The restaurant and bar sector is important in and of itself, but it also helps us assess the overall direction of the economy. If sales in the sector are on the rise, it points to a degree of consumer confidence and underlying economic momentum. If sales are sluggish or falling, it sends up a red flag.

With the numbers now in for April, we can say that monthly sales in Alberta grew by 2.0% on a seasonally-adjusted basis. The growth came, however, after a 1.9% pullback in March.

To get a better sense of the trend, it helps to look at how things are shaping up on a year-to-date basis (YTD). When we do that, sales in Alberta were up by 4.4% over the first four months of the year compared to the same period in 2023. The increase, moreover, was on top of a 17.6% YTD jump in 2023 when the sector was bouncing back from the pandemic.

Another way to look at this is sales per capita. Combining the latest quarterly population figures with quarterly revenue, we find that sales per Albertan in Q1 2024 were roughly the same as they were in Q1 2023. Compared to Q1 2022, however, they were 16.1% higher.

What does this add up to? Given the elevated inflation and higher borrowing costs that have prevailed over the last two years, the fact that restaurant and bar sales have not gone down has been a good thing for the sector (recognizing that higher sales do not necessarily mean higher net earnings as operating costs also have to be considered).

The stats also highlight the role played by resilient consumer spending in warding off the recession that seemed inevitable when interest rates started going up. Albertans are spending more, not less, at restaurants and bars than there were before inflation and interest rates shot up.

At the same time, the lack of per capita growth in the first quarter and indications that the YTD volume of sales has flattened point to consumer fatigue setting in as the lagged impact of higher borrowing costs lands on more and more households.

With this in mind, we will be carefully watching the trajectory of restaurant and bar sales to see if falling interest rates boost consumer spending as expected.

Answer to the previous trivia question: At 32% of its total population, Newfoundland and Labrador is projected to have the highest percentage of seniors in 2048?

Today’s trivia question: In what year did the Japanese TV show “Iron Chef” premier?