TORONTO — Restaurants Canada’s Consumer Dining Index (CDI) recovered from May’s drop to 82.6, climbing up to 95.9 in June as Canadians returned to sourcing more meals from restaurants across all dayparts. Notably, 35 to 54-years-old Canadians reported the largest increase in restaurant visit frequency in June over May compared to other age groups. The improvement in the CDI aligns with an overall increase in consumer confidence, as reported by the Conference Board of Canada. However, on a year-over-year basis, the CDI remains slightly below 2023 levels at 95.9 in June 2024, compared to 96.4 in June 2023.
On the surface, it appeared the restaurant industry was on the rebound in May following a sluggish start to the year. After all, year-over-year commercial foodservice sales improved to 5.9-per-cent growth in May following a 3.4-per-cent increase in April.
However, most of the gains in May were the result of higher menu prices combined with above-average population growth. Factoring out menu inflation of 4.2 per cent, real commercial foodservice sales grew by a more modest 1.7 per cent compared to May 2023. But real sales are not keeping pace with population growth (up 3.4 per cent). As a result, the average Canadian spent 1.6-per-cent less at restaurants in May then they did last year, once adjusted for menu prices and population growth. This cutback in spending reflects the higher cost of living, weak consumer confidence and the financial strain of higher interest rates.
From this perspective — sales adjusted for menu inflation and population growth — the average Canadian cut back the most at drinking places (down 8.4 per cent) in May. This segment includes bars, taverns and nightclubs. Meanwhile, real per capita spending at full- and quick-service restaurants also fell in May, slipping by just over two per cent. Caterers were the only segment to report an increase, with per capita spending up 4.3 per cent.
With the exception of Newfoundland & Labrador, real per-capita spending fell across all provinces. Prince Edward Island reported the largest decline (down 4.3 per cent), reflecting a moderation in spending following several years of robust growth.
