A recent research study conducted by Dalhousie University sheds light on the challenges facing Canada’s restaurant sector. Inflation and escalating food costs have led to the closure of 7,000 restaurants in the past year, with projections indicating that another 4,000 may shut down by 2026.
Sylvain Charlebois, the head of Dalhousie University’s Agri-Food Analytics Lab, highlighted the impacts of rising input and labor expenses on restaurant operators. Changes to the temporary workers program have added to the strain faced by many in the industry. Additionally, consumer behavior is shifting as people are becoming more cautious with their spending.
The effects of these challenges are being felt at the University of British Columbia, where the reduction in international student visas has resulted in decreased foot traffic for some restaurants. Candy Zhang, the manager of Beyond BBQ, noted the decline in customers, particularly in the Chinese restaurant sector.
Despite the hardships, some restaurant owners are adapting to the changing landscape. Alber Zhang, manager of The Meat Up BBQ, shared that expanding to a new location has been successful in attracting more customers and increasing revenue.
Experts in the industry emphasize the need for restaurants to regularly update their business models to stay competitive in the evolving market. Ruskin Chiang, consulting director at Dr. Restaurant Hospitality Consulting Group, stressed the importance of adapting to consumer preferences to attract new patrons.
While closures have affected a significant portion of the market, new restaurant openings continue to balance the industry’s dynamics. Looking ahead, the restaurant industry is expected to maintain stability in 2026 despite the ongoing challenges.