Second Quarter of 2012
Restaurant Sales
•
Despite recent sluggish economic growth and
lacklustre job creation, 35% of restaurant operators
posted higher year-over-year same-store sales
growth in Q2, 2012. This share is unchanged from
Q1 2012 as operators continued to benefit from
warm weather.
•
Another 34% of respondents said their same-store
sales were about the same as last year while 31%
of operators reported lower same-store sales.
•
A slightly greater share of quick-service restaurants
(39%) reported higher same-store sales in Q2
compared to table-service restaurants (35%) and
‘all other segments’ (33%).
•
Looking ahead, restaurant operators are relatively
optimistic about the next six months. The share of
restaurant operators that expect stronger same-store
sales growth compared to the previous six months rose
to 40% in Q2 compared to 38% in Q1 and 22% in Q4.
•
The share of respondents that expect sales to grow at a
slower pace over the next six months held steady at
20% in Q2. The remaining 40% of respondents expect
sales will grow at about the same rate.
•
Although operators are more upbeat in Q2, the level of
optimism steadily dropped between April and June.
The change in outlook may reflect seasonal trends in
the industry as sales are generally higher in the
summer months. It may also represent growing
concern about the global economy. Anaemic job
creation in the United States and the growing European
debt crisis have reduced consumer confidence in
Canada, which will likely lead to weaker spending at
restaurants in the near term.
•
Quick-service restaurants are the most optimistic as
51% of respondents expect their same-store sales
growth to accelerate over the next six months.
•
Thirty-nine percent of table-service restaurant
operators expect same-store sales to grow at a greater
rate over the next six months – unchanged from Q1.
Nearly 35% of operators reported higher same-store sales in the
second quarter of 2012.
Higher
About the same
Lower
34.9%
33.8%
31.2%
Q: In the second quarter of 2012, was your total sales volume
(on a same-store basis) higher, lower, or about the same versus
the same period one year ago?
Prepared by: Chris Elliott, Senior Economist
Date Prepared: July 16, 2012
CRFA’S Restaurant Outlook Survey for Q2 2012
The share of respondents that expect their same-store sales will
grow at a greater rate over the next six months rose in Q2.
Nearly 64% of respondents saw higher average food costs in Q2
of 2012 compared to 72% in Q2 of 2011.
50%
38%
40%
30%
30%
28%
Higher
40%
31%
About the same
20%
18%
19%
10%
22%
Q2 - 2011
Q3 - 2011
Q4 - 2011
19%
Lower
Q1 - 2012
Q: In the second quarter, were your average food costs higher,
lower or about the same as the second quarter of 2011?
Food Costs and Menu Prices
Sixty-four percent of respondents reported higher
food costs in Q2 compared to 72% in Q2, 2011.
•
Sixty-eight percent of table-service restaurant
operators reported higher food costs compared to
61% of quick-service restaurants.
•
A majority of operators (52%) plan to maintain their current
menu prices over the next six months.
Food costs continued to moderate in the second
quarter. The average operator saw a 2.6% year-overyear increase in food prices in Q2 compared to 3.6% in
Q1.
•
•
11.2%
Q2 - 2012
Q: Over the next six months, do you expect your total sales
volume (on a same-store basis) will grow at a greater, lesser, or
about the same rate as the previous six months?
•
25.3%
20%
Greater rate
Lesser rate
0%
•
63.6%
Higher
46.8%
Same
Lower
The above trends correspond to an overall moderation
in food prices according to Statistics Canada. The
year-over-year price of food from grocery stores
slowed to 2.5% in May 2012 due to lower prices for
fresh vegetables and a moderation in the price of
meat, rice and bread.
In Q2, a majority (52%) of operators said they will keep
their menu prices about the same over the next six
months. This is up from 41% in Q2, 2011.
In contrast, 47% of operators expect to raise their
menu prices over the next six months.
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51.7%
1.5%
Q: Over the next six months, do you expect your menu prices to
be higher, lower, or the same as the previous six months?
•
An equal share of table- and quick-service
restaurant operators plan to raise menu prices over
the next six months at 49%.
•
Independent restaurant operators are slightly more
likely to raise their menu prices over the next six
months (48%) compared to chains (43%).
CRFA’S Restaurant Outlook Survey for Q2 2012
Employment
•
Fully 87% of restaurant operators plan to keep their
employment level about the same or higher over the next six
months.
The share of restaurant operators expecting to add
jobs over the next six months rose to 29% in Q2
compared to 25% in Q1. The increase could be
partially seasonal, but may well reflect growing
optimism about sales.
•
Most restaurant operators (59%) expect to keep their
employment levels about the same over the next six
months.
•
Forty percent of chain restaurants anticipate their
employment levels will grow over the next six
months compared to 20% of independents.
Nevertheless, 62% of independent operators expect
to maintain their current employment levels.
Higher
28.6%
About the same
Lower
58.7%
12.6%
Q: Over the next six months, is your company's level of
employment expected to be higher, lower, or about the same as
the previous six months?
Factors Impacting Business
•
Although rising food prices remain the number
one concern for restaurant operators, the share has
steadily decreased to 70% of operators in Q2
compared to nearly 80% in Q2, 2011.
•
Six in 10 restaurant operators said that rising
labour cost had a negative impact on their
business. This is relatively unchanged from Q1.
•
•
•
The weak economy impacted nearly half (49%) of
operators. Despite growing concern about
slowing economic activity in the United States,
Europe and China, the level of concern about the
weak economy fell slightly from 52% in Q1 and
from 58% in Q4.
Rising gasoline prices had a negative impact on
43% of operators in April, but this share fell to 27%
of operators in June due to a moderation in
gasoline prices.
With consumer debt levels at record highs, the
share of operators blaming weak consumer
spending rose from 25% in Q1 to 28% in Q2.
Nearly 30% of table-service restaurant operators
said they were impacted by weak consumer
spending compared to 20% of quick-service
restaurants.
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•
One-third of table-service restaurant operators
experienced a shortage of skilled labour in Q2
compared to 10% of quick-service restaurant
operators. One in five table-service restaurant
operators is also experiencing a shortage of
unskilled labour.
•
Rising liquor costs have a negative impact on
nearly 30% of table-service operators. This share
jumps to 56% for drinking place operators (bars,
pubs, taverns and nightclubs) where alcohol
generates a higher share of total revenue.
•
An average of 28% of respondents saw fewer
tourists in April and May. In June, however, this
number fell to 19% of operators.
•
Sales taxes, including the HST in British Columbia
and competing with grocery stores where most
food is not taxed, had a negative impact on 25% of
respondents.
•
Bad weather impacted 19% of operators in Q2
while the strong Canadian dollar impacted just
12% of respondents.
CRFA’S Restaurant Outlook Survey for Q2 2012
Rising food and labour costs remain the biggest issues having a
negative impact on the restaurant industry.
70%
Rising food costs
58%
49%
Rising labour costs
Weak economy
38%
Rising gasoline prices
28%
28%
26%
25%
23%
19%
16%
12%
Shortage of skilled labour
Weak customer demand
Decline in tourists
Sales taxes
Rising liquor costs
Bad weather
Shortage of unskilled labour
Strong Canadian dollar
No factors
4%
Q: What factors, if any, are currently having a negative impact on your business?
About the Restaurant Outlook
Survey
•
•
Future editions will provide an ongoing index
of business performance and expectations that
will help restaurant owners, suppliers and
policy makers in their business planning and
analysis. We encourage restaurant operators
to participate in the Restaurant Outlook Survey
to ensure results continue to be representative
of our industry.
About CRFA
Since its founding in 1944, CRFA has grown to more
than 30,000 members representing every segment of
the foodservice industry, including restaurants, bars,
clubs, cafeterias, and contract and social caterers.
Through advocacy, research, member savings and
industry events, we help our members in every
Canadian community grow and prosper.
The responses for the second quarter are
compiled from a monthly e-mail to restaurant
operators inviting them to take an online
survey. The survey covers the reference
periods, April, May and June 2012.
•
In total, 269 completed surveys were submitted
for the fourth quarter, representing 8,184
establishments.
•
Results of the survey are considered accurate
within +/- 5.8 percentage points 19 times out
of 20. The margin of error will be larger within
sub-groupings of the survey.
Contact:
Canadian Restaurant and Foodservices Association
316 Bloor Street West, Toronto, Ontario M5S 1W5
Tel: (416) 923-8416 or 1-800-387-5649
Fax: (416) 923-1450
E-mail: [email protected]
Web Site: www.crfa.ca
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