as inflation Eating out of pocket will get even more expensive in Canada this year.
This is according to Restaurant Canada, a national food service association with about 30,000 members across the country.
Food prices set to rise by 5-7% in 2023 after record inflation year: Report
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With food prices rising amid decades of high inflation, Canadians have already seen their grocery and restaurant bills rise, and that’s only expected to continue in the new year, said Kelly Higginson, chief operating officer of Restaurants Canada. Said.
“Many operators still try to hold off on actually passing all the costs through to their customers,” he told Global News.
“Essentially, they will have to raise their prices more to continue trying to cover some of the cost increases.”
The food industry, along with travel, was one of the worst-hit sectors by the COVID-19 pandemic due to lockdowns and other coronavirus restrictions.
Higginson said that with COVID-19 measures now lifted, inflation has driven up the cost of utilities, insurance and food, making it “almost impossible” to recover and run a profitable food service establishment .
Inflationary pressures have made it difficult for Canadians to buy groceries and property and pay for gas, also affecting how much people are willing to spend at restaurants.
Higginson said, “We also know that the people coming through the door have less money in their pocket to spend … out at a restaurant and making some of these decisions that also upset the industry.” Happening.”
Inflation is forcing restaurants to change or reduce their menus and use cost-effective ingredients. Businesses will also try to maximize the use of affordable foods on the menu.
“We’re going to see a lot more of this in the coming months,” Higginson said.
Meanwhile, there is also a shift towards use of automation and tool changes due to acute labor shortages.
“We’re seeing some people change their concepts or tweak their menus so they have to have fewer cooks in the kitchen.”
What is driving up food prices?
a report issued in December by Dalhousie University, the University of Guelph, the University of British Columbia, and the University of Saskatchewan predict that overall food prices will rise an average of five to seven percent in 2023,
The increase in prices will be seen across all food groups, but vegetables are expected to see the biggest increase in cost of six to eight per cent, the report said. Along with the price of seafood, the cost of eating out at restaurants will increase by four to six percent.
“Restaurant prices will continue to rise as businesses face labor challenges from rising food costs, rising rents, and a 46.3% vacancy rate in the housing and food service industry,” the report said.
In November, grocery prices increased by 11.4 percent on a year-on-year basis. As per latest inflation report Released on December 21 by Statistics Canada.
The items that saw the biggest annual price increases were edible fats and oils (up 26 percent), non-alcoholic beverages (up 19.4 percent), coffee and tea (up 16.8 percent) and eggs (up 16.7 percent).
Food prices in Canada rose last year due to global supply chain problems caused by the COVID-19 pandemic and Russia’s ongoing invasion of Ukraine.
Extreme weather conditions have also had an impact as food production has been disrupted leading to less production.
For example, drought, heat waves, flooding and snap freezing in the United States, Canada’s top agricultural trade partner, caused prices of fresh vegetables (up 11 percent) and fruits (up 8.9 percent) to decline, According to a StatCan report published in mid-November.
Higginson said businesses will lean on social media, apps and reward programs to encourage customers to eat out
– Global News’ with files from Craig Lord and Sean Boynton.
© 2023 Global News, a division of Corus Entertainment Inc.