Nighttime spending dips as Canadians continue to grapple with high prices

Toronto and Calgary have jointly earned the title of Canada’s “Party Capital” for 2024, according to recent data from technology company Square. The study, which analyzed millions of in-person transactions, revealed that both cities had the highest percentage of “nighttime” spending at bars, cafes, and restaurants, with 38% of transactions occurring between 7 p.m. and 4 a.m. However, the nightlife scene has slightly dimmed compared to last year, with nighttime transactions down from 41% in Toronto and 39% in Calgary in 2023.

These numbers are in line with the results of a new Square survey, conducted by Morning Consult, which found that 43% of Canadians say they go out slightly or a lot less often now than in past years. Of this, 23% fall into the “a lot less often” camp. The cost of food was the main driver for this change in behaviour, with 72% indicating that the rising cost of food is the main reason they stay home. Rising drink prices were another factor mentioned by 51% of respondents.

“We’re seeing a bit of a reset, but given the broader economic climate, we’re calling this a win,” said Ara Kharazian, Research & Data Lead at Square. “The share of nighttime spending is still in-line with or above comparable cities in the United States and Europe. Slowing inflation will ideally improve consumer confidence, so we feel optimistic about Canada’s night economy going forward.”

Happy Hour is feeling a little sad

As bars and restaurants look for ways to bring in more patrons, Happy Hour is one area that offers the chance to attract customers. But the survey found that the promised discounts associated with early drinks and dinner aren’t enough to move the needle:

• 47% believe that the discounts offered during Happy Hour are negligible
• 62% say that even with Happy Hour discounts, it’s still too expensive to go out
• 32% say they attend Happy Hours a lot less often now than in past years

The buzz around beer

Even if outings have dipped, Canadians are still up for the occasional night out, and for beer drinkers, preferences are pretty clear cut. According to the survey, 31% of Canadians prefer Lager. Blondes were the second most popular, but by a very large margin, with only 12%. Pilsner (9%), IPA (6%) and Stout (4%) rounded out the less popular types.

While they are quite clear on types of beer, Canadians are far less picky when it comes to flavoured or specialty beers. Though 14% of beer drinkers indicated a deep dislike for such creations, 85% are more open to them, with 24% saying they love trying new concoctions. Forty three per cent of beer drinkers said their preferences change depending on the flavour.

“We’ve definitely observed a shift in preferences over the past few years. Our customers used to come in looking for new and exciting specialty options, but now they lean toward the more tried and true,” said Adin Wener, co-owner of Henderson Brewing Company in Toronto. “I’d say people are less curious with craft beer, and are looking for consistency, rather than something surprising but that they may not enjoy.”

The word on wine

But of course, many Canadians prefer other alcoholic beverages, such as wine, and like their flag, Canadians are split between red and white. When it comes to their preferences, 29% of Canadians prefer red, 22% prefer white, and 12% opt for sparkling varieties.

Among the 72% of Canadians who drink wine, Merlot is their favourite red varietal, preferred by 21%, followed by Cabernet Sauvignon (19%), red blends (18%) and Pinot Noir (16%). When it comes to white, 18% of wine drinkers prefer Pinot Grigio, followed by Rose (14%), Sauvignon Blanc (13%), and Moscato (11%).

The tale of mocktails

With the rise in popularity of non-alcoholic spirits, mocktails offer a heightened drink experience for those who prefer to refrain from alcohol, and a third of Canadians are on board:

• 33% love that they can get a fancy drink without the alcohol, with younger Canadians leaning into non-alcoholic beverage culture more than older ones
• Conversely, 45% say mocktails are too expensive for what they are

For more information about how Square’s integrated ecosystem of commerce products can help bars and breweries start, run and grow, visit squareup.com/ca/en/point-of-sale/restaurants/bars.

Methodology
Square’s State of Bars & Breweries Survey was conducted by Morning Consult from August 9 to 12, 2024 among 1,001 adults in Canada. All interviews were conducted online. Weights were applied for gender, age, region, and education. Results from the full survey have a margin of error of +/- 3% and the margin of error among subgroups is greater.