(Toronto) Canadian restaurants are raising prices, shrinking menus and cutting hours to survive inflation and labor shortages, a new report says.
Posted at 5:27 p.m.
The industry continues to struggle financially, the Restaurants Canada report says, with half of the country’s restaurants operating at a loss or just breaking even.
According to the report, titled Food Service Factsfoot 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 nation’s overall employment recovery, with a workforce that as of May was 171,300 fewer than before the pandemic.
Backroom positions, such as cooks and other kitchen jobs, have been the hardest to fill, with most restaurants operating at 80% of normal capacity due to labor shortages work, the report said.
Menu prices at full-service restaurants are expected to increase 7.8% by the end of 2022, compared to the previous year, and about a third of establishments expect prices to increase by 15 %.
Fast food restaurant menu prices are expected to rise 7.1% by the end of the year.
Still, price hikes are just one way restaurants are responding to inflation, according to the report.
Some establishments are also decreasing the number of items on the menu, reducing portions, changing suppliers and absorbing cost increases, according to the report.
“The at-hand solution to rising food costs is simply to reduce portion sizes,” says Philman George, business leader of High Liner Foods, in the report.
“The vicious circle is in the cumulative effect of labor shortages,” he said. This gives the customer not only less food for their money, but also a potential decrease in service levels to which they were accustomed before the pandemic. »
Instead, George believes the restaurants that will be successful are those that tackle rising food costs with a “multi-pronged approach” including creatively sourcing ingredients at lower cost, and simplification and reduction of menus to reduce food waste.
The Canadian Press