Bumps In The Road To Recovery
Restaurants Canada has released its 2022 edition of Foodservice Facts, presenting the latest foodservice statistics, trends, forecasts, detailed analysis and invaluable insights for industry leaders.
The theme, “Reset. Revive. Redefine” tells a story of a bumpy road to recovery due to rising expenses, low customer counts, high debt, and low profitability.
Christian Buhagiar, President and CEO of Restaurants Canada, said that: “While nominal sales are expected to return to pre-pandemic levels before the end of the year, traffic still remains below what it was before. Restaurant operators are struggling financially, with half of our operators operating at a loss or just breaking even.”
There are some positive signs. Public opinion surveys tell us that restaurant consumers are generally happy:
- 90% of Canadian consumers said they still receive good value for their dollars from restaurants
- 89% feel comfortable eating indoors at a full-service restaurant
- 74% have a positive view of foodservice workers, the highest of any private sector industry
Despite the long list of setbacks and challenges, the foodservice industry remains resilient and focused on the light at the end of the tunnel.
Chris Elliott, Senior Economist, Restaurants Canada, noted that: “Throughout the past two and a half years, the foodservice industry has developed ‘operational calluses’”, said Chris Elliott, Senior Economist, Restaurants Canada. These calluses have made us better able to withstand any future hardship or challenge that may come our way. Lessons learned from the pandemic have made foodservice operators more resilient and innovative than ever.”
Though foodservice remains one of Canada’s top employers, challenges filling labour vacancies leave the industry lagging behind other national industries when it comes to job recovery.
In June 2022, there were 171,715 job vacancies in the foodservice industry, a threefold increase from pre-pandemic levels. Restaurant operators are shifting business models to navigate the labour shortage:
- 72% increasing hours worked by ownership and management-level staff·
- 64% reducing hours of operation
- 77% raising wages
Pandemic incurred debt continues to wipe out profit margins and based on a survey of independent full-service restaurants:
- 85% of independent full-service restaurants took on new debt due to COVID-19
- 23% had debt of less than $50,000
- 44% had taken on debt between $50,000 and $100,000
- 35% had debt greater than $100,000
Given the accumulated debt and low profitability, it has become difficult for businesses to pay back loans.
Rising food costs are among the top challenges currently facing foodservice operators across the country and these rising food costs are being reflected on menus. The average quick-service restaurant menu prices are up 6.7 per cent, and full-service restaurant menus are up 6.5%. Alcohol prices at licensed establishments rose by 3.8%.
Go to www.restaurantscanada.org for more.