A server works on the patio of a pub in the ByWard Market in Ottawa, on June 23.Justin Tang/The Canadian Press
Ahead of Wednesday’s interest rate announcement, the Bank of Canada was on the hunt for signs in the economic data that the “surprisingly resilient” Canadian consumer was buckling. The bank got what it was looking for, crediting a “marked weakening in consumption growth” in second-quarter GDP with giving it the wiggle room to hold its benchmark interest rate steady at 5 per cent.
Dinner reservations aren’t on the central bank’s official list of data points, but restaurant industry numbers showing a slowdown in people dining out nevertheless lend weight to the bank’s rate decision.
Since the spring, the number of seated diners at restaurants in several Canadian cities has slowed significantly year-over-year, according to data published by OpenTable, an online restaurant-reservation service.
With food inflation still high, spending at restaurants can present a muddied picture of consumer retrenchment. That’s because if you look at total spending, Canadian diners don’t appear to be letting steep menu prices get in their way.
According to Statistics Canada, spending at restaurants in June, the latest reported month, was higher than in March. Meanwhile, nominal restaurant spending tracked by Royal Bank of Canada using the anonymized card transactions of its clients likewise shows spending on the up and up this year as of July.
What the slowdown in the OpenTable numbers over that time suggests is that far fewer people are eating out, but those who do are willing to keep paying a lot more for their meals.
Jason Kirby