Retail Traffic

FAT TAX, FAT CHANCE

The provincial government in Ontario, Canada — where 39 percent of the country's population lives — is considering an 8 percent sales tax on restaurant meals under $4. Dubbed the fat tax, the tariff is being proposed as a way to counter obesity and Ontario's budget deficit. A similar federal goods and service tax in 1991 resulted in a 10.6 percent decline in restaurant sales. A decision on the tax should come down later this month, but consumer and industry groups are vocally opposing it. McDonald's has about 4 percent of its store base in Canada, Starbucks has 5 percent and Yum! Brands has 4 percent. Wendy's, whose Canadian Tim Hortons chain contributes 40 percent of consolidated operating income, is the most exposed to the tax.

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