Commercial foodservice sales in Canada advanced by 6.4% in October compared to October 2022. Once adjusted for menu inflation of 5.7%, however, real sales slowed to a modest 0.7% increase.
October represents the slowest growth so far in 2023, and a sharp slowdown from the 2.1% average monthly real sales growth between July and September. After several months of solid gains early in the year, which raised hopes of renewed vigor in the restaurant industry, the October sales figures are the first sign that consumers are curtailing their discretionary spending as they feel the effects of slower economic growth.
The mediocre October results were due to waning demand at full-service restaurants and drinking places. Real sales at full-service restaurants fell by 1.3% in October, which followed already flat sales in August and September. Having enjoyed a rebound in demand earlier in the year, October represents the first decline in real sales for full-service restaurants in 2023. Drinking places fared the worst of any segment, as real sales tumbled by 6.1%, continuing a persistent sluggish performance. While quick-service restaurants also reported a moderation in spending, real sales rose by 1.8% in October.
Provincially, Alberta led the country with a 4.3% increase in real foodservice sales. Growth was propelled by an increase in population and solid economic activity. While real foodservice sales in Ontario rose by 1.1%, this was a noticeable slowdown from the 3.4% growth in September.
Meanwhile, real sales on Prince Edward Island fell by 3.5% in October, following robust gains in recent months. Despite the misstep in October, Prince Edward Island still led the country with a 7.6% real increase in sales in the first 10 months of 2023 over the same period in 2022.
As the Chief Economist and Vice President of 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 modelling and forecasting.