Restaurant sales show signs of a rebound

By Chris McGregor

OTTAWA—Saskatchewan leads the country when it comes to sales at restaurants and bars.

A recent Statistics Canada report shows that sales in the province increased 1.4 per cent in June 2010, compared to the performance in May. That represents sales of more than $120 million, up from the $115.5 million spent in 2009. Six of the 10 provinces saw increases.

Among western provinces, Alberta is next, with a 0.7 per cent jump in June, compared to May, with $573.5 million in sales. In June 2009, cash registers rang up $552.6 million in bar and restaurant sales.

Ontario sales showed a 1.1 per cent growth in June on sales of $1.57 billion.
Nationally, sales increased just 0.3 per cent from May to June, for total sales of just over $4.1 billion. Over the same time in 2009, sales came in at $3.979 billion.

Overall sales increased 0.7 per cent at limited service restaurants and 1.5 per cent in drinking establishments. Full-service restaurants were the only sector that declined, dropping 0.7 per cent.

“In June, three of the industry’s four sectors posted higher sales,” the report states.

“The largest increase occurred in the special food services sector, (a 2.3 per cent jump) which includes food service contractors, caterers and mobile food services.”

The Conference Board of Canada came out with its own report on the foodservice industry for Summer 2010. It says strong employment numbers have helped out restaurants, while food prices have dropped due to a lower demand for products.

“The effects of the recession on the foodservices industry are now fading. With exceptional employment growth since the beginning of the year, domestic demand for restaurants has picked up and price increases are healthy,” the report reads.

Profit margin for 2010 is forecast at 2.5 per cent, an increase from 2.1 per cent last year, returning margins to nearly where they stood in 2008.

“As demand was shrinking, the industry reduced its workforce by about 2.8 per cent last year, while the average number of hours worked declined from 22.5 to 22.2 hours a week,” the report states.

“Even with these changes, labour costs increased by 1.6 per cent over the year, essentially because the average wage rate increased by 3.2 per cent.”

The Conference Board says limited service restaurants “performed reasonably well” as the rest of the industry struggled to make it through.

“As the economic recovery progresses and the unemployment rate drops, the full-service segment of the industry should benefit more,” the report states.

“As a result, industry profitability will improve this year and next, with profits returning to their pre-recession levels by the end of 2011.

Manitoba posted a slight 0.3 per cent increase in sales from May to June, while British Columbia’s sales dropped by the same amount, according to Statistics Canada’s numbers.

Newfoundland and Labrador also shows signs of a comeback, as sales there jumped 1.3 per cent in June to lead all of Eastern Canada. Nova Scotia is next with a 1.2 per cent increase. Sales in New Brunswick fell 0.2 per cent, while Prince Edward Island’s sales were flat.

In Vancouver and Whistler, the 2010 Winter Olympics played a huge role in boosting the spirits of bar and restaurant owners. Sales were up by 4.4 per cent in the first quarter of 2010, compared to just 0.9 per cent in the rest of Canada, according to the Conference Board of Canada.

“I didn’t know what busy was (until the Olympics),” said Melissa Craig, executive chef at the Bearfoot Bistro in Whistler. “It was 17 days straight with no break. I’m glad it was only 17 days.”

Business at the Bistro doubled during the Olympics, Craig said, and 50 staff worked the kitchen, up from the usual 30, and served breakfast, lunch and dinner. Bunk beds in the kitchen also gave staff a place to sleep when not working.