N.L. restaurant, bar sales growth leads country

Daniel MacEachern dmaceachern@thetelegram.com
Published on August 1, 2013
Reluctant Chef owner Tony Butt makes pasta in his kitchen on Duckworth Street. — Still from Telegram TV

Restaurant and bar sales in Newfoundland and Labrador had far and away the most growth of any province during the past year, but industry representatives say that doesn’t mean the industry is booming.

Statistics Canada released data Wednesday detailing sales growth from month-to-month in 2013, as well as year-over-year. In May, restaurant and bar sales in Newfoundland and Labrador totalled $68.2 million, up 2.5 per cent from the previous month’s $66.6 million, second only to Nova Scotia’s 2.6 per cent growth and tripling the Canadian average of 0.8 per cent growth. But May’s sales were up 10.7 per cent from the $61.6 million in food and drinks sold in the province in May 2012. Saskatchewan’s and Alberta’s year-to-year growth (8.4 and 6.9 per cent, respectively) were the only other provinces to come close. The national average was 4.1 per cent.

Andrea Maunder, co-owner of St. John’s restaurant Bacalao, said the province’s double-digit growth doesn’t surprise her.

“We’ve been busy right from the get-go, because of our nature, because we filled a niche in the industry,” she said. “But it does feel busier, and the sales in some months do show that that increase has been happening.”

Maunder warns there is a limit to how many restaurants the province — especially in the St. John’s area — can comfortably sustain, but notes the most opportunity lies in under-served culinary areas.

“Right now in Newfoundland, we still don’t have a Thai restaurant, for example. We still don’t have a Vietnamese restaurant,” she said. “There’s no really Greek-focused restaurant. We’ve got one that does some Greek, and pastas as well. It still seems like there are some opportunities in the market. The worst-case scenario in any industry is repetition of the same thing. That’s where we have to watch out — for example, how many cappuccino bars can a city sustain? How many Newfoundland-type restaurants can a city sustain? Those are the big concerns.”

Maunder says she thinks St. John’s may be approaching an overall saturation point.

“The reality is there’s a dining public, and so certainly there are demographics within that. There’s fine dining, and there’s more casual dining, and there’s chain restaurants and all that sort of thing. There’s a certain segment of the dining public who would dine at fine dining, and prehaps a certain segment who wouldn’t, or perhaps only on a special occasion. So it’s a lot of the same people who are visiting the same restaurants depending on what night of the week it is, or what special occasion it is.”

Nancy Brace, executive director of the Restaurant Association of Newfoundland and Labrador, cautioned that the double-digit growth also doesn’t reflect the reality across the province, but mainly in St. John’s, driven by a stronger economy.

“We are, at least here in St. John’s, in a boom situation, and there’s more and more restaurants opening, so there’s more choices for people where they want to go,” she said. “We have more and more good restaurants, so that’s also an incentive to get more people out spending money, and our culinary scene is really starting to take off.”

That growth in the number of restaurants means that while the province is selling more food and drinks, an individual restaurant might not necessarily be sharing in the growth, as it fights for a smaller piece of the pie. And many restaurants outside the St. John’s area are struggling, she said.

“Part of it may be the quality. A lot of diners are getting more discerning in what they eat, and so if your restaurant’s not offering the highest quality of food, you’re going to find yourself struggling because people have gone past that brown food stage,” she said. “I also think part of it is if you’re not in the tourism-centric areas of the province, a lot of rural areas, the economy is not great, and people are not spending money in a restaurant, so a lot of places are having a hard time staying open.”