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O N TA R I O R E S TAU R A N T N E W S
Canada’s minimum wages set to increase TORONTO—Minimum wage has increased or is set to rise in nearly every Canadian province this year. In Alberta, it will increase to $10.20 on Sept. 1 following annual hikes since 2012. On Oct. 1, Saskatchewan and Manitoba’s wage will increase to
$10.20 and $10.70 respectively. The most recent rise in Saskatchewan was in 2012 from $9.50 to $10. Manitoba saw wages increase in 2012 and 2013 to $10.25 and then $10.45. In Ontario, minimum wage increased in June to $11. The previous rise was in 2010 to $10.25.
Quebec’s minimum wage workers saw an increase to their base rate in May to $10.35. In la belle province, hourly wages increased in 2012 to $9.90 and in 2013 to $10.15. Nova Scotia saw its minimum wage increase by 10 cents to $10.40. It has seen slight raises for more than
Provincial minimum wage at year’s end in 2011 and 2014
three consecutive years, increasing from $10 to $10.15 in 2012 and to $10.30 in 2013. Prince Edward Island will incur two increases this year. In June, minimum wage increased from $10 to $10.20 and will be set at $10.35 in October. Newfoundland and Labrador last saw a minimum wage increase in 2010 to $10. In October, the province’s rate will increase to $10.25 with another 25-cent hike the following year. In the Yukon, minimum wage increased from $10.54 to $10.72 this year. In 2012, the territory saw two bumps, bringing the minimum wage to $9.27 and then $10.30. Minimum wage in Nunavut, British Columbia, New Brunswick and Northwest Territories will hold at $11, $10.25, $10 and $10, respectively. Minimum wage rates in the Northwest Territories and Nunavut have not changed since 2011. The last increase in B.C. was in May 2012 from $9.50 to $10.25. In New Brunswick, minimum wage has not moved since April 2012, when it saw a 50cent hike. A lower minimum wage exists in some provinces for liquor servers or employees who usually receive gratuities: Alberta ($9.20), B.C. ($9), Ontario ($9.55) and Quebec ($8.90).
New StatsCan study According to Statistics Canada, the average national minimum wage amounted to $10.14 in 2013.
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Fast casual on the rise By Scott Stewart, The NPD Group There has been much discussion surrounding the emerging fast casual segment in Canada. As more operators enter—whether as new brands or entry from the U.S. marketplace— focus is shifting to how this segment is changing the market overall. The Ontario industry should pay the most attention to this trend, because the emerging segment is far more developed there than in other regions of the country. Although Ontario accounts for 39 per cent of Canada’s total population, it surpasses its proportional population share of the fast casual segment. As of December 2013, Ontario is home to 59 per cent of the country’s fast casual units. In comparison, only 38 per cent of Canada’s total restaurants reside in this province. Not only does Ontario house the most fast casual units, but it also has been the driver of the segment’s store growth for the country. Since last year, fast casual increased its national unit count by 101, with 98 coming into Ontario.
In the middle Fast casual development has implications on both quick service and full service restaurant operators, as it shares traits with each and is positioned between the two traditional segments. For example, 63 per cent of fast casual visits occur at lunch and supper, which is almost halfway between lunch and supper’s share of QSR (40 per cent) and FSR (79 per cent). Among these lunch and supper occasions, fast casual average eater cheques are $9.50, which is again finding a gap between QSR ($7.11) and FSR ($16.70).
Twist on the traditional With all the buzz in the Canadian industry surrounding the emergence of fast casual, the Ontario industry must be more acutely aware of this trend, as it has a magnified effect on this market. Not only are there more of these restaurants competing in the market, but their twist on the traditional foodservice experience is changing the way consumers use the industry. Among lunch and supper occa-
sions, fast casual consumers are more likely than QSR and FSR customers to be driven to visit by food quality, special tastes/cravings, and healthier choices. Fast casual customers consider food quality almost as important as a convenient location; while at QSR, food quality is less than half as important as a location convenience. This vast difference in drivers is an indicator that consumers are approaching this emerging segment differently than they treat QSRs and FSRs. As this segment continues to grow, it could further shift the way consumers think about and use the foodservice industry. Fast casual is growing quickly within the Canadian marketplace, with Ontario at the centre. With the overall marketplace already flat, and share battles the primary way to drive traffic gains, operators must be aware of this intensified competition in the Ontario region. Going forward, it will be necessary to better understand how the Ontario consumer wants to use the foodservice industry, and how current QSR and FSR operators can adapt to meet that need. While it is important to
In a study released on July 16 entitled The ups and downs of minimum wage, 1975 to 2013, analysts looked at “real minimum wage” over the years by translating the average of provincial wages over the time period into 2013 dollars to account for inflation and allow for comparison. According to the data, real minimum wage was “almost identical” last year and in 1975 at $10.13, but it varied within the time period. The real minimum wage declined to $7.53 in 1986 and increased to $8.81 in 1996. Up until 2003, it remained stable at about $8.50. Since then, real minimum wage has increase by almost $2, from $8.27. Last year, the proportion of Canadian workers earning minimum wage was 6.7 per cent, up from five per cent in 1997. According to StatsCan, the increased proportion—which mostly occurred between 2003 and 2010—was to some degree a result of increases in minimum wage rates in many provinces. According to StatsCan, 17 per cent of employees in the retail trade and 27 per cent of those in the accommodations and foodservice sector were paid the minimum wage rate in 2013. These sectors accounted for more than 60 per cent of those earning minimum wage in Canada. The proportion of employees paid at minimum wage varied by province in 2013, led by P.E.I. (9.3 per cent) and Ontario (8.9 per cent). Alberta had the lowest rate at 1.8 per cent.
VISIT DRIVERS - LUNCH AND SUPPER
keep in mind that fast casual still accounts for a small portion of the marketplace (0.5 per cent of total foodservice traffic), the sooner operators can understand what it is about this emerging segment that resonates with consumers, the sooner these operators can bring more Ontarians into their restaurants.
Scott Stewart is an account manager, Foodservice Canada for The NPD Group, which has more than 25 years of experience providing consumerbased market information to the foodservice industry. For more information, visit www. npd.com.