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Restaurants Raise Prices And Shrink Portions To Manage Inflation

Restaurants in Canada are raising prices, shrinking portion sizes, and reducing their hours of operation to manage inflation and a shortage of workers, according to a new report.

Restaurants Canada says the industry is continuing to struggle financially coming out of the pandemic with half of the country's eateries operating at a loss or breaking even.

The report claims that foot traffic at restaurants is still below pre-pandemic levels with sales adjusted for inflation 11% below 2019 levels.

Hiring in the restaurant sector is also lagging Canada's overall job market, with the industry short more than 170,000 workers.

Cooks and other kitchen staff have been the hardest positions to fill, with most restaurants operating at 80% of their normal capacity due to an ongoing worker shortage.

Menu prices at full-service restaurants are expected to rise 8% by year’s end, with about a third expecting prices to climb as much as 15%. Fast-food prices are expected to increase by 7%.

Many restaurants are also reducing the number of items on their menus, shrinking portion sizes, and absorbing cost increases, according to the report.

Canadians feeling the financial pinch of inflation are reigning in their spending on restaurants or saving restaurant visits for special occasions only, said the report.