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It’s not just your imagination. Restaurants really are overflowing in ways not seen since before the pandemic.

Despite crushing inflation, an acute labour shortage and the lingering effects of pandemic isolation – not to mention mounting fears of recession – figures released by Statistics Canada this week showed sales at food services and drinking places, a catch-all category for restaurants, bars and other dining options, rebounded above their prepandemic level for the first time in April.

This isn’t simply a matter of restaurants jacking up the prices on their menus, even though they’ve been doing exactly that as wages and food ingredient costs soar along with inflation. (This week’s inflation report for May showed prices for restaurant food soared 6.8 per cent from the year before.) The accompanying chart shows food service and drinking place revenues after adjusting for the bite of inflation.

But more than that, figures tracked by OpenTable, the online restaurant reservation service, show the number of diners in mid-June were roughly 15 per cent higher in Canada than the same period in 2019.

The rebound is by no means evenly distributed. While full-service restaurants and limited-service eating places (such as coffee shops and fast food restaurants) are fully back, bars and drinking establishments continue to struggle, reflecting a longer-term downturn in places that primarily sell alcohol.

Even so, the coming months will determine which of two competing forces will win out in the industry – the Bank of Canada’s efforts to tamp down consumer spending with rate hikes versus a nation of diners trying to make up for two years stuck eating at home.

Decoder is a weekly feature that unpacks an important economic chart.

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