It should come as no surprise that rising food and labour costs are among the top challenges currently facing the vast majority of the foodservice industry according to Restaurant Canada’s Q1 2022 Restaurant Outlook Survey. This is a significant shift from this time last year, when only half of restaurant operators reported that they were experiencing supply disruptions, a sharp increase in their cost of sales and labour shortages.
As a result, foodservice operators said they will raise their menu prices by an average of 7.1% over the next 12 months. This is up nearly two percentage points from the 5.3% given in our previous Restaurant Outlook Survey. One-third of restaurant operators said they plan to raise their menu prices by more than 7% or more over the next 12 months, with many reporting a planned increase of 10 to 15%.
To maintain margins, table-service restaurants said they would raise menu prices by an average of 7.3% over the next 12 months, compared to an average increase of 6.0% for quick-service restaurants. In the “all other foodservice” category which includes accommodation, institutions and bars, menu prices are expected to rise by an average of 7.3%. As many respondents highlighted, they are raising their prices strategically, rather than across the board.
In terms of food prices, consumers paid significantly more for proteins and other food products at retail stores in March 2022 compared to March 2021. Foodservice operators are also seeing sharply higher prices for proteins and other food items.
For more information, click here.