Fast food isn’t cheap food in B.C. anymore

Gone are the days when you could grab a quick value meal for around $5.

A recent Angus Reid Forum survey conducted for Visa Canada found that Canadians spend an average of $8.80 when buying their lunch. Just over 60% said they’re spending between $7 and $13 for their midday meal.

If you thought cheap prices for a burger combo from most of the major fast-food chains were something from the last century, you’d be right. According to Statistics Canada, the price of fast food has risen more than 34% since January 2000.

Up until the financial crisis, fast-food price increases stuck pretty close to Canada’s average inflation rate. That started to change in October 2008 when the average cost of living in Canada started falling, remaining relatively flat until the Consumer Price Index started rising in February 2010.

The cost of fast food has consequently risen relatively faster than the average overall cost of living in Canada, making it less affordable to grab that quick lunch instead of bagging one from home.

This bodes ill for the quick-service sector, which is increasingly competing on price with table-service restaurants.

But full-service restaurants also face price challenges. StatsCan data shows the cost of eating at a restaurant has risen relatively faster since January 2000, jumping 43% over the past 12 years.

Little wonder then that the percentage of people who consider eating at restaurants to be a special occasion is also on the rise. A December 2010 Ipsos Reid survey for the Canadian Restaurant and Foodservices Association found that 62.5% of Canadians regard eating at a restaurant as a luxury. It also found that more than a quarter of Canadians had eaten out less often in the past year primarily to help them control their spending.

Restaurant industry sales growth has consequently been flat in B.C. over the past five years after a significant run up between 1998 and 2008.

While tax issues like the HST added to the sector’s challenges, it remains to be seen if returning to the PST and GST will have a positive impact. •