A recent survey suggests that many restaurants are experiencing financial challenges due to reduced foot traffic and escalating operational expenses. According to a survey conducted by Restaurants Canada, 26% of the restaurants assessed were operating at a loss in November 2025, while an additional 18% were barely breaking even. This indicates that a total of 44% of respondents were not generating profits, a significant increase from the 12% reported in 2019.
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, highlighted the impact of these financial struggles on employment and the potential for increased restaurant closures.
The survey identified food and labor costs as the primary concerns for restaurant owners, with 89% expressing worries about labor expenses and 88% citing the rising cost of food as a major issue. Inflation, particularly affecting food prices, was noted to be significant, with grocery prices experiencing a 5% increase in December compared to the previous year.
‘It’s mentally exhausting’: chef
Food economist and University of Guelph professor, Mike von Massow, acknowledged the challenges faced by Canadian restaurant owners, attributing the struggles to the double impact of rising food costs on businesses and consumer spending habits. The competition with grocery stores adds to the difficulty, as increased grocery prices may deter customers from dining out.
Owners like Frederic Chartier, the proprietor of Beyond the Gate in Shelburne, Ont., have resorted to various measures to cope with the financial strain. Chartier, who has seen a decline in customer numbers, had to take on additional roles and even a part-time job to maintain his business.
Some owners might raise prices
Given the tight profit margins, surveyed restaurant owners anticipate an average price increase of four percent in 2026. Balancing the need to cover costs with retaining customers is a delicate task, as noted by Higginson, who emphasized the challenges faced by members in responding to financial pressures while maintaining consumer affordability.
Efforts to mitigate the need for price hikes include offering value meals and introducing mid-level options for cost-conscious customers. Previous surveys indicated that a significant portion of Canadians are dining out less frequently due to financial concerns.
Chartier, who has made incremental price adjustments over time, hopes for government interventions to alleviate the financial burden on consumers and stimulate spending on dining out.
The survey also highlighted the positive impact of the federal government’s GST holiday and the boost from domestic tourism on restaurant finances. However, Restaurants Canada advocates for further government support, including the removal of federal GST on all food items, to aid struggling restaurants nationwide.
Recognizing the widespread implications of restaurant financial struggles, Higginson emphasized the potential ripple effects on communities, job losses, and economic stability.
