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Restaurant receipts taken off the boil

Restaurant receipts taken off the boil

Posted on: 1/24/2018 | Author: ATB Financial's Economics + Research Team

For two months in a row, restaurant receipts in Alberta have fallen. During November, Albertans spent $759 million at restaurants and bars across the province. November’s total was about $10 million lower than October and the lowest monthly total since March of last year.

What’s driving the recent decline in spending at restaurants? Even though Alberta’s economy is improving, wages are on the rise. This may be reflected by higher menu costs at restaurants and may be dissuading some Albertans from spending some money on a night out. Before the two month decline, receipts had grown for six consecutive months, reaching five consecutive record highs--with the highest in September. It was only a matter of time before the momentum slowed.

Despite the pullback over the past two months, restaurants and bars in the province have reason to think positively. In the 12 months leading up to and including November, total receipts from restaurants and bars in the province have grown by about $1.0 billion or two per cent. An improvement in energy prices and labour market conditions have resulted in driving consumer confidence and led more people to enjoy meals and drinks outside the home.

There remains one concern. There’s no real way to tell how much the rise in receipts over the year is fueled by credit. Rising household indebtedness and climbing interest rates may begin to slow restaurant kitchens going forward.​

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