TORONTO, May 2 /CNW/ - More than five years after it began, the "perfect
storm" is still being felt by Ontario's restaurateurs and bar owners.
Between 2000 and 2006, restaurant industry revenues fell by an
inflation-adjusted 1.8%, which represents a drop in demand of $291 million.
Sales won't recover to 2000 levels until 2008, according to a new forecast by
the Canadian Restaurant and Foodservices Association (CRFA).
Starting in 2001, the hospitality industry was hit by what has been
termed the perfect storm: the impact of the 9/11 terrorist attacks, SARS,
smoking bans, the loss of an NHL season, sluggish economy, rising Canadian
dollar, and skyrocketing gas prices - factors which led to a persistent and
dramatic drop in tourism, and less spending by local customers.
Revenues in Ontario's restaurant industry grew by an inflation-adjusted
2.7% last year, according to Statistics Canada, but for the sixth straight
year it wasn't enough to restore the industry to 2000 levels.Other signs the industry in Ontario has been hard hit in recent years:
- Restaurant industry pre-tax profit margins in Ontario are the lowest
in the country at just 2.9% of operating revenue. Ontario bars have
hit a new low, reporting an average loss of 0.5% of revenue.
- Ontario has seen a 50% drop in the number of international tourists
since 2001, while the rest of Canada has seen a 24% drop.
- Real foodservice sales in Ontario are 1.8% lower than they were in
2000, compared to an 8.5% increase in the rest of Canada.
- The number of foodservice establishments in Ontario has dropped by
428 since 2000, to 22,083 in total.
- Ontario now has 17.4 foodservice establishments per 10,000 people -
the third lowest concentration in Canada and ahead of only Manitoba
and Nova Scotia.
(All figures are based on Statistics Canada data)CRFA is forecasting 1.3% real growth for Ontario's restaurant industry in
2007 and 2008. Many restaurant and bar owners will continue to be challenged
by rising costs including the new bottle deposit program and a series of
minimum wage increases, starting in early 2008, which will put inflationary
pressure on all wages and lead to higher payroll taxes for employers.
CRFA is one of Canada's largest business associations with more than
34,000 members across the country, including 11,000 in Ontario, representing
restaurants, bars, caterers and other foodservice providers.
For further information: Stephanie Jones, Vice President, Ontario, (416)
649-4243; Jill Holroyd, Vice President, Research and Communications, (416)
649-4217
