A recent survey suggests that many restaurants are facing financial challenges as a result of decreased foot traffic and escalating expenses. The study by Restaurants Canada, conducted in late 2025 with input from 220 restaurant owners, revealed that 26% of the establishments were operating at a loss by November 2025, while an additional 18% were barely breaking even. This translates to a total of 44% of respondents not turning a profit, a sharp increase from the 12% reported in 2019.
Despite the concerning figures, there was a slight improvement compared to the previous year, where 53% of restaurants were either losing money or just breaking even. Kelly Higginson, the president and CEO of Restaurants Canada, expressed worry over the impact of these financial struggles on jobs and business sustainability, predicting more closures in the industry.
The main concerns highlighted by the survey respondents were the rising costs of food and labor, with 88% expressing worries about food prices and 89% about labor expenses. Inflation, particularly affecting grocery prices, saw a 5% increase in December 2025 compared to the previous year, significantly impacting restaurant operating costs.
Food economist and University of Guelph professor, Mike von Massow, emphasized the challenging environment for restaurant owners, noting how the dual effect of increased food costs and consumer budget constraints from grocery inflation was squeezing the industry. Frederic Chartier, owner and chef of a French restaurant in Shelburne, Ontario, shared his firsthand experience of the struggles faced, including having to take on multiple roles within his establishment due to reduced customer traffic.
In response to the financial strain, surveyed restaurant owners indicated their intention to raise prices by an average of four percent in 2026. However, balancing the need to cover costs while retaining customers amid affordability concerns poses a complex challenge. Higginson highlighted efforts by some restaurants to offer value meals or introduce mid-level options to cater to cost-conscious diners.
Chartier’s experience reflected the broader trend of introducing incremental price adjustments to offset rising expenses, with the hope that government interventions could alleviate the financial burden on both restaurant owners and customers. While the industry received temporary relief from initiatives like the federal government’s GST holiday and a successful summer of domestic tourism, ongoing support, such as removing federal GST from all food purchases, was advocated for by industry stakeholders to sustain restaurants across communities nationwide.