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Restaurant and bar spending up but also down

Restaurant and bar spending up but also down

Posted on: 3/26/2018 | Author: ATB Financial's Economics + Research Team

​​One of the ways we take the pulse of Alberta's economy is by looking at how much Albertans are spending at restaurants and bars.

Let’s start with the good news. Annual spending at restaurants and bars in our province has increased every year since 2010, even during the recession of 2015-16. The pace of growth picked up in 2017, with the annual change in sales going from a 1.0 per cent increase in 2016 to a 2.4 per cent jump in 2017. Although down from top spot in 2014, Alberta posted the second highest per capita spending at restaurants and bars among the provinces last year.

Now the bad news. Although spending has continued to grow, when compared to the pace before the recession, it's growing much slower. Annual growth averaged 7.0 per cent over the 2011-14 period compared to 1.7 per cent over the last three years.

When we control for population growth and inflation, we find that spending was actually down in 2015 (-1.0 per cent), 2016 (-2.3% per cent) and 2017 (-0.9 per cent). At the same time, we saw record years of tourists in 2016 and 2017. That's good news for restaurants -- a sale is a sale. But the rising level of spending in the overall picture may not be necessarily an indication that Albertans are spending more.

So even though restaurant and bar sales have continued to grow -- which is a much better sign than if they are shrinking -- they are not growing as fast as they were and when we account for cost increases and population growth, they are down, not up.

Restaurant sales, graph

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