022.

While some of the decline in the number of restaurant purchases in January is due to seasonal factors, a significant portion is also due to a decrease in consumer demand because of high inflation, rising interest rates, and a reduction in household wealth based on lower housing prices.

Chart 1

The decline in the Consumer Dining Index was due to a greater share of Canadians who ‘did not purchase’ a meal from a restaurant anytime in January. Overall, 60% of Canadians did not purchase breakfast in January 2023, up from 54% in December. Similarly, 40% did not purchase lunch from a restaurant anytime in January compared to 34% in December.

Meanwhile, the share of Canadians who purchased dinner from a restaurant once a week or more fell from 27% in December 2022 to 22% in January 2023. The decline in dinner purchases is evenly dispersed across lower- and higher-income households.

The Consumer Dining Index for 18 to 34 year old Canadians rose by two points in January compared to December. This was the result of an increase in the number of snacking purchases, which offset a slight decline in lunch and dinner visits.    

In contrast, the Consumer Dining Index fell by 9 points for 35 to 54 year olds and by 10 points for those 55 and older in January 2023 compared to December 2022. The index for both age groups is now at its lowest level since Restaurants Canada began the REACT survey in March 2022, and is a strong indication that the slowing economy and rising prices are impacting household discretionary spending at restaurants.

Chart 2

Looking ahead, this month’s REACT Survey points towards a further slowdown in restaurant purchases in February 2023. Compared to January 2023, 45% of Canadians said they expect to cut back on purchasing a meal or snack from a table-service restaurant, and 39% said they expect to make fewer purchases from a quick-service restaurant (QSR) in February 2023.

With economic activity in Canada expected to stall in mid-2023, now is the time for restaurant operators to implement cost controls and budget for a challenging economic climate. Visit Restaurants Canada’s Member Portal to learn about our cost savings programs, designed to help you save money. Also, stay tuned for the next edition of the REACT survey report in order to stay informed on the latest economic and consumer trends.

For the January 2023 REACT Survey, click here.

Chris Elliott

As the Chief Economist and Vice President, Research for Restaurants Canada, Chris Elliott manages and produces a comprehensive research program that has made Restaurants Canada a leading source of information for and about Canada’s $100-billion foodservice industry. Chris tracks and analyzes key industry and economic indicators and translates them into member reports and publications. He also provides research to support Restaurants Canada’s lobbying efforts on issues that affect foodservice operators – from payroll taxes to food costs.

Chris has worked with Restaurants Canada for over 20 years, has a Bachelor of Arts and Master Degree in Economics and specializes in economic modeling and forecasting.