Canadians resume eating out, study shows

Dana Flavelle
Business Reporter

Canadians have resumed eating out, a study shows.

After a year in decline, visits to restaurants rose 2.3 per cent in the latest three month period, the study by the NPD Group shows.

Even families with small children visited restaurants more often, another sign that consumer confidence, along with the economy, is improving, the market research group concluded.

“When they’re feeling a little more confident about their future prospects they free up their spending a bit more and restaurants are typically the first place you see that,” said Linda Strachan, the firm’s restaurant industry analyst.

The owner of the Hot House Café, in downtown Toronto, says he’s also noticed the change.

“I have definitely seen a very nice uptick in the past several months,” said Andrew Laffey, owner of the large casual eatery on Church St. “It’s not the glory days of pre-2008 but it’s definitely way ahead of the bad days of 2009 when the market crashed. I think people are feeling very buoyant about the economy. You just have to look at the condo market to see it.”

However, diners are still spending carefully, choosing value-priced menu items and skipping extras like appetizers and dessert, the NPD study found.

Spending in restaurants grew at a slower pace than the number of visits, the study found, gaining just 1 percentage point during the three month period, between last December and this February.

“People are visiting a bit more often but per visit they’re spending a bit less. So the dollars aren’t growing quite as fast as the traffic,” Strachan said in a telephone interview Wednesday.

In fact, for restaurants the news isn’t all good.

Customers spent on average $7 a person, a figure that remained flat year over year, while the cost of doing business rose 3 per cent, Strachan noted.

“So, it’s put some real pressure on restaurants on the margin,” she said.

Fast food chains are doing better than casual family dining restaurants, the NPD study found, especially those that have added more upscale items to their menus. You can get a premium burger at a drive-through outlet, she noted.

“Rather than dropping 10 or 15 bucks at a sit-down restaurant, people are favouring fast food a bit more,” Strachan said.

Canada’s leading fast-food restaurant, Tim Hortons Inc., reported sales jumped 4.8 per cent while adjusted profit soared 19 per cent in the first quarter this year. It partly credited its “roll up the rim to win” contest, which gave away 40 vehicles as prizes.

Meanwhile, the world’s largest fast-food chain, McDonald’s Corp. reported both higher sales and profit after introducing dollar meals and Angus beef wrap sandwiches in the U.S. Profit jumped 11 per cent while sales grew 10 per cent in the first quarter of this year, the company said in April.