Navigating Economic Pressures in 2025
2025 proved unforgettable for the restaurant sector, marked by an affordability crisis compounded by annexation threats, tariff disputes, and declining consumer confidence. Operators adapted to shifting behaviors as diners tightened their budgets. Sales increased overall, yet rising costs eroded gains, with about six in ten operators reporting profitability far below expectations.
Chris Elliott, chief economist and vice president of research at Restaurants Canada, noted, ‘Framing 2025 presents a challenge because sales are up, but costs are up as well.’ New businesses felt the strain acutely. Mustafa Aydin, co-owner of NEV Turkish Cuisine in Waterloo, which opened in 2024, described the year as particularly grueling. ‘When we look at the bills in January 2025, some costs rose by 30 percent for beef, and 15 to 20 percent overall,’ Aydin said.
A recent Angus Reid survey highlighted how Canadians managed discretionary spending: the top strategies involved reducing dining out and food delivery. Even quick-service outlets, once resilient during downturns, faced impacts across the board. Elliott explained, ‘Quick-service restaurants were generally immune from recessions. That’s no longer the case. Affordability issues now affect all segments of the food service industry.’
For Chef Stephanie Soulis, owner of Little Mushroom Catering and Dining Lounge, customer traffic and sales became unpredictable. ‘There’s no rhyme or reason. The biggest trend is that history is out the window,’ Soulis said. ‘We can’t compare month-to-month anymore.’
Prioritizing Quality, Price, and Value
Diners consistently ranked food quality, value, and price as key decision factors, whether at fine dining spots, family eateries, or casual shawarma stands. Emily and Oscar Claros, who took over the Cambridge Restaurant in 2024—one of Waterloo Region’s oldest establishments, operating for about 60 years—responded to budget constraints with a value menu featuring smaller portions.
Oscar Claros emphasized, ‘We’re trying to ensure the value of our food is accessible to everyone. The value menu has been very popular.’ At NEV, delivery apps helped draw price-sensitive customers. Aydin observed, ‘It’s a different community there. They’re mostly price-conscious and opt for promotional items about 80 percent of the time.’
Despite menu price hikes, annexation threats spurred a sales boost through the ‘Elbows Up’ initiative, favoring Canadian-owned restaurants. Local operators also noticed growing interest in domestic ingredients, wines, and spirits.
Evolving Dining Trends
With over four in ten Canadians identifying as Millennials or Gen Z, trends aligned with their preferences, per Restaurants Canada’s annual report and Dalhousie University’s AgriFood Lab. Key shifts included:
- Snacks as meal replacements: At least half of Millennials and Gen Zs substituted one weekly meal with a purchased snack.
- Breakfast and lunch surges: Return-to-office dynamics boosted breakfast at full-service venues and lunch at quick-service locations.
- App-based ordering: Delivery demand grew, with more than 70 percent of Gen Zs and Millennials ordering fast food via apps, and over 60 percent of Millennials and Gen Xs getting table-service meals delivered monthly.
- Solo dining: Nearly half of Canadians dined alone at restaurants, with solo reservations up 28 percent.
- Global and inclusive options: Demand rose for halal-friendly, plant-based, and international cuisines, encouraging culinary exploration. Soulis added, ‘We’re seeing more people comfortable trying new things. Then they’re likely to say, “I tried saag paneer here and liked it, so I want to try the authentic version now.”‘
Standout Achievements in 2025
The year also celebrated successes. Emily Duffin secured Baking Gold at Skills Ontario and, alongside Nhan Huynh, represented Canada at the Juniores Pastry World Cup in Rimini, Italy, earning Best Team Creation and Passion awards.
Jeremy Langemann, executive chef at Bingeman’s, claimed the International Caterers Association’s Chef of the Year title. Mountainoak Cheese won three Sial Canada cheesemaking awards. Odd Duck and Langdon Hall earned Michelin recommended status, while Faye MacLachlan of Langdon Hall was named Michelin Toronto’s Sommelier of the Year. La Lola Tapas Bar in Kitchener received the Restaurants from Spain Certification for its authentic, high-quality Spanish cuisine.
