Restaurants Canada's annual report reveals a struggling industry

More than two years after the onset of the COVID-19 pandemic and restaurants are still struggling to recover.

The annual Foodservice Facts report, put out by Restaurants Canada, has just been released, and it paints a bleak picture of the hospitality industry.

The report is a market overview and forecast of the state of the Canadian restaurant industry, which gathers data for its reports through surveys and research.

This year’s theme for the report is “reset, revive, redefine,” and the included stats tell the story of a Canadian restaurant industry that has “a bumpy road to recovery,” primarily due to “rising expenses, low customer counts, high debt, and low profitability.”

You might also like:

The report notes that while Restaurants Canada predicts a return to pre-pandemic levels of sales in 2022, the numbers for real sales for this year (adjusted for inflation) are still 11% below 2019’s numbers.

Debts incurred by pandemic closure mandates and restrictions continue to act as an albatross around the neck of the restaurant industry, as the report notes that 85% of independent, full-service restaurants took on new debt due to COVID-19.

Couple that with high levels of labour vacancies and rising food costs due to inflation, and you have a restaurant industry that is struggling to pay back those debts because of low profitability.

According to the most recent Restaurants Outlook Survey conducted by Restaurants Canada, these rising food costs are among the industry’s top challenges.

The report notes that the cost of food has soared to its highest levels since the 1980s.

As a result, quick-service restaurant prices are up 6.7%, full-service restaurant menus are up 6.5%, and prices at alcohol establishments have risen by 3.8%, compared to prices in April 2021.

Restaurant owners are responding to these rising costs by reducing the number of menu items, “diversifying suppliers, absorbing the increase, and raising menu prices,” according to the report.

The good news?

More and more people are once again becoming comfortable eating at restaurants in 2022, with 89% of Canadians polled feeling comfortable with eating indoors compared to only 48% in 2021.

Despite the challenges ahead, the restaurant industry has become more resilient and innovative than ever, with the hope that things can only get better from here.