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Food services and drinking places, annual, 2015

Released: 2017-02-09

Firms in the food services and drinking places subsector generated $63.8 billion in operating revenue in 2015, up 4.6% from 2014.

The increase in 2015 was driven in part by menu inflation, with the Consumer Price Index reporting that the price of food purchased at restaurants rose by 2.8%, while the price of alcoholic beverages served in licensed establishments increased by 1.5%. Operating expenses for the subsector rose 4.5% from 2014 to $61.1 billion. The operating profit margin was 4.3%.

At the provincial level, businesses in Alberta experienced the slowest pace of growth, with their operating revenue increasing by 0.1% from 2014 to 2015. One factor underlying the slow sales growth in the subsector was the overall contraction of the Albertan economy, which began in the fall of 2014 with the collapse of the world price of crude petroleum. One consequence of the decline in prices was that employment in Alberta contracted by 1.0% during this period, which may have contributed to the lower demand for food services.

While Alberta reported the slowest increase in sales, it remained in the top four provinces in terms of the share of sales in the subsector. The four provinces with the largest shares of operating revenue were Ontario (38.3%), Quebec (19.1%), British Columbia (16.2%) and Alberta (14.5%).

Sales of food and non-alcoholic beverages accounted for 84.4% of the total sales of goods and services in the subsector in 2015, followed by sales of alcoholic beverages (12.7%).

Operating expenses for the food services and drinking places subsector were mostly composed of the costs of goods sold, which represented 36.4% of the total operating expenses of the subsector in 2015. The second biggest expense item was salaries, wages, commissions and benefits (32.2%), followed by rental and leasing (8.5%).

Restaurant sales driving growth

The food services and drinking places subsector is composed of three industry groups: full-service restaurants and limited service eating places; special food services; and drinking places. In 2015, the limited-service eating places industry led the subsector in terms of sales growth, up 6.0% from 2014 to $27.0 billion in sales. Operating expenses rose 6.4% to $25.8 billion, resulting in a profit margin of 4.7%.

Operating revenue in full-service restaurants increased 4.5% from 2014 to $28.3 billion. However, this was the lowest growth rate for full-service restaurants in three years. Operating expenses in this industry expanded by 4.1% to $27.5 billion in 2015, which led to a 3.1% profit margin.

In the special food services industry group, operating revenue increased 3.1% from the previous year to $5.7 billion in 2015. Alberta (-4.4%) was the lone province to post a decline in 2015. Operating expenses in the special food services industry group rose 1.9% to $5.2 billion, producing a profit margin of 8.5%.

The drinking places industry was the smallest component of the subsector in 2015, with operating revenue down 3.4% at $2.8 billion. This was consistent with declines over the previous three years, although it should be noted that many businesses in this industry have been reclassified as full-service restaurants as the sales of food and non-alcoholic beverages began to overtake sales of alcoholic beverages. Alberta once again posted the largest decrease in this industry, with operating revenues down 4.3%. Operating expenses for the drinking places industry declined 4.5% to $2.6 billion in 2015, resulting in a profit margin of 4.4%.

In 2015, full-service restaurants and limited-service eating places dominated the subsector, accounting for 44.4% and 42.4% of operating revenue for the subsector respectively. Special food services, which include food service contractors, caterers, and mobile food services, accounted for 8.9% of operating revenue for the subsector in 2015, while drinking places, which consist of bars and taverns, accounted for 4.3%.

  Note to readers

Data for 2014 have been revised.

Data on the contraction of employment in Alberta were obtained from the Survey of Employment, Payrolls, and Hours, CANSIM table 281-0024.

Contact information

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