Eating places Canada chief govt Kelly Higginson mentioned it’s an “alarming” pattern for the foodservice business. She mentioned the youthful technology specifically is “who we’re actually going to be concentrating on increasingly more as they begin to develop into the principle client of the demographic.” The report discovered youthful Canadians positioned increased significance on value, worth, and comfort in contrast with older Canadians.
Rising prices and weaker spending squeeze restaurant income
Restaurant spending has slowed in contrast with pre-pandemic ranges. Per capita, Canadians are anticipated to spend $1,035 at full-service eating places and $1,135 at quick-service eating places this 12 months. In 2019, they had been spending $1,165 and $1,150, respectively.
As fewer folks dine in, gross sales of alcohol at eating places have additionally slowed due to rising menu costs and a client shift towards wellness, the report discovered. Forty-one per cent of Canadians surveyed mentioned their alcohol consumption has decreased over the previous 12 months.
“With our operators seeing much less ingesting or no alcohol, it’s making it much more difficult to have the ability to give attention to these worth meals that Canadians want proper now, and in addition have the opportunity have some revenue on the finish of the day,” Higginson mentioned.
Gross sales within the foodservice business are projected to succeed in $124 billion this 12 months. Nonetheless, when adjusted for inflation, the expansion goes to stay comparatively muted.
As shoppers pull again on spending, companies are additionally coping with rising operational bills. The price of meals, labour, insurance coverage, and utilities, amongst different bills, have grown by double digits between 2023 and 2025, the report mentioned. The report confirmed 41% of companies had been working at a loss or breaking at the same time as of June 2025.
“The final 5 years, our operators have actually been put right into a stress cooker of find out how to stay viable as a worthwhile enterprise with a view to hold the doorways open and to proceed to workers and serve the communities that they’re in,” Higginson mentioned.
As inhabitants development slows, the business is going through a labour scarcity. Higginson mentioned eating places in rural and distant areas will see the worst results. She mentioned key positions, equivalent to a cook dinner or an early morning baker, are tougher to fill in rural areas, which then impacts restaurant operations.
Eating places pivot to brunch and snacks as dinner demand falls
Many eating places are attempting to adapt to the tough working surroundings by altering menus to cut back waste and working fewer hours on sluggish days to chop prices. Some companies are shifting towards serving brunch as a substitute of providing dinner providers as demand for breakfast has gone up, Higginson mentioned. “Due to the dearth of discretionary spending, Canadians are rising their spend on breakfast section and fewer on dinner section, which tends to be a bit costlier,” she mentioned.
Lunch hour gross sales at quick-service eating places rose 7.6% within the first 5 months of 2025—topping pre-pandemic ranges, reflecting the return-to-office mandate and a shift towards worth. “That actually does influence our operators as a result of the dinner was a bit extra worthwhile spending for our operators,” Higginson mentioned. “Now, they’re making much less revenue off of these two segments, breakfast and lunch.”
There’s additionally a shift within the business to seize the snacks pattern, particularly amongst quick-service eating places. Supper and night snack site visitors grew 3.4% and 4%, respectively. The report discovered snacking as a meal substitute was most prevalent amongst youthful generations.
Higginson mentioned the snack section is a chance for the business to capitalize on. “It truly is time for that mushy reboot and having a look at the place we are able to meet our shoppers the place they’re at,” she mentioned.
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