Canadian Restaurant Sales Are Up — But Don’t Be Fooled by this . The Forecast Is A Storm Is Still Coming.

Canada’s restaurant industry just pulled off something impressive: commercial foodservice sales jumped 6.9% in the first seven months of 2025, blowing past expectations. For an industry battered by inflation, labour shortages, and affordability pressures, this sounds like a win.

But here’s the truth every small‑business restaurant owner needs to hear:

This growth is temporary — and the warning signs are already flashing.

Let’s break down what’s really happening behind the numbers.

A Summer Surge Doesn’t Equal Long‑Term Stability

The 2025 boost wasn’t driven by stronger consumer spending or a healthier economy. It came from two temporary tailwinds:

• The GST/HST holiday, which gave Canadians a short‑term spending bump

• A surge in domestic tourism, as nearly one million fewer Canadians crossed the border in July 2025 compared to December 2024 — a massive 31% drop

For the first time since 2006, more Americans visited Canada than Canadians visited the U.S. That’s great for patios and tourist‑heavy restaurants — but it’s not a foundation you can build a stable year on.

Canadians Are Pulling Back — Hard

Here’s the part that should make every operator sit up:

74% of Canadians have reduced discretionary spending this year.   And the top categories they’re cutting?

• Dining out (56%)

• Take‑out and delivery (50%)

This isn’t a blip. It’s a behaviour shift.

Consumer confidence is weak. Households are stressed. People are worried about job security and rising costs. When Canadians tighten their belts, restaurants feel it first — and hardest.

The Trade War + Slowing Population Growth = A Tougher 2026

The trade war continues to drag down economic activity and job creation. Add to that a major shift: after explosive population growth in 2023–2024, Canada’s growth is stabilizing.

Translation: You can’t rely on population increases to drive restaurant sales anymore.

This matters because population growth has been one of the only things keeping foodservice numbers afloat since 2022.

The Forecast: Strong 2025, Tough 2026

Restaurants Canada has now revised its projections:

• 2025 sales growth: 5.4% (up from 4.6% thanks to the summer surge)

• 2026 sales growth: 2.3% (down from the previous 3.4% forecast)

That’s a sharp slowdown — and a clear signal that operators need to prepare for leaner months ahead.

Growth is expected to recover gradually in 2027, averaging 3.6%, returning to pre‑pandemic norms. But 2026 will be a grind.

What This Forecast Means for Small Restaurant Owners

If you’re running a small independent restaurant in Canada, here’s the bottom line:

The market is tightening. The customer is cautious. The growth you saw this year won’t carry you next year.

This is the moment to:

• Tighten food and labour costs

• Strengthen local marketing

• Improve operational efficiency

• Build repeat business

• Audit your menu, pricing, and margins

• Stop relying on “busy seasons” to save the year

The restaurants that survive 2026 will be the ones that act now — not the ones waiting for another lucky summer.