A recent survey suggests that many restaurants are experiencing financial challenges due to reduced foot traffic and increased operating expenses. According to a study conducted by Restaurants Canada, a significant portion of the surveyed restaurants, approximately 44%, were either operating at a loss or barely breaking even as of November 2025. This figure marks a notable increase from the 2019 statistics when only 12% of restaurants faced similar financial difficulties.
The report highlighted concerns among restaurant owners regarding escalating costs, particularly in food and labor expenses. The rising prices of essential items, including groceries, have significantly impacted food costs, with a 5% increase in inflation observed in December compared to the previous year.
Experts like Mike von Massow, a food economist at the University of Guelph, note that the competitive nature of the restaurant industry, coupled with consumer spending shifts towards grocery purchases, has put additional strain on restaurant profitability. Many owners, including Frederic Chartier of Beyond the Gate in Shelburne, Ontario, have resorted to wearing multiple hats within their establishments to mitigate financial challenges.
To address these financial pressures, restaurant owners are considering price adjustments, with a projected average increase of 4% in 2026. However, balancing cost coverage with customer retention poses a significant challenge for businesses striving to remain competitive and attract diners. Some establishments are exploring alternative strategies, such as offering value meals, to cater to budget-conscious customers.
Despite various efforts to adapt, the industry continues to face uncertainties, prompting calls for government support. Suggestions include removing federal GST from all food items to alleviate financial burdens on restaurant operators and stimulate consumer spending. The impact of these financial struggles extends beyond individual businesses, affecting communities and the overall economic landscape.
The ongoing financial strain on restaurants underscores the need for sustainable solutions to support the industry and prevent further job losses and economic repercussions.