A recent survey suggests that many restaurants are facing financial challenges due to decreased foot traffic and escalating expenses. The report published by Restaurants Canada revealed that as of November 2025, 26% of surveyed restaurants were operating at a loss, with an additional 18% just breaking even. This indicates that a significant portion, 44% of respondents, were not profitable, a sharp increase from 2019 when only 12% faced similar financial difficulties.
Despite the concerning figures, there was a slight improvement compared to 2024 when 53% of restaurants were either losing money or breaking even. Kelly Higginson, the president and CEO of Restaurants Canada, expressed worries about the impact on jobs and the potential for more restaurant closures. She attributed the struggles to rising costs encompassing various aspects such as food, rent, and even basic supplies like cutlery.
The survey highlighted that respondents were particularly concerned about escalating food and labor costs, with 89% worried about labor expenses and 88% troubled by the increasing cost of food. The inflation rate for grocery items saw a notable five percent increase in December 2025 compared to the previous year, while the overall inflation rate stood at 2.4%.
Mike von Massow, a food economist and professor at the University of Guelph, pointed out the dual impact on restaurant owners from rising food costs. He explained that not only do these cost increases directly affect businesses, but they also influence consumer behavior, potentially leading to reduced dining out frequency.
One restaurant owner, Frederic Chartier of Beyond the Gate in Shelburne, Ont., shared his struggles, emphasizing the challenges posed by declining customer numbers and increasing costs. To cope, he introduced incremental price hikes and even took on part-time work at another establishment. Chartier underscored the mental toll of these changes, highlighting the shift from a thriving business to a constant battle for survival.
To combat financial strains, surveyed restaurant owners indicated their intention to raise prices by an average of four percent in 2026. Higginson acknowledged the delicate balance required by restaurant owners to cover costs while retaining customers. She mentioned alternate strategies such as offering value meals and diversifying menu options to cater to budget-conscious patrons.
Chartier emphasized the need for government support to alleviate the burden on customers, suggesting that increased disposable income could boost spending on dining out. The report also mentioned the temporary relief provided by the GST holiday and domestic tourism but called for further government assistance. Restaurants Canada advocated for the removal of federal GST on all food, including restaurant meals, to aid struggling establishments nationwide.