Economists love poring over reams of statistics to see if they can find meaningful patterns and trends. One of the most popular sets of data for discerning economic vibrancy and consumer confidence is retail sales. But an often-overlooked set of data can also offer similar insight: receipts at food and drinking establishments.
The amount of money spent on lunches out, drinks after work, beer and nachos post hockey game, and champagne celebrations are almost all discretionary spending – that is, there’s usually a choice about such splurges. The exception would be dining out while travelling on business, but even this would be indicative of a strong economy.
A glance at the most recent data from Statistics Canada on restaurant and bar receipts reveals a striking imbalance across provinces. Albertans, on average, spent $2,034 per person on restaurant food and beverages over the most recent twelve months. That’s nearly 30 per cent higher than the national average ($1,567).
In fact, in April of this year, total restaurant and bar receipts in Alberta were actually greater than those in B.C., a province with half a million more residents.
What’s driving this extraordinary imbalance in per capita restaurant receipts? Here’s where even more economic data can help explain what’s going on.
The first reason has to do with affluence. For most Canadians, a dinner out is either recreation or convenience. If your budget is constrained or you’re unemployed, those Sunday brunches and Monday malbecs may be the first to be sacrificed. But workers in Alberta earn an average $1,142 a week (including overtime), the highest in the country and 23 per cent above the national average. With more disposable income, it’s no surprise Albertans are enjoying their steakhouses and sushi bars.
The second reason is demographics. Before the demands of mortgage payments, children in sports and saving for retirement kick in, a lot of young adults are probably willing to part with their cash at bars and restaurants – especially if they’re earning good money. It’s a common form of socializing and recreation.
Demographically, Alberta is an outlier. According to the 2011 census data, 25.4 per cent of Albertans are between the ages of 20 and 34, or 4.4 percentage points higher than the national average. That younger cohort in Alberta is filling espresso bars and noodle houses at a greater rate than elsewhere.
A third explanatory factor is time. Not only are restaurant meals often recreational, they’re often a convenience. The time demands of work, family, volunteerism and other obligations may make it difficult to get home in time to prepare a meal. Grabbing a pizza or ordering in some Indian vindaloo may make more sense (at least from a time-management perspective).
Here again the economic data show Alberta unique from other provinces. Employees in Alberta work about 32.2 hours a week (including overtime hours and part-time workers), the longest workweek in Canada and 7.7 per cent greater than the national average.
But another factor may have to do with the menu prices of restaurant food. Anecdotally, I know restaurant prices in Alberta seem higher than elsewhere in Canada, yet there is no available data for comparing prices across cities or provinces. Using CPI data, we do know that restaurant prices in Alberta have increased by 28.8 per cent over the past 10 years, not significantly different than the Canadian average (28.4 per cent). But menu prices in Alberta likely started from a higher base in 2004.
The tight labour market is probably a factor here too. When restaurants in Alberta have to pay up to $17 an hour for unskilled dishwashers, it’s no wonder that diners face higher prices on their bills. Foreign temporary workers have helped fill some of this shortage of willing workers – without them prices on menus would probably be even higher.
Greater affluence, younger people, fewer leisure hours and higher menu prices – it all adds up to a lot of money being spent in restaurants in Alberta.
This column originally appeared in The Globe and Mail on July 18, 20