A new report shows Canadian restaurants are under pressure as consumers steer away from dining out, while rising operational costs squeeze profit margins.
“Seventy-five percent of Canadians are eating out less, and that number grows to 81 per cent for young people under the age of 25. They’re just not eating out as often as they used to,” said Mark von Schellwitz, Western Canada Vice President for Restaurants Canada.
The report suggests more than 40 per cent of restaurants are either operating at a loss or just breaking even as of June 2025.
“The other thing that is concerning is that we’ve seen a real drop in alcohol consumption, where we’ve seen a 41 per cent decline in people ordering alcohol from restaurants, which is a bit of a concern,” von Schellwitz told CityNews.
Restaurants Canada says establishments are feeling pressure to raise prices, reduce staff, change menus, and adjust their store hours to keep up with the rising costs of operations.
On the street, many people tell CityNews the high cost of living is forcing them to watch their finances and dine out less often.
“I think cost is definitely a factor, which is why I want to eat in,” said one woman. “So I can save money.”
However, it’s not all bad news for restaurants as the report shows a roughly eight per cent increase in lunch traffic and an increase in domestic tourism, which could help with more dinner reservations.
The manager of a restaurant in downtown Vancouver says she’s finding her own ways to attract guests, including student discounts targeting nearby colleges.
“We usually sell more alcohol when it’s [related to] an event. We have karaoke on Fridays, and the biggest selling items are alcoholic,” said Diana Navarro at Gastown’s Sabina Mexican Food.
Like many establishments, they also offer reduced “happy hour” menu pricing to draw more customers during off-peak times, which Navarro says brings in office workers in the area.
source & photo: CityNews
