Canada’s food services industry is expected to turn a
profit of about $350 million in 2007, returning profits almost to 2005
levels, according to the Conference Board’s first Canadian Industrial
Outlook: Canada’s Food Services Industry – Winter 2007.
Canada’s food services industry is expected to turn a profit of about $350 million in 2007, returning profits almost to 2005 levels, according to the Conference Board’s first Canadian Industrial Outlook: Canada’s Food Services Industry – Winter 2007.
“Rising labour costs caused industry profits to fall last year, and the improved forecast in 2007 is due largely to food service operators passing costs onto consumers,” said director Louis Thériault. “For now, the costs associated with tight labour markets are outweighing the benefits of strong growth in both sales and prices.”
Weak spending by foreign tourists on food, due to a declining number of U.S. visitors, is also limiting the industry’s performance. This outlook is not expected to improve until after 2008 once travellers have adjusted to new passport rules.
Recently implemented public smoking bans in Ontario and Quebec have curtailed receipts for drinking establishments by six per cent through the first nine months of 2006 compared to the same period one year earlier. Losses in this segment did not hold back the industry as a whole, which recorded growth in receipts of 5.3 per cent over the same period. Since drinking establishments account for only seven per cent of food service receipts, the overall effect on the industry is small and can be considered a one-time shift in sales.
Canadian Industrial Outlook: Canada’s Food Services Industry is a new publication by the Conference Board. The Winter 2007 outlook is the first publication of the food services industry forecast.
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