Restaurateurs face a winter slump amid high grocery costs

Rising grocery prices — up 4.7% year over year in November, according to Statistics Canada — and weaker customer demand are putting pressure on Canadian restaurants, and Restaurants Canada reports 41% of outlets are operating at a loss or barely breaking even.

Owners at small restaurants such as Yassou Souvlaki & Donair in Fredericton are preparing for the slower winter months while coping with sharply higher food costs. Statistics Canada reported a 4.7 per cent year‑over‑year rise in food prices in November, with notable increases for beef and coffee. Restaurant operators are also managing pandemic-era debts and tighter labour availability following reductions in some immigration streams. Industry groups say these factors are constraining margins and changing how people dine out. Key points: - Statistics Canada reported food prices rose 4.7% year over year in November, with fresh or frozen beef and coffee among the largest increases. - Restaurants Canada reported that 41% of restaurants in Canada are operating at a loss or barely breaking even, an improvement from last year but still well above pre‑pandemic levels. - Dalhousie’s Agrifood Analytics Lab projects a 5–7% decline in the number of restaurants nationwide this year, which would be about 4,000 closures and mostly affect independent operators, as reported. - Some operators are responding by reducing hours or days of operation, and larger groups report advantages from shared purchasing and staffing across multiple locations. Summary: The combined effect of higher input costs, lingering debts, and softer customer demand has narrowed profit margins across the restaurant sector and is expected to change the industry landscape this year. Undetermined at this time.