Restau­rants may raise prices to keep up with soar­ing cost of food


Cana­di­ans grown ac­cus­tomed to pay­ing more for their gro­ceries shouldn’t ex­pect to find cheaper prices in the coun­try’s restau­rants.

Quar­terly fig­ures from Restau­rants Canada sug­gests that 65 per cent of the coun­try’s eater­ies re­port their food bud­gets are higher than they were at the same time last year.

They say soar­ing prices for beef, pork and pro­duce are eat­ing into al­ready ra­zor-thin profit mar­gins.

In or­der to keep up, 54 per cent of restau­rants say they’re ex­pect­ing to raise their menu prices some time in the next six months.

That’s up slightly from the pre­vi­ous quar­ter when 50 per cent of restau­rants re­spond­ing to the or­ga­ni­za­tion’s out­look sur­vey planned to raise their rates.

Spokes­woman Joyce Reynolds says restau­rants don’t make such de­ci­sions lightly, since price in­creases are an al­most sure­fire way to keep busi­ness away.

“It’s an ex­tremely com­pet­i­tive in­dus­try, and they have very price-re­sis­tant cus­tomers,” Reynolds said in a tele­phone in­ter­view. “When they try to in­crease their prices, they find that cus­tomers aren’t will­ing to pay them.”

Food prices have been climb­ing in re­cent months with the cost of beef caus­ing par­tic­u­lar con­ster­na­tion.

Ac­cord­ing to Sta­tis­tics Canada data re­leased ear­lier this month, the price at slaugh­ter for 100 pounds of Al­berta

“If we’re still busy and the res­tau­rant’s still full and there’s bums in all the seats, I wouldn’t raise prices. I’d find that re­ally hard to do un­less we were los­ing money.”

Ryan Dono­van

beef rose to $192.80 in May. That’s a 36 per cent jump from May 2014 and now stands as the high­est price on record.

Stat­sCan fig­ures also sug­gest the surge is not lim­ited to do­mes­tic meat prod­ucts.

The May con­sumer price in­dex found that over­all food prices had jumped 3.8 per cent from where they stood a year ear­lier. The year-over-year spike cov­ered all food prod­ucts. Meat costs soared 7.9 per cent, veg­etable prices surged 5.8 per cent, baked goods climbed 3.0 per cent and fruit was 2.9 per cent more ex­pen­sive.

Stat­sCan re­ported that the price in­creases had al­ready be­gun to trickle down to the coun­try’s restau­rants, with menu prices ris­ing 2.9 per cent since May 2014. This marked the sharpest in­crease in four years.

The Stat­sCan fig­ures tally with the re­cent ex­pe­ri­ence at Rich­mond Sta­tion, a down­town Toronto res­tau­rant whose menu is de­signed around lo­cal in­gre­di­ents.

Co-owner Ryan Dono­van said food costs have climbed three or four per cent in as many months de­spite the res­tau­rant’s prac­tice of buy­ing whole an­i­mals to save money.

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