The impact of low traffic, weak sales and rising costs continues to erode the bottom line of restaurant operators. Across all segments, nearly eight in 10 restaurants reported lower profit in Q3 2022 compared to Q3 2019. Only 14% of respondents said their profit was higher. At the segment level, there was little difference between quick- and table-service restaurants. In contrast, ‘all other foodservice’ saw a slightly greater share (20%) posting higher profits compared to 2019, but two-thirds continue to report lower profits.
Just over half of foodservice operators are currently either operating at a loss or just breaking even – a share relatively unchanged since early July. While there was little difference between segments in the share of those operating at a loss or breaking even, quick-service restaurants were more likely to earn a higher a profit. Overall, 29% of quick-service restaurants earned a pre-tax profit of 5% or more in Q3 compared to 17% of table-service restaurants.
Foodservice operators were depending on a strong summer to help their business rebound from the financial hardship of the pandemic. The expectation was that robust pent-up consumer demand, fewer cases of COVID-19 and guests gravitating towards patios would result in a much-needed boost to Canada’s beleaguered foodservice industry. While patios and restaurants were busy during the summer, it was a still letdown for many restaurant operators as their traffic, sales and profits remain below pre-pandemic levels.
Despite higher menu prices, which would have given a significant boost to overall sales, just over half (52%) of foodservice operators reported lower sales volumes in Q3 2022 compared to Q3 2019. Another 17% of respondents reported sales that were about the same as 2019, and 30% posted higher sales than in 2019.
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