OTTAWA, Aug. 2 /CNW Telbec/ - After falling to a three-year low in 2006,
profits in Canada's food services industry are expected to reach record levels
in 2007, according to the Conference Board's Canadian Industrial Outlook:
Canada's Food Services Industry - Summer 2007.
"Rising costs were to blame for the decline in profits last year. Tight
labour markets, particularly in Western Canada, have been driving up wages,
while higher food and energy prices are also increasing industry costs," said
Michael Burt, Senior Economist. "To offset this, food services companies are
passing their costs on to consumers, resulting in improved profits this year."
Thanks to their ability to compete on services as well as price, food
services companies have been able to consistently raise prices above the rate
of inflation. Price increases in the industry have exceeded the rate of
inflation for three consecutive years.
Although margins will remain thin throughout the forecast period, profits
will reach a record $433 million this year and improve steadily over the next
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