Navigating Economic Pressures in 2025

2025 stands out as a memorable year marked by an affordability crisis, annexation threats, tariff disputes, and declining consumer confidence. Restaurants across Canada grappled with these pressures as diners adjusted habits to stretch limited budgets.

Sales increased overall, yet rising costs offset gains, leading to widespread profitability struggles. About six in ten operators reported profits far below expectations, according to Chris Elliott, chief economist and vice president of research at Restaurants Canada.

Mustafa Aydin, co-owner of NEV Turkish Cuisine in Waterloo, which opened in 2024, described the year as particularly grueling for a startup. ‘When we look at the bills in January 2025…some of the costs are up maybe 30 per cent for beef. In general, 15 to 20 per cent, easily,’ Aydin stated.

Consumer Cutbacks Hit Dining and Delivery

A recent Angus Reid survey shows Canadians primarily manage discretionary spending by reducing restaurant visits and food delivery orders. While some shifted toward affordable options like burgers and pizza, even quick-service outlets felt the pinch.

‘Quick service restaurants [were] generally immune from recessions. That’s no longer the case. What we are seeing [from newer data] is the affordability issue is impacting all segments of the food service industry right now,’ Elliott explained.

For Chef Stephanie Soulis, owner of Little Mushroom Catering and Dining Lounge, customer traffic and sales became erratic. ‘There’s no rhyme (nor) reason. The biggest trend is history is out the window,’ Soulis said. ‘We can’t compare month-to-month anymore.’

Prioritizing Quality, Price, and Value

Diners weigh food quality, value, and price as key decision factors, whether at fine dining spots, family eateries, or local takeout joints. Emily and Oscar Claros, who assumed ownership of the Cambridge Restaurant last year—one of Waterloo Region’s oldest establishments, operating for about 60 years—responded to budget constraints with a value menu featuring smaller portions.

‘What we’re trying to do is make sure the value of all of our food is very accessible to everyone,’ Oscar Claros noted. ‘We have a value menu with smaller portions that has been very popular.’

As a newcomer, NEV Turkish Cuisine turned to delivery platforms to draw in budget-minded customers. ‘It’s a different community there. They’re mostly price conscious. They go with the promotional items maybe 80 per cent of the time,’ Aydin observed.

Despite menu price hikes, initiatives like ‘Elbows Up’ amid annexation concerns boosted sales at Canadian-owned venues. Local operators also saw growing interest in domestic ingredients, wines, and spirits.

Evolving Dining Trends

With Millennials and Gen Z comprising over 40 percent of Canadians, preferences from these groups shape industry shifts, as outlined in Restaurants Canada’s annual report and Dalhousie University’s AgriFood Lab findings.

Key trends include:

• Snacks as meal replacements: At least half of Millennials and Gen Zs substitute one weekly meal with a purchased snack.
• Breakfast and lunch outings: Office returns drive more breakfast visits to full-service restaurants and busier lunch periods at quick-service locations.
• App-based orders: Delivery demand grows, with over 70 percent of Gen Zs and Millennials ordering fast food via apps, and more than 60 percent of Millennials and Gen Xs requesting table-service meals monthly.
• Solo dining: Nearly half of Canadians have dined alone at restaurants, with solo reservations up 28 percent.
• Global and inclusive options: Demand rises for halal-friendly, plant-based dishes, and international cuisines, appealing across backgrounds.

‘We’re getting more and more people being okay with trying things,’ Soulis added. ‘Then, they’re more likely to go…‘Oh well, I tried saag paneer here, and I liked it, so I want to go try the authentic thing now.”

2025 Achievements in the Industry

The year also featured standout successes. Emily Duffin secured Baking Gold at Skills Ontario and, alongside Nhan Huynh, represented Canada at the Junior Pastry World Cup in Rimini, Italy, earning Best Team Creation and Passion awards.

Jeremy Langemann, executive chef at Bingeman’s, claimed the International Caterers Association’s Chef of the Year title. Mountainoak Cheese won three Sial Canada cheesemaking honors.

Odd Duck and Langdon Hall earned Michelin recommended status, while Faye MacLachlan of Langdon Hall was named Michelin Toronto’s Sommelier of the Year. La Lola Tapas Bar in Kitchener received the Restaurants from Spain Certification for its authentic, high-quality Spanish offerings.