At The Birds & Beets in Vancouver, Matthew Senecal-Junkeer oversees a cafe-restaurant that transitions its offerings from sandwiches and coffee during the day to wine and small plates at night. Senecal-Junkeer has observed a shift in customer spending habits between day and night hours.
Customers at the café are notably price-conscious, making choices based on affordability, such as opting for oat milk over regular dairy or deciding whether to add avocado to their sandwich. Senecal-Junkeer noted a trend towards more sales of lower-priced menu items during café hours, with higher-priced items experiencing a decrease in demand.
Conversely, in the evening at the wine bar, customers seem less concerned about prices, showing a willingness to indulge in higher-priced menu items without hesitation. Senecal-Junkeer describes the evening experience as luxurious, with customers less focused on budgeting.
According to a report from Restaurants Canada, the current economic landscape reflects a “K-shaped economy,” where higher-income individuals can continue to afford dining out luxuriously, while lower-income households are cutting back on discretionary spending due to economic instability.
The report, based on a survey of 300 restaurant members in March, indicates that full-service restaurants saw a 4.6% increase in real sales in January compared to the previous year, while quick-service restaurants experienced a 2% decline. Fine dining establishments recorded the most significant growth in traffic in 2025.
Despite the growth in fine dining, many restaurants are facing challenges, with almost half reporting lower total sales and declining profitability. Quick-service restaurants, in particular, are struggling, as 81% reported declining profitability compared to 70% of full-service restaurants.
Rising costs, including fuel prices, are impacting both restaurants and consumer behavior. Quick-service establishments are facing intensified competition, with larger chains offering value meals to attract customers amidst financial challenges.
Food economist Mike von Massow explains that quick-service restaurants are likely seeing a decline in customer visits, especially among lower-income individuals who are feeling the pinch of rising prices. This trend could have implications for job opportunities, particularly for young people who often find employment in the fast-food industry.
While quick-service restaurants face challenges, fine dining establishments like Pearl Morissette in St. Catharines, Ont., are thriving. Chef Daniel Hadida notes a growing preference for high-end dining experiences as the main attraction of an evening, rather than a prelude to other activities. The restaurant, renowned for its two Michelin stars, is currently experiencing high demand, with reservations booked months in advance.
Senecal-Junkeer, facing rising food costs, grapples with the decision of whether to raise menu prices to maintain profitability. Despite cost pressures, he aims to strike a balance between volume and margin in pricing decisions.