Food services and drinking places in 2006

Statscan - Total operating revenue for the Canadian food services and drinking places industry reached $40.6 billion in 2006, up 4.5% from the previous year. This growth was slightly stronger than the 3.9% observed in 2005. A generally strong economy, with notable increases in personal disposable income and domestic tourism demand for food and beverage services, helped stimulate the growth of the industry in 2006.

Industry operating revenue increased in all provinces, but Alberta led the way with a robust growth rate of 11.0%. As in the previous year, the Western provinces continued to show strong growth in 2006 (7.5% combined), reflecting the overall economic performance of this region. Operating revenue also expanded in the four Atlantic provinces, which posted an overall growth rate of 5.3%. The industry in Quebec and Ontario observed more moderate increases than the other provinces, at 3.1% and 2.6%, respectively. Operating revenue remained relatively stable in the territories.

In the limited service sector, which is characterized predominantly by restaurants where meals are ordered and paid for at the counter, total operating revenue grew by 6.7%, the largest expansion of all four sectors of the industry. This was a marked improvement relative to its 3.3% growth in 2005. The special food services sector (comprising contractors, social caterers and mobile food services) posted a 6.2% increase in operating revenue. Full service restaurants (where patrons order and pay for meals at their table) saw moderate growth of 4.0%.

In sharp contrast, operating revenues for the drinking places sector decreased 6.2% in 2006. This marked the second consecutive year of shrinking revenues for this sector.

The industry continued to be dominated by the full service and limited service sectors, representing 44.3% and 40.4%, respectively, of total operating revenue.

Sales of food and non-alcoholic beverages accounted for 83.3% of the total sales of the industry, while sales of alcoholic beverages represented 14.3%. The major expense for owners in the industry was the cost of goods sold at 35.4%, followed by the cost of labour at 31.5%.

The operating profit margin for the industry edged up from 3.8% in 2005 to 4.3% in 2006. Increases were noted in most provinces and sectors of the industry.

Results from the 2006 Annual Survey of Food Services and Drinking Places are now available. These data provide information on the industry's operating revenue, operating expenses, salaries, wages and benefits and operating profit margin. Data for 2005 have been revised to reflect more accurate coverage of the target population for this industry.