Kelly Higginson, Managing Director of Restaurants Canada, said it was an “alarming” trend for the food service industry. She said that particularly the younger generation was “who we will really address more and more when they grow into the main consumer of the population group.” The report showed that younger Canadians took higher importance for price, value and luxury in comparison with older Canadians.
Rising costs and weaker expenses -Squeeze -restaurant profits
The restaurants have slowed themselves down in comparison with pre-Pandemic values. Canadians are expected to spend $ 1,035 in full service restaurants and $ 1,135 in Restaurants Quick Service this yr. In 2019 she spent $ 1,165 or $ 1,150.
Since fewer people admit, the sale of alcohol in restaurants has also slowed down on account of increasing menu prices and a shift of the patron towards wellness. Forty -one percent of the Canadians surveyed stated that their alcohol consumption decreased last yr.
“Since our operators drink less or see no alcohol, it makes it even more difficult to concentrate on these values ​​that Canadians currently need and also make a certain profit at the end of the day,” said Higginson.
The sales within the food service industry are expected to attain $ 124 billion this yr. However, if inflation is adjusted, growth stays relatively subdued.
While consumers withdraw expenses, firms also take care of increasing operating costs. The cost of food, staff, insurance firms and provide firms grew in double digits between 2023 and 2025, the report says. The report showed that 41% of firms worked or break with loss by June 2025.
“In the past five years, our operators have really been brought into a pressure cooker about how to remain viable as a profitable business to keep the doors open and continue to serve the employees and serve the communities in which they are located,” said Higginson.
If population growth slows down, the industry faces a scarcity of labor. According to Higginson, restaurants in rural and distant areas can have the worst effects. She said that essential positions akin to a cook or a baker within the early morning are harder to fill out rural areas, which then affect the restaurant.
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Restaurants rotate on brunch and snacks when the demand for dinner falls
Many restaurants attempt to adapt to the difficult operating environment by changing the menus to scale back waste and operate a number of hours on slow days to scale back the prices. Some firms serve brunch as an alternative of offering dinner services since the demand for breakfast has increased, said Higginson. “Due to the lack of discretion, Canadians increase their expenses for the breakfast segment and less for dinner, which tends to be a bit more expensive,” she said.
The turnover with the lunch break in quick-service restaurants rose in the primary five months of 2025 by 7.6%-numerous pre-pandemic levels that reflect the mandate of return to Office and a shift within the direction of value. “This really affects our operators because dinner used to be a bit more profitable for our operators,” said Higginson. “Now they make these two segments, breakfast and lunch less profit.”
There can also be a shift within the industry to capture the snack trend, especially in the short service restaurants. Dinner and evening snack traffic rose by 3.4% and 4%. The report showed that snacking was most typical as a substitute for meals for younger generations.
Higginson said that the snack segment was a likelihood to profit for the industry. “It is really time for this soft restart and a look at where we can meet our consumers where they are,” she said.
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