The Canadian Foodservice Industry Continues Recovery in Q3 While Grappling with Higher Input Costs, Labour Shortage, and Inflation

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Canada's foodservice industry has shown promising recovery over the past year; however, growth slowed in the quarter ending September compared to a better-performing quarter last year, reports The NPD Group.

"Despite the current headwinds, the biggest news is that the foodservice recovery endures," says Sgabellone. "Canadian consumers are continuing to return to restaurants, helping to reduce the deficit of visits that have accumulated since the start of the pandemic."

Canada's foodservice industry has shown promising recovery over the past year; however, growth slowed in the quarter ending September compared to a better-performing quarter last year, reports The NPD Group*. Visits to Canadian restaurants and foodservice outlets were up 6% in the quarter compared to a year ago, when traffic was up 12%. Consumer spending was up 10% in the quarter ending September 2022 compared to a 20% increase in the same quarter last year.

"The closer we get to full recovery of the foodservice visits lost during the pandemic, the slower growth will be," says Vince Sgabellone, NPD foodservice industry analyst. "Additionally, the slower growth in the third quarter indicates the wave of pent-up demand for restaurants immediately after the lockdown may be colliding with the economic headwinds."

Traffic to quick service restaurants (QSRs), representing the bulk of all Canadian foodservice traffic, was up 6% in the quarter compared to last year. QSR consumer dollars grew by 9% compared to the same quarter a year ago. Looking at the year ending September 2022 performance for a longer trend view, all QSR dayparts grew traffic, led by morning meal and lunch. The morning meal, which includes breakfast and morning snack, increased visits by 13%, visits at lunch rose by 10%, supper traffic was up 9%, and P.M. snack visits were up 7% compared to the period a year ago. QSR customers' preference to dine in contributed to 82% growth in on-premises dining compared to a 2% decline in off-premises traffic compared to last year, according to NPD's daily tracking of the Canadian foodservice industry.

Full service restaurant (FSR) visits were up 10% in the quarter ending September compared to the same quarter a year ago. Consumer spending at FSRs grew by 13% in the quarter over last year. Like QSRs, all FSR dayparts, led by the morning meal, increased traffic in the year ending September 2022 compared to a year ago. FSR visits at morning meal rose by 56%, lunch traffic increased by 37%, supper grew by 26%, and P.M. snack by 34% in the twelve months ending September 2022 compared to a year ago. These significant traffic gains are versus declines in the year ending September 2021. On-premises dining at FSRs increased by 87%, and off-premises declined by 4% versus a year ago.

"Despite the current headwinds, the biggest news is that the foodservice recovery endures," says Sgabellone. "Canadian consumers are continuing to return to restaurants, helping to reduce the deficit of visits that have accumulated since the start of the pandemic."

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About The NPD Group
NPD is a global market information company offering data, industry expertise, and prescriptive analytics to help our clients understand today's retail landscape and prepare for the future. Over 2,000 companies worldwide rely on us to help them measure, predict, and improve performance across all channels, including brick-and-mortar, e-commerce, and B2B. We have services in 21 countries worldwide, with operations spanning the Americas, Europe, and APAC. Practice areas include apparel, appliances, automotive, beauty, books, B2B technology, consumer technology, e-commerce, fashion accessories, food consumption, foodservice, footwear, home, home improvement, juvenile products, media entertainment, mobile, office supplies, retail, sports, toys, and video games. For more information, visit npd.com. Follow us on Twitter: @npdgroup.

*The NPD Group recently merged with Information Resources, Inc. (IRI®) to create a leading global technology, analytics, and data provider.

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