Rising operating expenses pushing up menu prices

Publié avril 22, 2021

Menu prices were 2.8% higher in March 2021 compared to a year ago. In the first quarter of 2021, menu prices have risen significantly compared to an average menu inflation rate of 2.2% in 2020. This is due to rising food costs, labour costs, combined with additional operating expenses such as PPE and insurance. For others, operating at less than optimal capacity is leading to higher prices.

While menu prices increased by 2.8% in March, prices at grocery stores rose by a much more modest 1.3%.  Historically, when menu prices rise at a faster pace than prices at grocery stores, it can result in lower traffic as price sensitive consumers go out less often to restaurants. 

At the provincial level, the largest increases in menu prices were in Prince Edward Island (+3.9%), Quebec (+3.6%), and Ontario (+3.1%). In contrast, menu inflation in Newfoundland & Labrador moderated to 1.1% in March 2021 compared to a 3.2% increase in March 2020.

The recent increase in menu prices reported by Statistics Canada aligns with our forthcoming Q1 Restaurant Outlook Survey. Nearly half of respondents said they would be raising their menu prices by 4% or more over the next 12 months, with 17% saying they will increase their menu prices by more than 7%.  

Full results from our Restaurant Outlook Survey will be released in a few weeks. 

 

Restaurants Canada Digital

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