Inflation | Restaurants are being forced to increase prices and reduce the thickness of menus

(Toronto) Canadian restaurants are raising prices, shrinking menus and cutting hours to weather inflation and labor shortages, a new report says.

Posted at 5:27pm

The industry continues to struggle financially, according to the Restaurants Canada report, as half of the country’s restaurants are operating at a loss or barely breaking even.

According to the report titled Facts about gastronomyFoot traffic to restaurants remains below pre-pandemic levels, with actual inflation-adjusted sales down 11% from 2019 results.

Hiring in the restaurant sector is lagging behind the country’s overall employment recovery, with a workforce down 171,300 in May from pre-pandemic levels.

Backroom positions such as chefs and other kitchen jobs are the most difficult to fill as most restaurants are operating at 80% capacity due to labor shortages, the report said.

Up to 15% increase

By the end of 2022, menu prices in full-service restaurants are projected to increase by 7.8% year-on-year, and about a third of establishments expect a 15% price increase.

Fast-food restaurant menu prices are expected to rise 7.1% by the end of the year.

However, according to the report, price hikes are just one way restaurants are responding to inflation.

According to the report, some establishments are also reducing the number of items on the menu, reducing portions, switching suppliers and absorbing cost increases.

“The obvious solution to rising grocery costs is simply to reduce portion sizes,” says Philman George, managing director of High Liner Foods, in the report.

“The vicious circle lies in the cumulative effect of labor shortages,” he said. As a result, the customer not only gets less food for their money, but potentially a lower level of service to which they were accustomed before the pandemic. »

Instead, George believes the restaurants that will thrive are those that address rising food costs with a “multi-pronged approach,” including creatively sourcing ingredients at lower cost and simplifying and trimming menus to reduce food waste.

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