As inflation continues to climb in Canada, restaurateurs are looking for ways to keep their dining rooms full and their profit margins high. With supply chain shortages and skyrocketing prices for items like lettuce, it can be a challenge to balance a superior customer experience with a healthy bottom line.
Unfortunately, food costs have already risen to record-breaking highs, and there is no relief in sight for 2023, with experts predicting a further increase of five to seven per cent.
The good news is that recent reports indicate that, given the current inflation rates, 85 per cent of consumers understand higher prices at their favourite businesses. However, according to that same report, 73 per cent of Canadian restaurateurs are not planning to raise menu prices through the holiday season. So, even though customers are expecting to see higher pricing, restaurants are not planning to go that route through the holidays.
Rather than raising their prices, many restaurants are getting creative with their dishes and ingredients, finding new supply sources, making the most of underused ingredients, adjusting portion sizes, and more.
While the foodservice industry has been in recovery mode these last 12 months, NPD Group reports that the growth has been slow and steady. In the third quarter, visits to restaurants were up six per cent and traffic was up 12 per cent over last year.
“Despite the current headwinds, the biggest news is that the foodservice industry recovery endures,” says Vince Sgabellone, foodservice industry analyst at NPD Group. “Canadian consumers are continuing to return to restaurants, helping to reduce the deficit of visits that have accumulated since the start of the pandemic.”
Perhaps by keeping menu prices at the status quo, restaurateurs can encourage enough traffic through the season to continue the slow and steady road to reaching pre-pandemic levels.