Canadians Cut Back on Dining Out as Restaurant Margins Squeeze
Event summary
- 80% of Canadians are eating out less due to affordability pressures, up from 75% in 2025.
- Restaurant sales projected to hit $130 billion in 2026, but pre-tax profit margins average just 4.1%.
- 41% of restaurant companies are operating at a loss or breaking even, up from 12% in 2019.
- Restaurants employ 1.2 million workers and generate $2.25 in broader economic impact per dollar spent.
The big picture
The Canadian foodservice industry faces a paradox: record sales of $130 billion in 2026 coincide with severe profitability challenges, as 80% of consumers cut back on dining out due to cost-of-living pressures. The sector's thin 4.1% pre-tax profit margin highlights structural vulnerabilities, with 41% of operators barely breaking even or operating at a loss. This dynamic threatens the industry's role as a major employer and economic multiplier, generating $2.25 in broader economic impact per dollar spent.
What we're watching
- Consumer Behavior Shift
- How sustained affordability pressures will affect long-term dining habits.
- Operational Costs
- Whether restaurants can reduce costs enough to improve thin margins.
- Economic Multiplier
- The pace at which broader economic impacts emerge from reduced restaurant spending.