Restaurants Canada Reports Continued Bumps in the Road to Recovery

Restaurants Canada’s annual Foodservice Facts guide highlights the post-pandemic aftershocks as businesses look to reset, revive and redefine the foodservice industry

Restaurants Canada, the voice of foodservice, released the 2022 edition of Foodservice Facts, presenting the latest foodservice statistics, trends, forecasts, detailed analysis and invaluable insights for industry leaders. The theme, “Reset. Revive. Redefine” tells a story of a bumpy road to recovery due to rising expenses, low customer counts, high debt, and low profitability.

“While nominal sales are expected to return to pre-pandemic levels before the end of the year, traffic still remains below what it was before”, said Christian Buhagiar, President and CEO of Restaurants Canada. “Restaurant operators are struggling financially, with half of our operators operating at a loss or just breaking even.”

“Throughout the past two and a half years, the foodservice industry has developed operational calluses that have made us better able to withstand any future hardship or challenge that may come our way.” 

There are some positive signs. Public opinion surveys tell us that restaurant consumers are generally happy:

 

• 90 per cent of Canadian consumers said they still receive good value for their dollars from restaurants
• 89 per cent feel comfortable eating indoors at a full-service restaurant
• 74 per cent have a positive view of foodservice workers, the highest of any private sector industry

 

Despite the long list of setbacks and challenges, the foodservice industry remains resilient and focused on the light at the end of the tunnel. “Throughout the past two and a half years, the foodservice industry has developed ‘operational calluses’”, said Chris Elliott, Senior Economist, Restaurants Canada. “These calluses have made us better able to withstand any future hardship or challenge that may come our way. Lessons learned from the pandemic have made foodservice operators more resilient and innovative than ever.” 

Foodservice Facts overview:

Labour vacancies continue to be problematic

Though foodservice remains one of Canada’s top employers, challenges filling labour vacancies leave the industry lagging behind other national industries when it comes to job recovery. In June 2022, there were 171,715 job vacancies in the foodservice industry, a threefold increase from pre-pandemic levels. Restaurant operators are shifting business models to navigate the labour shortage:

 

• 72 per cent increasing hours worked by ownership and management-level staff·
• 64 per cent reducing hours of operation
• 77 per cent raising wages

 

Pandemic incurred debt continues to wipe out profit margins

Based on a survey of independent full-service restaurants:

 

• 85 per cent of independent full-service restaurants took on new debt due to COVID-19 
• 23 per cent had debt of less than $50,000
• 44 per cent had taken on debt between $50,000 and $100,000
• 35 per cent had debt greater than $100,000

 

Given the accumulated debt and low profitability, it has become difficult for businesses to pay back loans.

Food costs soar bringing menu prices to an all-time high 

Rising food costs are among the top challenges currently facing foodservice operators across the country and these rising food costs are being reflected on menus. The average quick-service restaurant menu prices are up 6.7 per cent, and full-service restaurant menus are up 6.5 per cent. Alcohol prices at licensed establishments rose by 3.8 per cent.

The full report is available to all Restaurants Canada members through the Member Portal or for purchase online. Members of media interested in the full report can reach out to media@restaurantscanada.org.