Sales* at Alberta restaurants and bars bounced back in February, growing by 2.6% to $1.05 billion—the eighth increase in nine months.

Compared to February 2023, sales were 5.8% higher.

Ongoing population growth is a contributing factor here as are higher prices, but it is still a positive sign for the sector (and the overall economy) that sales have not been on a downward slide given the impact of high interest rates on discretionary income.

With regard to prices, the cost of food purchased from restaurants in Alberta did not change in February compared to January while the cost of alcoholic beverages served in licensed establishments fell, so sales rose even after adjusting for inflation.

Prices have, however, gone up since last year. Between February 2023 and February 2024, the cost of food purchased at restaurants rose by 4.7% while alcoholic beverages came in 3.1% higher. As such, growth in year-over-year sales was due to both increased volume and increased prices.

It is important to note here that these numbers are averaged across all restaurants and bars with individual sales performance and prices varying from establishment to establishment. Higher sales, moreover, do not necessarily speak to profitability, since operating costs (including food inputs) have also increased.

In terms of what’s next, we are expecting consumer spending to be constrained by the impact of higher borrowing costs on household budgets and this could cut into restaurant and bar spending this year. On the other hand, population growth and tourism finally getting back to normal after the pandemic will support increased spending as will the fact that consumers may hold off on big ticket/interest sensitive purchases but still find room in their budgets to enjoy getting food and drinks from restaurants and bars.

*Seasonally adjusted

Answer to the previous trivia question: The seating capacity of Rogers Place for Edmonton Oilers games is 18,500.

Today’s trivia question: When did the North American Free Trade Agreement (NAFTA) come into force?