By any measure, it’s a tough time to be in the restaurant business in Canada. A new report from Restaurants Canada paints a sobering picture: three out of four Canadians are eating out less, and among 18- to 34-year-olds the very customers who should be shaping the industry’s future fully 81 percent are staying home more often.
The reasons aren’t surprising. Inflation and high living costs have left people counting every dollar. Younger diners, especially, are laser-focused on price, value, and convenience. They’ll happily skip a night out if it means saving a few bucks or avoiding a long wait. That shift is already showing up in the numbers: per-person spending at full-service restaurants this year is projected at $1,035, down from $1,165 in 2019. Quick-service spots will barely hold steady.
This is not just about fewer reservations. Alcohol sales, once a reliable profit center, are shrinking as more Canadians embrace wellness or simply balk at cocktail prices. Forty-one percent say they’re drinking less than a year ago. For restaurants that have long relied on margins from wine or beer to offset slim food profits, that’s a direct hit.
Meanwhile, the cost of running a restaurant keeps climbing food, labour, insurance, utilities all rising by double digits since 2023. It’s no wonder 41 percent of businesses are operating at a loss or just breaking even. Layer on a slowing population and a stubborn labour shortage, especially in rural areas where finding a cook or early-morning baker is already a challenge, and you’ve got an industry under real strain.
But here’s the thing: Canadian dining culture isn’t disappearing. It’s evolving. Breakfast traffic is rising, with brunch replacing dinner as the social meal of choice. Lunch sales at quick-service spots are up 7.6 percent in the first five months of 2025, boosted by return-to-office mandates. Even snacking is becoming a meal replacement, especially for younger Canadians.
The message is clear: restaurants that cling to the old dinner-centric model are going to struggle. Operators need to adapt menus to reduce waste, adjust hours to match demand, and get creative with lower-cost, higher-value offerings. Capturing the “snack segment” may sound unglamorous compared with a three-course supper, but if that’s where customers are headed, smart restaurateurs will meet them there.
Canada’s foodservice industry is at a crossroads. The appetite is still there it’s just different. Those who treat this moment as a chance for a “soft reboot,” as Restaurants Canada’s CEO Kelly Higginson put it, may find that the future isn’t bleak after all. But waiting for diners to return to old habits is a recipe for failure.
