By Chris Elliott, Senior Economist (Jan. 22/16) The number one concern for Canadian foodservice operators is rising food costs, according to our latest Restaurant Outlook Survey. Seventy per cent of respondents reported higher food costs in Q4 2015, up from 60% a year ago.
Read more from our Outlook Survey, and see below for some ideas to help you cope with rising costs.
In the span of just 12 months, the Canadian dollar fell from $0.90 (U.S.) to below $0.69 last week. Plummeting oil prices and lower commodity prices, have driven the Loonie to its lowest level since April 2003, and a sharp jump in food prices is one of the results.
On a year-over-year basis in November, consumers paid more for fresh vegetables (+10.9%), fresh fruit (+9.9%), pasta products (+9.0%), beef (+8.1%) and chicken (+6.2%).
A combination of rising food prices and higher labour costs leaves many operators with no option but to raise menu prices – always a last resort, given the competitive nature of the business. The Restaurant Outlook Survey reveals that 57% plan to raise their menu prices over the next six months, while 42% will try to hold the line on prices.
Operators are already trying to hold the line on menu prices. Consumers paid 3.7% more at grocery stores in November on a year-over-year basis, compared to 2.8% more at restaurants. But menu inflation at restaurants does vary by province with some of the biggest increases seen in Atlantic Canada.
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