Food services and drinking places, annual, 2018

Released: 2019-12-20

Firms in the food services and drinking places subsector generated $75.2 billion in operating revenue in 2018, up 4.9% from 2017. This increase was mainly driven by rising menu prices as the Consumer Price Index for food purchased from restaurants rose 4.2%, while prices for alcoholic beverages served in licensed establishments increased by 2.7%. This was the largest increase in menu prices since 1991, the year the goods and services tax was introduced.

Operating revenue was also buoyed by rising e-commerce sales, which rose 27.3% to $2.5 billion in 2018, as there was a rising number of businesses that adopted some form of technology for ordering online. The share of firms that reported e-commerce sales almost doubled from 12.0% in 2017 to 22.9% in 2018.

Operating expenses for the subsector rose to $72.0 billion in 2018, up 5.0% from 2017. One factor that contributed to cost pressures in 2018 was the rise in the minimum wage in 9 of the 10 provinces, with the most notable increases being in Ontario (+20.7%, from $11.60 to $14.00), British Columbia (+11.5%, from $11.35 to $12.65) and Alberta (+10.3%, from $13.60 to $15.00). Overall, salaries, wages, commissions and benefits advanced by 6.3% in 2018.

The largest operating expense for the food services and drinking places subsector was the cost of goods sold, which accounted for 36.0% of operating expenses in 2018. The next largest expense was salaries, wages, commissions and benefits, at 32.8%—a slight increase from the 32.4% recorded in 2017.

Among the provinces, for the second consecutive year, Prince Edward Island had the strongest operating revenue growth in 2018 (+6.2%). Newfoundland and Labrador businesses saw a 0.6% drop in operating revenue in 2018. This was the only province to experience a decline in operating revenue since 2011.

The four provinces with the largest shares of national operating revenue in 2018 were Ontario (39.3%), Quebec (19.4%), British Columbia (17.1%) and Alberta (12.9%).

Sales of food and non-alcoholic beverages accounted for 84.3% of the total sales in the subsector in 2018, followed by the sale of alcoholic beverages at 12.2%. The operating profit margin for the subsector declined slightly from 4.3% in 2017 to 4.2% in 2018.

Full-service restaurants contribute the most to growth

The food services and drinking places subsector is composed of four types of industries: full-service restaurants, limited-service eating places, special food services and drinking places. For the second year in a row, full-service restaurants were the fastest growing segment of the subsector, with operating revenue increasing 5.6% to $34.1 billion in 2018. This was the seventh year in a row that full-service restaurants experienced growth of 5.0% or more. Operating expenses in the industry grew by 5.8% to $32.9 billion, resulting in a 3.6% operating profit margin.

Limited-service eating places saw an increase of 4.7% in operating revenue to $32.0 billion in 2018. Operating expenses rose 4.5%, leading to an operating profit margin of 4.5%. At the provincial level, a gain in operating revenue was seen across all of the provinces in this segment for the sixth year in a row.

In the special food services industry group, operating revenue increased 5.1% from the previous year to $6.3 billion in 2018. Operating expenses in this group rose 5.5% to $5.9 billion, resulting in an operating profit margin of 6.3%.

Drinking places, which include bars and taverns, were the slowest growing segment of the subsector in terms of growth in operating revenue for the ninth consecutive year, up 0.6% to $2.8 billion in 2018. Operating expenses increased 1.0% to $2.7 billion, resulting in a 4.3% operating profit margin in 2018.

Full-service restaurants accounted for 45.4% of the subsector's sales, followed by limited-service eating places with 42.6% in 2018. Special food services, which include food service contractors, caterers and mobile food services, accounted for 8.3% of sales, with drinking places accounting for the remaining 3.7%.

Contact information

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