Canadians spending more at chain restaurants: report

When financial times are good, Canadians eat out, often dining amongst the romantic fluorescent lighting of chain restaurants.

In 2014, it was pre-oil crash Albertans who trumped the rest of their Canadians peers by spending $2,137 per capita, representing the largest commercial foodservice sales last year, according to GE Capital’s annual Canadian Chain Restaurant Industry Review.

“Usually, whatever economic area is doing well you see restaurants also doing the best,” James Rilett, vice president of Ontario for the Canadian Restaurant and Foodservices Association (CRFA) told Yahoo Canada Finance. “For now we are seeing positive growth and a lot of it is (attributed) to the lower dollar, which gives more household income and free money to spend.”

Overall, Canadians spent more than $57.5 billion at restaurants last year – which is about four per cent of the overall GDP. It’s also a 4.9 per cent increase on 2013. GE Capital expects that number to grow to $59.8 billion in 2015.

Ontario and Quebec devoured the biggest share, with commercial foodservice sales hitting $22.2 billion and $10.5 billion respectively, mostly as a result of their larger populations.

“The numbers that we’re seeing are reflective of last year so you’re looking at spending money and personal budget,” say Rilett adding that he suspects Albertans will be out-eaten by stronger performing peers in Ontario as the oil province falls on hard times. “I know there’s a little bit of pessimism out there and concern over the household debt levels – if that ever catches up to Canadians, we’ll probably grow less quickly.”

Canadians love their chain restaurants

The study also found that nearly two-thirds (63.2 per cent) of Canadians spend their dining-out money at chains, be it local or international ones. Atlantic Canadians proved they loved their chains, with 70 per cent of their restaurant spending sitting in that category last year. Quebec embraced their culinary roots with 44.6 per cent of their dining out taking place at independent restaurants.

“I think you’re seeing the chain restaurants are getting a larger share of the pie – independents aren’t growing as quickly,” says Rilett. But that doesn’t mean independents aren’t still popping up all the time.

Rilett points out that the restaurant industry has been on a tear since the recession, seeing consistent growth.

“An interesting sideline to the economic downturn is when people are laid off or looking for the next challenge they open restaurants,” he says. “You see a little bit of upturn in the independents but most of the growth is on the chain side – culturally it seems people are more comfortable going to chains.”

But that doesn’t mean chains don’t have to adapt.

“I think you’ll see some of those smaller chains continue to grow larger and you’ll see some of the existing chains get a refit or have a new face on them,” says Rilett. “I think you’ll continue to see people looking for ways to stand out from the crowd.”

One sector in particular where he sees growth is gourmet burgers and restaurant menus that put care into sourcing their ingredients. Some chains like Tim Horton’s, Starbucks and KFC have toyed with adding liquor to their menus.

“The local movement continues to grow it’s becoming a marketing benefit to show where your food comes form and what the source is,” he says. “That goes hand in hand with the craft beer market and local distillery market – people are using those as marketing tools right now.”