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Foodservice Industry Forecast 2019-2023

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Foodservice Industry Forecast 2019-2023 Foodservice Industry Forecast 2019-2023 restaurantscanada.org | Restaurants Canada MADE IN CANADA Garland Canada, a Welbilt Company, is the leading supplier of foodservice equipment in the Canadian market. Garland Canada is committed to delivering high quality, reliable, innovative solutions that address operator needs. A high focus is placed on delivering operational and energy efficiencies, labour savings, menu execution and service and support solutions. Garland Canada and the portfolio of Welbilt brands deliver unmatched value and peace of mind. WELBILT PROUDLY MANUFACTURES THE FOLLOWING BRANDS IN CANADA: Inspired by Chefs, Timeless Quality, Consistency you Engineered by Experts Tested for Life can Count on. *Including US Range & Sunfire ® VISIT US AT WWW.GARLANDCANADA.CA @THE_GARLAND_CANADA @GARLAND_CANADA FACEBOOK GARLAND CANADA - A WELBILT COMPANY A MESSAGE FROM OUR PRESIDENT & CHAIR Economic conditions may be unpredictable and and even your clientele. Take advantage of significant world events continually unfolding, but existing networks, whether that means partnering one thing remains certain: Canadians will always with local festivals or riding the wave of need good food and a welcoming place to eat. international championships. Or branch into new territory with delivery services or modern After nearly a decade of solid growth, we’re plant-based alternatives. When costs require seeing a moderation in economic activity. careful management, innovation is the best way It’s a natural process that will impact retail and to thrive. The inventions that arise in tough times foodservice sales alike. All of this happens when can become standard-bearers going forward. households are carrying a record $2.25 trillion in debt. When combined with the constant, rapid Amidst the upheaval, you can use this forecast fluctuations of the current political climate, the as a guide to navigating the unexpected. The results can be volatile. informed and expert analysis it contains can take the guesswork out of the near future and help There’s more economic uncertainty than ever, you take advantage of new connections. In 2021, creating a ripple effect across the entire world. foodservice sales are projected to climb above MADE IN CANADA Global real GDP in 2019 will see its weakest $100 billion; that’s a milestone worth reaching, Garland Canada, a Welbilt Company, is the leading supplier of foodservice equipment in the growth since the great recession in 2009. This and you’ll want to be a part of it. Canadian market. Garland Canada is committed to delivering high quality, reliable, innovative slowdown will have repercussions for Canada in terms of trade, business investment, and solutions that address operator needs. A high focus is placed on delivering operational and consumer confidence. Tourism, both local and energy efficiencies, labour savings, menu execution and service and support solutions. Garland international, will be affected too. All of that news is troubling, but it means there are opportunities Canada and the portfolio of Welbilt brands deliver unmatched value and peace of mind. out there for smart and savvy foodservice operators who are ready to seize the day. WELBILT PROUDLY MANUFACTURES THE In times of rapid change, foodservice operators Shanna Munro Brad Kramble must be fast and flexible to keep up. Obviously, President and CEO Chair of the Board FOLLOWING BRANDS IN CANADA: you don’t want to compromise on service Restaurants Canada Restaurants Canada or quality, but this is a prime opportunity to experiment. Diversify your menu, your format, Inspired by Chefs, Timeless Quality, Consistency you Engineered by Experts Tested for Life can Count on. *Including US Range & Sunfire ® VISIT US AT WWW.GARLANDCANADA.CA @THE_GARLAND_CANADA @GARLAND_CANADA FACEBOOK GARLAND CANADA - A WELBILT COMPANY restaurantscanada.org | Restaurants Canada Foodservice Industry Forecast 2019-2023 3 Executive In 2019, commercial foodservice sales are projected to grow by 3.6% Summary to a record $74.5 billion. Including non-commercial foodservice sales, Highlights: total foodservice industry sales will grow to $93 billion. +3.6% Despite record sales levels, the pace of growth has slowed following year-over-year sales growth of 5% Commercial foodservice sales or more between 2014 and 2018. While some of this in Canada are forecast to expand is due to inclement weather in the first half of 2019, by 3.6% in 2019. This figure reveals consumers are dialing back their spending due to lower a noticeable moderation in spending consumer confidence and strained household budgets. after achieving year-over-year sales As a result, 2019 will mark the slowest increase in growth of 5% or more between 2014 spending since 2011. and 2018. Menu prices are projected to increase by 2.6% in 2019, compared to a 4.2% increase in 2018. As a result, real Adjusted for menu inflation of 2.6%, foodservice sales are forecast to grow by 1.0% in 2019 real sales are projected to grow compared to a 0.8% increase in 2018. by 1.0% in 2019, following a 0.8% In 2020, commercial foodservice sales will grow by an increase in 2018. additional 4.0% to $77.5 billion. Despite a slowdown in job creation and disposable income growth, an extra day in February will help boost spending. In 2020, commercial foodservice sales will improve slightly with a 4.0% Given tighter household budgets, quick-service nominal increase. Alberta and Ontario restaurant sales are forecast to grow by an average will lead the way with 4.4% and 4.2% of 3.9% over the next five years compared to a 3.7% growth, respectively. increase at full-service restaurants. A rebound in economic fortunes in Alberta and Strained personal financial situations Saskatchewan will help boost caterer revenues by remain a significant challenge to an average of 3.8% per year over the next five years. consumer spending over the near term as high household debt and In contrast, drinking places will see the weakest gains lower disposable income restrain with average annual growth of just 1.6% between 2019 discretionary spending. and 2023 due to changing consumer behaviour and a decline in units. By 2021, combined commercial COMMERCIAL FOODSERVICE SALES IN CANADA and non-commercial foodservice YEAR-OVER-YEAR NOMINAL CHANGE sales are forecast to surpass the $100-billion mark. 2018 2019f 2020f 2021f 2022f 2023f Quick-service Restaurants 4.9% 3.7% 4.2% 4.0% 3.9% 3.8% Full-service Restaurants 5.4% 3.5% 4.0% 3.7% 3.6% 3.6% Caterers 5.5% 4.2% 3.9% 4.1% 3.8% 3.2% Drinking Places 2.6% 2.2% 2.3% 1.3% 1.1% 1.1% Total Sales 5.1% 3.6% 4.0% 3.8% 3.7% 3.6% 4 Foodservice Industry Forecast 2019-2023 restaurantscanada.org | Restaurants Canada Over the past two decades, food and beverage sales from traditional grocery stores and supermarkets and non-traditional retail stores (e.g. Walmart, Costco) posted the most substantial year-over-year sales growth rates in 2008 and 2009 – coinciding with the recession. While there are growing concerns that another recession will happen in the next few years, even without a recession, consumers are tightening their belts to rein in household debt. Overall, retail food store sales are forecast to grow by 3.8% in 2019 and 3.4% in 2020. Another recession, however, would lead to stronger-than-forecasted sales growth at retail food stores and erode the foodservice share of the total food dollar. We saw this precise scenario unfold during the last recession when the foodservice share of the total food dollar fell nearly two percentage points to 37%. In the long term, the need for convenient and portable food offerings from restaurants will boost foodservice sales. Provinces with the most vigorous economic growth or largest increases in population will boast the fastest-growing foodservice markets. In contrast, provinces with an aging population, or a population declining in number will fall behind the rest of the country in foodservice sales growth. 2019 Nominal Change in Annual Sales 2019-2023 Average Annual Nominal by Segment Change in Sales by Segment Caterers 4.2% Quick-service 3.9% Restaurants Quick-service 3.7% Restaurants Caterers 3.8% Total Sales 3.6% Total Sales 3.7% Full-service 3.5% Full-service Restaurants Restaurants 3.7% Drinking Places 2.2% Drinking Places 1.6% 2019 Nominal Change in Annual Sales 2019-2023 Average Annual Nominal by Province Change in Sales by Province PEI 9.5% PEI 5.0% NB 5.9% AB 4.1% QC 4.3% BC 4.0% BC 4.2% NB 3.8% MB 3.8% CA 3.7% NS 3.7% ON 3.7% CA 3.6% QC 3.7% NL 3.6% MB 3.6% ON 3.4% SK 3.5% AB 2.1% NS 3.5% SK 2.1% NL 2.2% Source: Restaurants Canada and Statistics Canada restaurantscanada.org | Restaurants Canada Foodservice Industry Forecast 2019-2023 5 The Economic Climate is Uncertain What a difference a few months can make. At the rates. Since 2000, the yield curve inverted two other start of 2019, there were growing concerns about times, each followed by a recession shortly after. a possible recession in the near future. Although those fears quickly subsided, the respite didn’t last Another closely watched indicator is the Institute of long. In recent months, rising global trade tensions Supply Management Purchasing Managers Index, have once again raised fears of a recession. Already, which fell to 47.8 in September. This result marks the economic uncertainty and tariffs have pushed lowest level for the Index since the great recession. the global manufacturing sector into a recession. Historically, a reading below 47 is a sign the U.S. Furthermore, the global economy is forecast to economy is in a recession.
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