Food services and drinking places

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The food services and drinking places industry edged ahead in 2005, as operating revenue reached $38.9 billion, up 4.0% from 2004. While the industry continued to advance, the pace of growth was more moderate than the revised 6.0% gain observed in 2004.

A generally strong economy, with notable increases in consumer spending and personal disposable income, helped stimulate the growth in 2005. While all regions experienced solid growth in 2004, stronger regional differences emerged in 2005.

The Prairie provinces and British Columbia led the way in 2005, with operating revenues increasing by 6.0% and 5.9% respectively. High commodity prices spurred economic expansion while at the same time attracting Canadians from other regions, increasing the demand for services. Although limited by weakness in the manufacturing sector, Quebec (+5.1%) achieved strong growth in food services and drinking places while growth in Ontario was only 2.2%. In Atlantic Canada, limited economic and population growth meant only a minor increase (+0.3%), while the territories experienced a decline (-4.4%). The majority of revenue in the industry was generated by sales of food and non-alcoholic beverages at 84% followed by sales of alcoholic beverages (14%).

Operating profit margins inched up to 3.8% in 2005 (up from 3.7% in 2004), as growth of operating revenue just outpaced that of operating expenses. The majority of expenses in the industry come from the cost of goods sold (37%) and labour costs (32%), with rental and leasing costs a distant third at 8%.

Buoyed by impressive results for food service contractors, the special food services segment of the industry (comprised of contractors, social caterers and mobile food services) showed the most growth in operating revenue in 2005, up 9.1% versus 2004. Full-service restaurants (+4.9%) and limited-service restaurants (+3.5%) experienced moderate growth, while drinking places contracted by 4.0%. Overall, the industry remains dominated by full-service and limited-service restaurants, which together account for 84% of operating revenues generated.

Results from the 2005 Annual Survey of Food Services and Drinking Places are now available. These data provide information on the industry's operating revenue, operating expenses, salaries and wages and operating margin. Data for 2004 have been revised to reflect more accurate coverage of the target population for this industry.

Available on CANSIM: table 355-0005.

Definitions, data sources and methods: survey number 4704.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Chris Maloney (613-951-0237; fax: 613-951-6696; chris.maloney@statcan.gc.ca) or Roland Boudreau (613-951-3145; roland.boudreau@statcan.gc.ca), Service Industries Division.