Eating places Canada chief government Kelly Higginson stated it’s an “alarming” development for the foodservice trade. She stated the youthful technology specifically is “who we’re actually going to be concentrating on increasingly as they begin to develop into the principle shopper of the demographic.” The report discovered youthful Canadians positioned greater significance on worth, worth, and comfort in contrast with older Canadians.
Rising prices and weaker spending squeeze restaurant earnings
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 have 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 shopper shift towards wellness, the report discovered. Forty-one per cent of Canadians surveyed stated 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 deal with these worth meals that Canadians want proper now, and likewise have the ability have some revenue on the finish of the day,” Higginson stated.
Gross sales within the foodservice trade are projected to achieve $124 billion this 12 months. Nevertheless, 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 stated. The report confirmed 41% of companies have 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 how you can stay viable as a worthwhile enterprise with a purpose to preserve the doorways open and to proceed to employees and serve the communities that they’re in,” Higginson stated.
As inhabitants progress slows, the trade is dealing with a labour scarcity. Higginson stated eating places in rural and distant areas will see the worst results. She stated key positions, reminiscent of a cook dinner or an early morning baker, are more durable 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 troublesome 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 stated. “Due to the shortage of discretionary spending, Canadians are growing their spend on breakfast phase and fewer on dinner phase, which tends to be a bit costlier,” she stated.
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 basically does affect our operators as a result of the dinner was once a bit extra worthwhile spending for our operators,” Higginson stated. “Now, they’re making much less revenue off of these two segments, breakfast and lunch.”
There’s additionally a shift within the trade to seize the snacks development, 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 stated the snack phase is a chance for the trade to capitalize on. “It truly is time for that tender reboot and having a look at the place we will meet our shoppers the place they’re at,” she stated.
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