A recent survey suggests that many restaurants are facing financial challenges due to reduced foot traffic and escalating expenses. The study, conducted by Restaurants Canada, involved 220 restaurant members in late 2025. Findings revealed that 26% of the surveyed restaurants were operating at a loss by November 2025, while another 18% were barely breaking even. This marked a significant increase from 2019 when only 12% of restaurants were in a similar financial predicament.
Although the figures showed a slight improvement from 2024 when 53% of restaurants were either losing money or just breaking even, the current situation remains concerning. Kelly Higginson, the president and CEO of Restaurants Canada, expressed worry about the impact on jobs and staffing levels due to the financial strain. Rising costs, including food expenses, rent, and even basic supplies like cutlery, were cited as major challenges faced by restaurant owners.
The survey highlighted that food and labor costs were the primary concerns for respondents, with 89% expressing worries about labor expenses and 88% highlighting the increasing cost of food. Inflation, particularly affecting grocery prices, saw a 5% rise in December compared to the previous year, significantly impacting restaurants’ operational costs.
Economist Mike von Massow from the University of Guelph emphasized how the surge in food prices not only directly affects restaurant expenses but also indirectly influences consumer behavior, leading to reduced dining-out frequency. Restaurant owners, like Frederic Chartier of Beyond the Gate in Shelburne, Ontario, have been forced to take on multiple roles within their establishments to cope with dwindling customer numbers and revenue.
With profit margins tightening, surveyed restaurant owners indicated plans to raise prices by an average of 4% in 2026. Balancing the need to cover costs while retaining price-sensitive customers poses a significant challenge for these establishments. Several strategies, such as offering value meals or mid-range options, are being considered to attract and retain clientele.
Despite some temporary relief from governmental initiatives like the GST holiday and increased domestic tourism, the industry continues to face uncertainties. Restaurants Canada advocates for further government support, including the removal of federal GST on all food, to alleviate financial burdens on restaurant operators. Higginson stressed the widespread impact of struggling restaurants on communities and the economy, emphasizing the need for sustained assistance to prevent job losses and economic downturns.