Ongoing challenges seem to hit restaurant industry ‘one after the other’

Stressed owner of small business. (Photo courtesy of © master1305)

As the restaurant industry recovers from the latest round of provincial restrictions imposed at the beginning of the year, operators are faced with an ongoing challenge of steeper food prices and concerns that it may deter people from dining out.

Restaurants Canada Vice President, Central Canada, James Rilett said some operators may have to adjust their menu prices, if they haven’t already, due to product increases and associated costs.

Canada’s 2022 Food Price Report, released as a collaboration between several Canadian universities, states that the most significant increases are predicted for dairy and restaurants at six to eight per cent.

Rilett said they’ve noticed a steady increase in food prices, especially meat, for just over a year, however, the continuous climb is adding more pressure on operators. He said challenges seem to be hitting the industry one after the other.

“It’s just a confluence of events that is continuing to hit the restaurant industry. I think in the end, we’ll have no choice but to see menu prices going up,” said Rilett. “Nobody in the industry wants to do that. It hits customers hard and any time you raise prices, you risk losing customers. It’s the last thing we want to do but there’s not much of a choice in most cases.”

Aside from the rising cost of food and its associated costs, Rilett said other costs have been creeping up during the pandemic, such as utilities, insurance, and a bump in minimum wage.

“It seems everything is going up and everything that goes into a restaurant is being affected,” he said.

The province will cautiously lift public health restrictions over the coming months. Starting on January 31, restaurants will be able to reopen at 50 per cent capacity.

Rilett said each time indoor dining was shut down, a financial impact was felt “pretty much across the industry”. The difference with this latest shutdown in January, was the emotional toll it had on operators.

“What we’re seeing are historic levels of debt being accumulated by restaurants,” said Rilett. “This latest shutdown, coming at the time it did, it really affected people a lot and they were just tired of everything. We’re really worried about the mental health of operators and staff alike.”

Restaurants Canada has been calling on different levels of government for further support. A Restaurants Canada survey conducted last summer, found that eight out of 10 independent restaurant operators took on debt due to the COVID-19 crisis.