With the weather heating up, it’s almost the time of year when restaurant patios fill up with people enjoying good food outside. But while there are few things more relaxing than eating a delicious meal while enjoying the warm weather, it appears that this year there will be fewer Canadians indulging in that luxury.
A recent study by The Conference Board of Canada suggests that a perfect storm of stagnant income growth and mounting household debt means that more consumers will be eating at home in the coming months.
This slowdown in demand is expected to continue over the medium term according to Michael Burt, the organization’s director of Industrial Economic Trends. In a press release, Burt explains the problem is directly linked to debt loads: “Canadians now carry the highest debt-to-income ratio among G7 countries,” he states, adding debt has a direct impact on the food service industry since “one of the first items that households cut back in difficult economic times is dining out.”
The report also found that the low value of the loonie will likely have an impact on the cost of dining out as food prices will increase making restaurant meals even more infrequent for many.
Who Will Be Cutting Back?
Whether or not you’re likely to spend the summer out on the patio at your favourite restaurant depends partly on which province you live in. Because of rising unemployment and lack of confidence in future job prospects in Alberta, The Conference Board of Canada expects a decline in restaurant spending in that province. In Quebec, the report also predicts sluggish growth due to an aging population and poor economic prospects.
But there are some areas of the country which could see people spending more money dining out. Restaurants in Ontario and British Columbia will likely be buoyed by strong housing sectors and growing consumer demand. Bucking the trend of other provinces, the restaurant receipts in these provinces have risen an average of 5.3 and 6.9 per cent each year since 2012. In contrast, the growth in other provinces has been around 3.2 per cent.
But the report didn’t just provide bad news for the restaurant sector. It also suggested that the sinking Canadian dollar will encourage more Canadian and international tourists to visit parts of Canada instead of going abroad. This could potentially offset some of the slowing in demand in certain provinces.
Dining Out On a Dime
If you enjoy dining out but are finding it hard to fit into your budget, there are a number of things you can do to make it more affordable. Skipping drinks, appetizers, and dessert is one way to cut down your restaurant bill significantly. Another way to do so is to find coupon books with discounts for your favourite places or to choose great restaurants with low prices to frequent.
One method that people often don’t consider is leveraging your credit card rewards to eat out at a discounted rate. There are some credit cards that even provide extra reward points when you use them to pay for your meal at restaurants. These cards which provide either travel points or cashback rewards, meaning there’s money back in your pocket after every dinner out.
The Best Credit Cards for Dining Out
The Tangerine Money-Back Credit Card: One of the newest no-fee cash-back options on the market, this card includes restaurants as one of its top-earning categories. The card allows cardholders to choose up to two spending categories (three if they opt for rewards to go directly into their Tangerine Savings account) to earn up to 4 per cent money-back. It’s perfect for those who don’t necessarily want to earn the most on the typical gas and grocery categories.
SimplyCash Card from American Express: You’ll earn up to $250 cash back within the first six months on gas, grocery and restaurant purchases. There’s no annual fee, and no cap on the amount of cash earnings.
Scotiabank®* Gold American Express® Card: Hope you’re hungry; this card earns a whopping 4 per cent on dining and entertainment, as well as gas and grocery spending. You’ll also score an extra 20,000 Scotia Points upon the first $500 spend on the card and special amenities at hotels, on airfare, car rentals, cruises and vacation packages.