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Alberta restaurants end the year strong

Alberta restaurants end the year strong

Posted on: 3/1/2018 | Author: ATB Financial's Economics + Research Team

​​After two months of decline, restaurant and bar receipts in Alberta ended the year on an upswing. During the final month of 2017, Albertans spent $789 million (seasonally adjusted) at establishments across the province, the highest total on record.

This rise in restaurant spending is in large part due to higher menu costs. Restaurant food prices grew 2.5 per cent last year and were the direct result of higher wage costs. Throughout 2017, Alberta restaurants had to offset higher wage costs by increasing the price of menu items.

These costlier food and drink items are doing little to dissuade Albertans from eating and drinking outside the home. Total restaurant and bar receipts grew by $217 million last year—a little more than two per cent over 2016. An overall improvement in energy prices, labour market conditions and an increase in wages have resulted in growing consumer confidence and led more people to enjoy nights out on the town.

The fact that Albertans continue to spend their hard-earned dollars at restaurants and bars is good news for the province’s hospitality industry. Restaurants should still feel cautious, though, as the rise in receipts could be partially fueled by credit. Elevated levels of household debt and higher interest rates may begin to chop restaurant revenues in the months ahead.

Restaurant and bar receipts, graph

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