Canadian Industrial Outlook: Food Services—Summer 2018

Document Highlights

This report examines the short-and medium-term economic and profitability outlook for Canada’s food services industry.

Losing Momentum—After six consecutive years outgrowing the overall economy, the food services industry has begun to lose steam. This year, it is projected to expand by only 0.9 per cent as high consumer debt levels, rising interest rates, weaker job gains, and a cooling housing market weaken consumers’ ability to spend.

Impending Demographic Headwinds—The pickup in baby-boomer retirements is contributing to Canada’s impending slowdown in consumer spending. Food services operators in Atlantic Canada will be most challenged by population aging.

Adapting to a New Normal—The combination of slowing revenue growth and mounting cost pressures is making it increasingly difficult for traditional brick-and-mortar restaurants to remain profitable. In this environment, new business models (e.g., ghost kitchens) are emerging and offer a glimpse into how the industry is adapting to its current challenges.