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Restaurant price growth will be slower than expected this year: report

HALIFAX — An update to a yearly food price study anticipates restaurant food costs will be much lower than initially predicted, saying annual sales will be slashed in half amid the novel coronavirus outbreak.
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HALIFAX — An update to a yearly food price study anticipates restaurant food costs will be much lower than initially predicted, saying annual sales will be slashed in half amid the novel coronavirus outbreak.

The December report from researchers at Dalhousie University and the University of Guelph forecast restaurant prices would jump between two and four per cent in 2020, but the authors have now revised that change downward.

The updated report says menu prices should "drop significantly" as restaurants close or shift to delivery and pick-up models amid efforts to contain the COVID-19 pandemic.

Restaurants typically generate about $90 billion in annual sales, but the report now expects $40 billion to $50 billion of that consumer spending will go to grocery stores instead.

Co-author Simon Somogyi says restaurants may lower their prices in an effort to be more competitive, but he doesn't anticipate the shift from restaurants to grocery spending will be lasting.

The updated report leaves unchanged the expected jump in total food and grocery costs at a maximum of four per cent, but with bigger than initially expected increases in vegetable and bakery costs.

This report by The Canadian Press was first published March 31, 2020.

 

The Canadian Press

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