Feast or famine: The new reality of eating in Canada
In recent years, the way Canadians consume food has dramatically transformed. Data from Statistics Canada indicates that while food retail sales have been waning, food service sales have displayed remarkable resilience. Currently, the average Canadian spends approximately $246.19 per month on groceries, only slightly above the historical low of $241.19 recorded in May of this year. Despite these modest numbers, the broader narrative reveals a food retail sector that remains sluggish, with consumers increasingly opting for lower-priced alternatives such as discount brands and dollar stores. Concurrently, there has been a significant rise in food bank utilization, underscoring a shift in consumer behavior and highlighting economic strains.
This shift becomes even more pronounced against the backdrop of inflationary pressures that began in 2022. Contrary to the generally negative headlines, the restaurant industry has been reporting strong sales figures since mid-2021. Canadians now spend an average of $186.95 per month at restaurants, which includes expenditures on food delivery services but excludes venues primarily serving alcohol.
As of now, Canadians allocate 43% of their food budget to food services, up from 37% in 2019, the year before the pandemic. With a record high in restaurant spending of $188.41 noted in December 2023, we anticipate this record may be surpassed by the end of this year. Despite numerous closures in recent years, the restaurant sector seems to be adeptly adapting to a rapidly evolving marketplace.
According to Restaurants Canada, the nation boasts over 97,000 restaurants, employing approximately 1.2 million people—figures nearly mirroring those from 2019, before the pandemic. This equates to about 2.93 restaurants per 1,000 Canadians, a ratio that has remained relatively stable despite the challenges of the pandemic and subsequent lockdowns. Notably, British Columbia leads with the highest per capita ratio at 3.2 restaurants per 1,000 residents, while Ontario and Quebec are among the lowest with 2.9 and 2.8 respectively.
These data indicate a gradual shift towards a market increasingly oriented towards food services in Canada, a surprising development given the predominantly negative media coverage, including reports of tipping fatigue. However, the situation in Canada still markedly differs from that in the United States, where nearly 54% of the food budget is spent in restaurants, though Canada is slowly closing that gap.
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Travel is a significant driver of this trend; airports are bustling, and cruise ships traverse the globe. Interestingly, the shift to working from home does not appear to have dampened food service sales. In fact, more Canadians are opting to dine in more frequently, spurring a surge in demand for food delivery services.
Despite persistent media narratives forecasting the demise of the food service industry, the statistical evidence contradicts these claims. While inflation and demographic changes have forced consumers to curtail or adjust their grocery spending, many Canadians remain devoted to dining establishments, even as menu prices have outpaced food inflation at grocery stores for more than six months.
This scenario suggests that inflation impacts Canadians unevenly: while some barely feel the pinch, others are quietly struggling. Our growing population has not enriched us as a nation; rather, it has led to increased financial and economic fragmentation, with Canada’s GDP per capita reaching perilously low levels.
Food prices seem to be stabilizing, and most analysts predict that consumers will soon experience some relief. The extent to which food services will play a role in the lives of Canadians in the future remains to be seen. As we navigate these shifts, the landscape of food consumption in Canada continues to evolve dynamically.
