By Chris Elliott, Senior Economist (Mar. 11/14) On the heels of a 5.1% increase in 2012, commercial foodservice sales advanced another 4.6% last year to a record $55 billion. Sales grew primarily due to rising disposable income (up 3.8%) and a greater number of independent restaurants.

Full-service restaurants fuel growth

Full-service restaurants led the charge, with a 5.3% jump in sales to match segment growth in 2012. Although quick-service restaurants saw a slight moderation in sales growth to 4.2% in 2013, they still make up the largest segment in the industry with $24.1 billion in annual sales.

Despite several years of strong gains, caterer sales continued to expand at a healthy pace of 4.7%. After four years of consecutive declines, drinking place sales turned a corner to rise 0.2%.

Newfoundland and Labrador on top

Provinces with the strongest economic activity in 2013 also reported the highest restaurant sales growth, with Newfoundland and Labrador leading the way with a 9.3% jump in sales. Rising disposable income and healthy economic growth lifted restaurant spending in Saskatchewan and Alberta by 7.2% and 6.2%, respectively.

As British Columbia said goodbye to the PST on meals, restaurant sales rebounded with a 5.9% increase in 2013. Sales in the province fell by 2.3% in 2011 with the introduction of the HST, and rose by a sluggish 2.0% in 2012. (The tax was in effect from July 1, 2010 to April 1, 2013.)

Ontario is home to the largest restaurant industry in the country, with $21 billion in annual sales. Solid gains across all segments pushed sales up by 4.3% in the province. In contrast, Quebec saw weaker sales growth of 2.7% due to lower spending at full-service restaurants and drinking places.

Poor economic activity and sluggish job growth restrained foodservice sales growth to 0.9% in Nova Scotia and 0.4% in New Brunswick.

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See also:
•  Restaurant industry is third largest job creator in 2013
•  Consumer confidence hits deep freeze in December
•  What’s on tap for 2014: The economic outlook

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