Increasing Costs Drive More Than One-Third of Canadian Restaurants to Operate at a Loss
More than half of Canadian restaurant owners are either operating at a loss or are barely breaking even, a new report from Restaurants Canada reveals.
Thirty-four percent of restaurants were in the red as of March of this year compared to seven percent prior to the COVID-19 pandemic, while 17 percent are only just breaking even compared with five percent four years ago, the report says. Only 12 percent of restaurant owners enjoy a double-digit profit margin.
The news comes despite a Restaurants Canada prediction that total foodservice sales would climb to $110 billion by year’s end, up from $100 billion in 2022 and 2019’s pre-pandemic sales of $95 billion.
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“This is directly related to the hangover, or the aftershocks, of the pandemic,” Restaurants Canada president Kelly Higginson told The Globe and Mail.
“We’ve got operators with a heavy amount of debt. We’ve got operators having to negotiate the same interest rate challenges that Canadians are managing on a day-to-day basis. And we’ve got heavy, heavy inflation that has just smacked the industry.”
Rising costs across the board are heavily impacting the bottom line of restaurants
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