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They’re back! Food and drink sales surpass pre-COVID-19 pandemic levels in March, but challenges remain

July 18, 2022, 11:01 a.m. (EDT)

Following two long years of openings and closures during the various waves of the COVID-19 pandemic, food and drink sales finally surpassed pre-pandemic levels in March. While that’s good news for restaurateurs and foodies across Canada, challenges remain. Let’s take a closer look at the state of the food and drink industry two years into the pandemic.

Food and drink sales remain strong in April

Sales at food and drinking places remain strong, topping $6.9 billion in April (seasonally unadjusted).

Sales were up in all food and drink sectors in April, with full-service restaurants topping limited-service restaurant sales for the first time since February 2020.

Two years after the onset of the pandemic, unadjusted sales for April were up 59.5% compared with April 2021 and 13.7% compared with April 2019.

Almost half of businesses in accommodation and food services say they are worse off since the beginning of the pandemic

When we asked Canadian businesses about their outlook for the coming three months earlier this spring, those in the accommodation and food industry ranked among the most concerned.

In fact, almost half of the businesses in accommodation and food services (46.0%) told us they were worse off in the spring of 2022 than in 2019, by far the highest rate of any industry group in Canada. Nearly half (49.3%) expected profitability to decrease in the coming months.

Two-thirds of businesses in the accommodation and food industry are concerned about rising prices

Canadians were paying on average 6.8% more this April than they were in April 2021 on the necessities and pleasures of life, the largest increase in three decades. Higher food prices were a major contributor to the uptick in inflation in April. Canadians paid on average 10% or more year over year for fresh fruit, meat, bread, pasta, cereal products, and (gulp!) coffee.

Restauranteurs are also feeling the pinch of higher prices. When we asked earlier this spring, over half (54.0%) of the businesses in accommodation and food services told us they expected to raise their prices over the coming three months.

Canadians paid 6.6% more for a meal and 3.8% more for alcohol at a restaurant this April than in April 2021.

Labour crunch packs a punch

Restauranteurs are also facing the tightest labour market on record, with the unemployment rate standing at an all-time low of 5.1% in May 2022.

When we asked earlier this spring, one-quarter of businesses in accommodation and food services said they expected to have more vacant positions in the coming three months, nearly three times higher than the national average. Almost half said they expected difficulty finding skilled staff.

There were 108,790 job vacancies at food services and drinking places in the first quarter (not seasonally adjusted), down from 129,585 the previous quarter, but over double the number of vacancies in the first quarter of 2021 and at the start of the pandemic.

Three of the six occupations with the largest increases in job vacancies since the onset of the pandemic are in the food and drink industry. Businesses were looking to hire 60,955 food counter attendants and kitchen helpers in the first quarter, 18,965 food and beverage servers, and perhaps most importantly of all, 21,385 cooks.

Average hourly wages offered in the food and drink industry were up 75 cents from a year earlier to $15.65. New data suggest, however, that this was a full dollar less than the basic minimum prospective employees would accept to take on the job.

Canadians are returning to restaurants and food service establishments at pre-pandemic levels. The question remains, will there be enough staff to serve them?

To learn more about inflation and how it might affect you, check out the Eh Sayers Season 1 Bonus Episode: Why Should You Care About Inflation?

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