Everyone’s cutting down on booze, which is great for our collective sleep and less great for the neighbourhood restaurant banking on us buying $20 martinis.
Driving the news: New Statistics Canada data shows Canadians' alcohol consumption hit the lowest level on record last year, driven by cost-of-living pressures and young people partially or fully cutting out booze. A recent survey found that 41% of Canadians have cut their alcohol consumption in the past year.
Alcohol sales in Canada declined for the fourth year in a row, with Canadians now buying the equivalent of eight drinks per week. That’s down nearly two full drinks from a decade ago.
Why it matters: Canadians drinking less is objectively a positive trend healthwise, but for many restaurants, the pullback from booze is an existential threat to their business model. Food might be what gets people in the door, but a restaurant's profit lives and dies on alcohol sales.
Food sales will often bring in 70% of revenue, but because of the high markup on booze (sometimes 300-400% for a bottle of wine), alcohol can often make up 80% of a restaurant's gross profit.
What’s next: The high cost of drinking at restaurants will always be a deterrent for some, but the health and wellness part of this equation could fade. As Toronto restaurateur Jen Agg told The Peak, “I suspect there will be a bit of pushback against all this wellness, as there always is with trends. And with the world as it is, maybe a drink isn't such a radically bad idea!”—LA