The State of the Restaurant Industry: Why Supporting Local Dining Matters

January 23, 2025
Over the past few years, restaurants have faced unprecedented challenges. The pandemic brought lockdowns, labour shortages, disrupted supply chains, and inflation, hitting an already low-margin industry hard. Nearly 89% of restaurants accumulated significant debt, experienced unemployment spikes, or faced closures, leaving the industry vulnerable to ongoing pressures.
Behind the Numbers: The Challenges Restaurants Face
Canada’s foodservice industry is projected to reach $120 billion in 2024, but this growth masks significant struggles. Adjusted for inflation and population growth, Canadians are spending nearly 2% less, despite increased revenues. Rising costs are squeezing profit margins: food costs have risen 25%, labour by 18%, and restaurant bankruptcies have surged 45% year-over-year.
Restaurants operate with slim profit margins of just 3% to 5%, leaving little room to absorb these rising expenses. Adding to the burden, the Canada Emergency Business Account (CEBA) repayment deadline in January 2024 increased financial strain. Without access to loan forgiveness programs, many restaurants are now left navigating repayment with interest, with one in five expected to close locations as a result.
The Impact of Labour Shortages
Labour shortages remain a critical issue. During the pandemic, over 200,000 workers left the foodservice sector, and fewer young adults are entering the industry. Despite minimum wage increases and demand for workers, job vacancies remain high, with vacancies in the industry accounting for one in ten unfilled private-sector roles. Cuts to immigration streams have further deepened the challenge, as many restaurants rely heavily on newcomers to fill vital roles.
Changing Consumer Habits
Consumer behaviour has also shifted. A study by Dalhousie University found over a third of Canadians planned to dine out less in 2024, with 12% choosing not to dine out at all. Inflation has led diners to prioritize value, speed, and convenience. Yet, the desire to dine out remains strong, especially among Millennials, with 45% of Canadians eating out at least once a week.
Temporary measures like the GST and HST holiday in December 2024 provided a boost, increasing dining traffic by 18% nationwide and 23% in Ontario. However, sustained support is essential to ensure restaurants thrive.
Why Supporting Local Restaurants Matters
Restaurants are more than just places to eat—they’re central to Canada’s cultural and economic fabric. By dining locally, you’re not just enjoying a meal; you’re supporting the chefs, staff, and small businesses that bring life to our communities.
The Taste Takeaway
As we kick off the Taste of Burlington Prix-Fixe Program, running from January 27 to February 9, this is your chance to explore Burlington’s vibrant food scene while directly supporting local restaurants during these challenging times. By dining out and sharing your experiences, you’re contributing to the recovery and resilience of an industry that plays an essential role in our lives.
Let’s come together to savour the flavours of Burlington and show our support for the amazing local chefs and restaurants that make our community thrive.
For more information about participating restaurants and menus, visit https://tasteofburlington.ca/prix-fixe-program/.
Data in this article sourced from Restaurants Canada, Canadian Federation of Independent Business, and Statistics Canada.