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Canadians cutting back on restaurant spending, turning to takeout, amid high cost of living

Gothenburg, Sweden - April 11, 2019: Uber eats delivery person carrying food to people who order by online app
Canadians are cutting back spending at dine-in restaurants, new data shows, and turning to cheaper takeout options as they grapple with a higher cost of living. (Getty Images) (nrqemi via Getty Images)

Canadians are cutting back spending at dine-in restaurants, new data show, and turning to cheaper takeout options as they grapple with a higher cost of living.

Statistics Canada data released this week shows that sales at food service and drinking establishments across the country fell 1.9 per cent in January to $7.9 billion. Ontario experienced the biggest decline, with sales at food service and drinking places falling 1.1 per cent, or $3.1 billion. Quebec saw sales fall 1.2 per cent in January (down $1.5 billion) while B.C. sales dropped 6.9 per cent (down $1.3 billion.)

Full-service restaurants saw the value of sales drop 6.4 per cent in January, while limited-service places – establishments that cater to takeout over dine-in – saw sales increase 2.4 per cent. This comes despite Statistics Canada data that show restaurant prices were up 5.1 per cent year-over-year, and alcoholic beverage prices at licensed establishments were up 5.3 per cent.

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At the same time, the 2024 Canadian Diner Trends Report from restaurant software company TouchBistro found that Canadians are increasingly turning to takeout over dining-in at restaurants as they tighten their purse strings.

While Canada's inflation rate cooled more than expected in February, increasing 2.8 per cent on a yearly basis, food purchased from restaurants was up 5.1 per cent. Fast food and takeout prices were also up 5.8 per cent.

“Economic uncertainty will keep both diners and restaurateurs on their toes in 2024, as Canadians watch their spending while they wait to see whether inflation will continue to drop,” the TouchBistro report said.

The survey, based on questions to 1,000 Canadians, found that Canadians dined-in less frequently throughout 2023 than they did in 2022, with visits down 13 per cent annually, due to the impact of inflation on discretionary spending. TouchBistro noted that while many Canadians traded restaurant meals for home-cooked ones, many instead shifted to takeout. The survey found that nearly one in three (31 per cent) Canadians now order takeout at least once a week, up 6 per cent compared to a year earlier.

“Among Canadians of all ages, ordering takeout/delivery, instead of dining in, has become increasingly convenient and cost effective,” the TouchBistro report said.

The report found that through 2023, 19 per cent of Canadians said they were dining out rarely, if ever, or never. That’s up from 15 per cent the year before. One in four Canadians said they dine out weekly or more (25 per cent) down 11 per cent compared to the year before.

The shift away from in-person dining comes as diners become increasingly sensitive to price hikes, the TouchBistro survey said. While average spend at restaurants has remained the same year-over-year ($56 for dining-in and $39 for takeout), the report said it could indicate that higher menu prices are a contributing factor to spending holding steady as Canadians dine out less.

Still, the survey found that younger consumers still dine out frequently. According to TouchBistro, 50 per cent of Gen Z consumers dine out weekly or more. Another 38 per cent of Gen Z diners said they eat at new places at least once a month. That’s compared to just 4 per cent of Boomers who said they eat at new restaurants at least once a month.

The TouchBistro survey, conducted by Maru/Matchbox, was conducted between Sept. 12 and Sept. 21 of 2023, with a margin of error of +/- 3 per cent.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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