Menu inflation moderates to 19-month low in October
According to the latest data from Statistics Canada, menu inflation in Canada slowed to 5.7% in October after holding steady at 6.1% the previous three months. This is the lowest inflation rate recorded by Statistics Canada since March 2022.
Most provinces saw lower menu inflation rates in October compared to September. Due to the high concentration of independent restaurants, menu inflation is the highest in Quebec at 7.2% in October., while Alberta boasted the lowest menu inflation rate at 4.7%.
Looking ahead, menu inflation is not expected to return to is long run average of 2.5 to 3% — at least not in the short term. According to Restaurants Canada’s latest Restaurant Outlook Survey, restaurant companies are expecting menu prices will be 6% higher in 2024 compared to 2023. With overall inflation trending down, why are restaurants expecting an uptick in menu inflation?
According to the Restaurant Outlook Survey, restaurant owners are still bracing for higher labour and food costs in 2024 compared to 2023. Nearly 6 in 10 restaurants say that labour costs will be significantly higher in 2024 compared to 2023. On October 1st, six provinces raised their minimum wage, with the biggest year-over-year increases in Manitoba (+13.3%), Nova Scotia (+10.3%), Prince Edward Island and Newfoundland & Labrador (+9.5%). The expectation of high food and insurance costs is also contributing to higher menu prices.
As the Chief Economist and Vice President of Research for Restaurants Canada, Chris Elliott manages and produces a comprehensive research program that has made Restaurants Canada a leading source of information for and about Canada’s $114-billion foodservice industry. Chris tracks and analyzes key industry and economic indicators and translates them into member reports and publications. He also provides research to support Restaurants Canada’s lobbying efforts on issues that affect foodservice operators – from payroll taxes to food costs.
Chris has worked with Restaurants Canada for over 20 years, has a Bachelor of Arts and Master Degree in Economics and specializes in economic modelling and forecasting.
