By Chris Elliott, Senior Economist (Jan. 12/16) According to Restaurants Canada’s latest forecast, commercial foodservice sales are expected to slow to 3.8% growth in 2016, compared to 4.5% in 2015. This comes along with slower growth in disposable income, sluggish job creation, and record-high household debt. On a more positive note, commercial foodservice sales are expected to grow for the 25th consecutive year in 2016 – a testament to the importance of the restaurant industry in Canada.
Latest Economic Indicators – Canada
|Real GDP growth||1.2%||1.7%|
|Disposable income growth||3.5%||3.2%|
|Number of jobs created (all industries)||150,000||127,000|
Source: TD Economics
Despite some economic headwinds in 2015, restaurant sales are on track to post fairly healthy gains for the year. Based on the latest data from Statistics Canada, commercial foodservice sales in Canada rose by 4.3% in the first 10 months of 2015 over the same period in 2014. This is slightly below Restaurants Canada’s forecast of 4.5% growth in 2015.
If that growth rate continued to year-end, 2015 will have outperformed the average annual growth of 3.9% over the past 15 years. The increase in sales is even more impressive given that: Canada’s economy slipped into a recession in the first half of the year; the unemployment rate steadily increased; and consumer confidence stumbled.
Even factoring out menu inflation, real sales are on track to expand by 1.8% in 2015, higher than the 15-year average of 1.3% growth.
Growth was primarily led by Atlantic Canada, Ontario and British Columbia, which helped to offset weak spending in Quebec and Alberta.
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