Economic Slowdown To Curtail Foodservice Sales in 2023

According to Restaurants Canada’s latest forecast, annual commercial foodservice sales in Canada are forecast to decelerate to 6.5% nominal growth in 2023 to $88.3 billion. Once adjusted for anticipated menu inflation of 5.6%, 2023 real annual sales are expected to increase by just 0.8%. This compares to an 18.7% increase in real sales in 2022 that was fueled by the reopening of on-premise dining and pent-up consumer demand.

While real foodservice sales are expected to hold relatively steady in the first half of 2023, weaker economic growth is expected to curtail foodservice spending in the second half of 2023.  Real foodservice sales are forecast to fall by 2.7% in Q3 and by 3% in Q4 due to the anticipated economic slowdown and possible recession.

Although all segments will report higher foodservice sales in 2023 compared to 2022, this is due to higher menu inflation. Relative to 2019, real sales at quick-service restaurants will remain at 2019 levels. Meanwhile, real sales at full-service restaurants and drinking places will remain 6% and 21% below 2019 levels respectively.

As the downturn in the economy is expected to be short-lived, foodservice sales are forecast to recover in the first half of 2024.  As a result, commercial foodservice sales are forecast to grow to $92.2 billion in 2024, representing a 4.5% increase over 2023. Once adjusted for expected menu inflation of 3.0%, 2023 real sales are forecast to increase by 1.5%, on par with overall population growth.

Restaurant’s Canada’s latest Q1 2023 Quarterly Forecast is now available and contains a quarterly forecast of commercial foodservice sales in Canada, by segment, to 2024.

Click here to download your copy.

As the Chief Economist and Vice President, Research for Restaurants Canada, Chris Elliott manages and produces a comprehensive research program that has made Restaurants Canada a leading source of information for and about Canada’s $100-billion foodservice industry. Chris tracks and analyzes key industry and economic indicators and translates them into member reports and publications. He also provides research to support Restaurants Canada’s lobbying efforts on issues that affect foodservice operators – from payroll taxes to food costs.

Chris has worked with Restaurants Canada for over 20 years, has a Bachelor of Arts and Master Degree in Economics and specializes in economic modeling and forecasting.