beer sales

Beer sales are declining as restaurants continue to struggle

As restaurants try to return to “business as usual” while battling labour shortages and supply chain delays, beer sales are on the decline. Total beer sales are down over seven per cent across Canada, dipping over eight per cent below pre-pandemic numbers.

By province, beer sales have decreased by 12.6 per cent in Saskatchewan, 10.7 per cent in Alberta, and 3.3 per cent in Ontario. These dramatic drops have the industry worried. With pre-pandemic beer sales accounting for 149,000 jobs across the industry, this could have serious economic ramifications.  

What’s the cause? There are a number of factors contributing to this decline.

Changing consumer habits is one reason numbers have dropped. Restaurant and event consumption levels have decreased to 35-40 per cent below pre-pandemic numbers. It looks like the alcohol landscape evolved in the last few years and consumer preferences have shifted, making ready-to-drink beverages the new favourite.

Another contributing factor is the ongoing labour shortage. Many restaurants are still struggling to fill their employee rosters and have had to continue with shorter hours and fewer days open.

Public events could previously be counted on to boost beer sales in pre-pandemic days, but they have not yet returned in full force. Some events have been held this year, but it seems people are still feeling cautious as we enter the fall.  

Yet another factor is inflation, of course. When consumers are seeing rising prices everywhere, beer can seem like a luxury. Many people have cut back on expenses they deem optional, as food prices continue to rise.  

Even beer has not escaped inflation, with prices rising 10 to 15 per cent in the last 12 months. In 2017, Ottawa introduced a new taxation formula based on our consumer price index (CPI). With our current CPI, beer tax may rise as much as another seven per cent by April 2023.    

RELATED: Beer Canada urges targeted tax relief measures

When restaurants began re-opening and consumers returned to their favourite restaurants, the expectation was that beer sales would resume, and the industry would recover this year. As restauranteurs continue to struggle with labour and inflation, the industry will have to adjust and adapt to see success in 2023.