Dinning out shifts to special-occasion spending

Added: 2026-05-12

[00:00:00]For many Canadians, [music] dining out is no longer a regular habit.

[00:00:03]Restaurants Canada's latest industry data shows affordability pressures are reducing how often people go out, while OpenTable data shows 65% of Canadians now see eating out as more of a special occasion rather than an everyday activity. For more, joining us now in studio is Kelly Higginson, president and CEO of Restaurants Canada. It's great to have you in. Thanks so much for coming.

[00:00:24]>> for having me. This is some interesting findings here. So, more than half of operators say they're seeing fewer guests. Mhm. Does this mean Canadians, they're not stopping going out, but they're saving restaurants for special occasions, right? So, like how damaging is that to the industry? Well, what we're seeing is because of that persistent and chronic affordability challenges that Canadians have been struggling with for quite some time. And then on top of that, our input costs continually to continuing to rise. Our operators are reporting that it's eroding their ability for profitability.

[00:00:52]And what we when we dug into that, it's 80% of our quick-service restaurants have seen a decline in profitability, decline in traffic, the average check is less. And then it's 71% of full-service dining has seen the same in lack of profitability. So, when we peel that back a little further, it looks like is it's that indicative of the K economy.

[00:01:12]It's the lower-middle-income Canadians that are having to pull back on their spending in restaurants because of the lack of discretionary spending being impacted by all of those affordability issues and now rising fuel costs for sure eating into their into their discretionary spending ability. When you say quick service, that's like like more like fast food kind of restaurants or or less sitting down That's right. Yeah.

[00:01:33]That's what you mean? Yes, and I mean it would be the fast food, but it is also then your cafes, anything where it's that counter service more than the sit-down experience.

[00:01:41]>> Got it. I wonder if there's any trends, like are restaurants still more full on weekends or for celebrations, but like empty midweek? Like where's the where's the is there a balance there even? There is. As what we are seeing and to your point earlier is that people are saving it for, you know, maybe that that special occasion and not able to be able to have it as that end of the week busy working family pizza at the end of the week is now actually turning into pizza once a month. So, really having to extend their periods of experiencing the restaurant purchases.

[00:02:13]I want to go back to quick service because as you mentioned your service shows like just over 80% declining profitability. I wonder what that specifically says. Like I know you were talking already about affordability. People just can't afford to do these things as much but even the quick service restaurants they do tend to be a little cheaper sometimes because you're not ordering a full meal. Maybe you're just ordering a sandwich for example. Like what does that say about consumer health habits even there? Well, it really is going back to that K economy. So, it's the lower income and middle income Canadians that would be utilizing and frequenting those establishments more often and they are having to pull back on that. There's a couple areas as well that we watch restaurants Canada couple barometers and one of them is also consumer confidence and as we see consumer confidence going down we see the pull back in spending.

[00:02:56]When we see fuel prices go up and that's for a couple reasons. One obviously this dramatic increase in fuel is really eating away at the discretionary spending. But on top of that people are traveling out less. So, we're seeing less traffic out and about. People are are really making choices around how they when and how they drive their vehicles. And your trends over the last few years do show that this is because of inflation higher prices not habits that are left over maybe from the pandemic as well or No, it's definitely connected to discretionary spending and so 23 million times a day Canadians utilize make a purchase from a food service establishment. So, we're definitely ingrained into their day-to-day habits at that kind of volume. But what we have seen is that the affordability challenges of the last couple of years as those go up then we see our spending going down because it's the first thing that Canadians have to pull back on. I'll say not that they want to but it's that they have to.

[00:03:46]Right. Yeah. I wonder then on the trickle down effect. Like what does that do for like for the restaurant industry for jobs, hours, closures that maybe we're seeing around the country? Sure.

[00:03:55]So, I think it's that's one of the really important conversations that we continue to have with government. We're the fourth largest private sector employer in the country. So, we employ more than manufacturing, auto, real estate, banking, agriculture, uh combined. All of them combined. So, what you're going to see and what our operators are telling us, the levers that they're pulling, is cutting back on shifts, cutting back on hours of operation. So, all of those things have an immediate impact on our employment levels and our opportunity to hire.

[00:04:23]They're also making thinking twice about should I be hiring? Because the first quarter of the year, I've seen this in the trend. I'm going to wait it out and make some decisions on whether I'm going to be hiring. But, the other key is that they're pulling back on things like repairs, maintenance, and scaling their operations, renovations, and growth. And that's, you know, capital investment and growth is a really important, you know, portion of our new government's mandate and plan. And when we see sectors like ours as the fourth largest private sector employer, 4% of the GDP, really having to think twice about whether they make those decisions to reinvest and to have their capital spending going, then that is where we start to see some trouble. I wonder what what it would take to kind of move the needle for this industry. Obviously, it's an affordability issue, and so some of that might be out of out of our hands. But, what else do you think maybe the government could be doing? Could we see some tax reductions? What do you think?

[00:05:13]Is there anything that could help? Yeah, absolutely. I mean, we're in constant conversations with the government. I think they're first and foremost there needs to be a recognition of this sector as the economic powerhouse and job powerhouse that we are. So, when we are putting policies together, let's recognize this sector. One of the the areas that we're talking to the government about is the GST and removing it off of all the food. The great thing about having the GST holiday that we had last year, we have some really clean clear data on what that can do. One, it addresses affordability. So, we saw an almost 10% increase in our sales, an immediate economic stimulus. We created 24,000 jobs in the month of January and February alone. Those are usually the months that we're pulling back, it's slow, we're cutting hours, there we were creating jobs. But you're also again addressing that affordability. The third piece of that is 40% of our workforce is youth. So we're also addressing the opportunity to create more jobs for youth. Is there is there a world here just just quickly before we wrap up where restaurants do need to prepare for like a permanently changed customer though as well or need to maybe adapt to the way people are spending less? I don't know if you can adapt to that. Well, >> [laughter] >> I think our operators are certainly making those changes and trying to adapt to that. But I think what we need to look at is we are a big part of Canadian's day-to-day life. We've got the top line sales. We need to work with the government to make sure that there's a way for us to bring that down to the bottom line like we were able to. Yeah, okay. We'll have to leave it there.

[00:06:36]Appreciate you coming in studio, so interesting. Thank you for that. That was Kelly Higginson, president and CEO of Restaurants Canada joining us.