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B.C. eateries, pubs seeing steepest sales drops among provinces

Sales declines in January were evident on year-over-year and month-over month bases.
Earls opened a new location at the Amazing Brentwood last year, just steps from the Millennium SkyTrain line

B.C. restaurants, pubs and bars are enduring steeper drops in sales than any other province, according to Statistics Canada data released Monday. 

Industry advocates say that this is because it costs more to live in this province than in others, and the Bank of Canada's decision to keep interest rates at five per cent since July has crimped consumer budgets. Canada's five-per-cent interest rate is higher than any time since 2001.

The nation's number cruncher said today that, in seasonally adjusted terms, B.C. food services and drinking places saw a 6.9-per-cent decline, to $1.324 billion in January, compared with December. That drop towered over Saskatchewan's 2.3-per-cent drop in those sales in those months. The next highest percentage declines in those sales in those months among provinces was in Quebec (1.2 per cent) and Ontario (1.1 per cent).

January is a slow month for the restaurant sector, compared with December, when many hold holiday parties and people generally socialize more.

B.C.'s hospitality industry's struggles, however, also showed up on a year-over-year basis.

Compared with January 2023, B.C. restaurants, pubs and bars in January saw a 2.8-per-cent decline, on a seasonally adjusted basis. The only other province with a year-over-year monthly decline in sales for food services and drinks was Quebec, where sales fell 0.76-per-cent in January. 

The year-over-year sales decline in B.C. comes despite some restaurant and bar owners able to charge higher prices. Food prices across Canada rose 5.1 per cent in that time period, while alcohol prices increased by about 5.3 per cent, according to Statistics Canada. 

A recent Bank of Canada Business Outlook Survey, however, found that the share of businesses planning larger-than-normal price increases in the next year fell to 37 per cent in the fourth quarter of 2023, down from 42 per cent in the previous quarter. 

"People are still going out, and people are still buying things from liquor retailers and others, but they're doing it less often," Alliance of Beverage Licensees executive director Jeff Guignard told BIV.

"When they do, they're spending a little less. Customers don't come in and tell us why they're spending less, but we know our costs have gone up for groceries and insurance and rent, and everything else."

He said that one of the biggest days of the year in his sector is St. Patrick's Day. This year, fewer people went to bars on that day and those who did spent less and stayed out for a shorter time period, he added. 

BC Restaurant and Foodservices Association CEO Ian Tostenson agreed with his assessment. 

"We're seeing much more activity in happy hours, so the revenue is not there," he said. "You get the people but they are spending less."

He said he has spoken with several restaurant owners who said that while there can be a late afternoon boom in business, the number of customers who come in mid-evening for dinner is much lower than it was a year ago. 

The pandemic-era shift in spending toward suburban restaurants, compared with those downtown, has started to reverse, Tostenson added. He said he thinks this might be an indication that people are starting to go back to downtown offices more often. 

Both Tostenson and Guignard pointed to a Restaurants Canada report that cited Office of the Superintendent of Bankruptcy statistics showing that the number of restaurant bankruptcies in Canada jumped to 121 in January – the highest number of monthly bankruptcies in more than a decade and a 112-per-cent increase, compared with January 2023.

Tostenson had sounded a warning that between 10 and 14 per cent of the more than 15,000 restaurants in the province could close as a result of the federal government not extending its deadline for repaying CEBA loans past Jan. 18. 

He said that while some restaurants have closed, many are continuing on for now, and may or may not be able to make required loan payments.

Another factor that could have played into lower B.C. food-service sales in January was that the province suffered unseasonably cold weather for much of a week in mid-January. That freeze also impacted Alberta and other parts of the country. 

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