Canadian Occupational Projection System (COPS)

Industrial Summary

Food Services

NAICS 7223; 7224; 7225

This industry comprises establishments engaged in preparing meals, snacks and beverages for immediate consumption on and off the premises. It is composed of three segments: special food services (caterers and mobile food services); drinking places serving alcoholic beverages (bars and taverns); and full-services restaurants and limited-service eating places (family and fine-dining restaurants, fast food restaurants, coffee shops). It does not include food service activities that occur within establishments such as hotels, civic and social associations, amusement and recreation parks, and theatres. However, leased food-service locations in facilities such as hotels, shopping malls, airports and department stores are included. Full- and limited-services restaurants are by far the largest segment, accounting for 91% of employment in 2016, followed by special food services (5%) and drinking places (4%). The 4-digit NAICS breakdown for GDP is not available. Overall, the industry employed 1.0 million workers in 2016, distributed proportionally to provincial population: 39% in Ontario, 24% in Quebec, 14% in British Columbia, 12% in Alberta and 11% in the remaining provinces, with women accounting for the majority of the workforce (57%). The industry is characterized by much lower wages than the national average and by the largest concentration of part-time workers in the economy, accounting for 46% of its workforce. Food services also provide many young people with their first jobs as about 40% of workers are aged between 15 and 24. Key occupations (4-digit NOC) include:

  • Food counter attendants, kitchen helpers and related support (6711)
  • Cooks (6322)
  • Food and beverage servers (6513)
  • Restaurant and food service managers (0631)
  • Food services supervisors (6311)
  • Maîtres d'hôtel and hosts/hostesses (6511)
  • Chefs (6321)
  • Bartenders (6512)
  • Bakers (6332)
  • Delivery and courier service drivers (7514)

Food services are heavily reliant on consumer spending and are particularly sensitive to growth in disposable income and changes in discretionary expenditures. Tourism activity, both from the domestic and foreign sides, is an additional driver of demand, as non-local consumers account for about one quarter of the industry’s revenues. Demand for food services also relies, to a smaller degree, on business spending (e.g. business lunch) and business travel. The industry has been a bright spot for the Canadian economy over the past decade. After declining somewhat during the recession of 2008-2009, output and employment quickly recovered and increased continuously and solidly from 2010 to 2016. Improving household income, combined with a growing affinity of Canadians to dine out, have been key drivers behind the industry's solid performance. The emergence of the fast-casual dining restaurants, which has been able to create a wedge between traditional full-service restaurants and fast food restaurants in terms of costs and quality, is an additional factor that contributed to the expansion of the industry. In contrast, drinking places continued to struggle as a result of changing social trends, growing health awareness, population aging, and the increasing gap between the price of alcoholic beverages served in bars and those sold in stores. More recently, the sharp depreciation of the Canadian dollar attracted a large number of foreign tourists to Canada, particularly Americans, and encouraged more Canadians to choose vacation within the country, increasing demand for food services. Lower transportation costs resulting from lower fuel costs also contributed to increase tourism activity. On average, real GDP and employment in the industry increased at annual rates of 2.1% and 2.2% respectively over the period 2007-2016, largely outpacing the performance of the overall economy. Anemic growth in productivity reflects the fact that the industry is highly labour intensive, employing nearly four times as many workers per unit of output as the average for the entire services-producing sector. That said, employment growth has slowed somewhat in recent years as restaurants have begun to explore increasingly sophisticated concepts such as self-service ordering and robotic servers. Most notably, McDonald’s Canada introduced and continues to spread the use of its build-your-own-burger kiosks.

Over the projection period, food services will continue to benefit from a positive outlook for tourism activity in the short- to medium-term, but slower growth anticipated in consumer spending over the longer term is expected to weaken output growth in the industry relative to the period 2007-2016. More precisely, tourism activity should continue to be driven by a favourable currency situation, lower transportation costs, robust labour markets in the United States and Canada, major events related to the 150th anniversary of the Canadian Confederation and the 375th anniversary of Montreal, and the fact Canada was named best travel destination by Lonely Planet and the New York Times in 2017. Those developments are expected to support demand for food services resulting from tourism activity in the short- to medium-term. Over the longer term, however, the industry will be affected by the adverse impact of demographic changes on consumer spending. Indeed, slower growth in the working-age population is expected to constrain overall employment growth, while the aging of the population will result in massive retirements of baby-boomers from the labour market. These two factors are expected to constrain the pace of growth in disposable income and consumer spending, including discretionary spending on food services. High consumer debt levels and the gradual increase anticipated in interest rates are also expected to put pressures on household budgets, reducing discretionary income available for dining out. Moreover, if the dining habits among retiring baby-boomers follow the trends of the previous generation, they are likely to spend more of their food dollars at home as they age. On the other hand, the aging of Canada’s population is expected to increase demand for food services from health care institutions, which account for more than half of institutional food services sales. A stronger U.S. economy and increased business activity and corporate profitability in Canada are also expected to stimulate business travel and business spending on food services. The resulting pace of growth in the industry’s real GDP is expected to average 1.7% over the period 2017-2026, a slight slowdown relative to the previous decade. Employment growth is also projected to weaken, averaging 1.2% per year. In contrast, productivity growth is projected to pickup. Indeed, given the weaker pace of growth anticipated in Canada’s labour supply and the gradual tightening of the labour market, low wages that characterized this industry will make it increasingly challenging for employers to compete with other industries to attract workers, forcing businesses to increase their level of productivity. As a result, the industry will continue to explore ways to digitalize dining in order to engage customers and improve efficiency. The technical feasibility of automation for various occupations within the industry given current technologies remains significant. For instance, food counter attendants and kitchen helpers are at risk of being automated over the next 10 to 20 years. While the cost of technologies relative to the cost of labour (e.g. higher minimum wages making labour less attractive to capital) will ultimately influence the pace at which automation technologies are adopted within the industry, automation is nonetheless expected to maintain downward pressure on labour demand.

Real GDP and Employment Growth Rates in Food Services

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Food Services. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Food Services, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 2.1 2.2
2017-2026 1.7 1.2

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

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