The outlook for foodservice sales in 2020 and beyond

Published January 15, 2020

Despite a global economy mired by uncertainty, commercial foodservice sales in Canada are forecast to grow by a solid 4.0% to $77.5 billion. Including non-commercial foodservice, total foodservice sales in Canada are forecast to grow to a record $97 billion. In fact, foodservice sales are expected to surpass the $100-billion mark in 2021.

Although the industry will see its 29th consecutive year of nominal growth in 2020, the outlook for commercial foodservice sales this year is a downward revision from the previous year’s industry forecast which called for 4.5% growth. Economic uncertainty, lower consumer confidence, and high household debt have led to a notable slowdown in overall consumer spending, which will impact both foodservice and retail sales. On a positive note, Canada’s foodservice industry will benefit from an extra day in February due to the leap year.

While there is growing concern about an economic slowdown, none of the major banks are forecasting a recession. Overall, Canada’s economy is forecast to grow by 1.8% in 2020 and a further 1.9% in 2021.

While a recession cannot be entirely ruled out, the slowdown in consumer spending is already happening. Given that the foodservice industry averaged 5.6% nominal growth between 2014 and 2018, a slowdown in foodservice sales was inevitable. However, annual commercial foodservice sales in Canada rose by a weaker-than-expected 3.6% in 2019 – the slowest pace of growth since 2011.

The softening in foodservice sales was felt across all segments, with modest gains at full- and quick-service restaurants. Powerhouse provinces that were driving sales growth in recent years, such as Prince Edward Island, British Columbia and Quebec, all reported a sharp moderation in foodservice sales growth.

Looking ahead, commercial foodservice sales in Canada will advance by an average of 3.8% over the next four years.

Restaurants need to pay close attention to managing their expenses but also find new engines of growth to expand their revenues. Many restaurants are diversifying their menus to include more plant-based menu items, new appetizers and limited-time offers to bring in guests.

To find out what’s in store for Canada’s foodservice industry by segment and by province, download a copy of the 2019-2023 Restaurant Industry Forecast from Restaurants Canada’s member portal.

Kartikey Bhargava

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