Seasonally-adjusted restaurant and bar sales in Alberta were stronger in the second quarter, up 1.9% compared to Q1.

The second quarter results helped push sales during the first half of 2024 4.1% higher than over the same period last year.

About half of the year-to-date increase was from higher revenue in the limited-service eating places category (e.g., fast food restaurants and coffee shops) whereas bar sales barely grew and accounted for less than 1% of the overall increase.

While the increase in overall revenue is obviously better for the restaurant and bar sector than a decrease, it masks signs of underlying weakness.

If we consider that the price of food sold by restaurants was 4.7% higher in the first half of 2024 than the first half of 2023, this points to sales being relatively flat in real terms (see the chart below).

(We have also seen signs of consumer fatigue in the retail sector.)

While it is a positive sign for the restaurant and bar sector and for the economy in general that Albertans have not drastically cut back on their spending in this area (a trend helped along by strong population growth), the inflation-adjusted picture suggests that the “soft landing” our economy is experiencing is still a bumpy one.

While our forecast is for some improvement in overall consumer spending next year, it will take time to fully get out from under the lagged impact of high inflation and high interest rates.

Answer to the previous trivia question: The hit song “Don’t Worry, Be Happy by Bobby McFerrin came out in 1988.

Today’s trivia question: How many different sports will the athletes compete in at the Paris 2024 Paralympic Games?