The increase in food prices in restaurants exceeded food inflation

Restaurant food inflation has outpaced grocery inflation for months, according to the Canadian Restaurant Association. This is a sign that business owners are still struggling with high costs. Kelly Higginson, president and CEO of the Canadian Restaurant Association, said: "When we started seeing these inflationary pressures, restaurateurs decided to pass the cost increase on to their customers. In this situation, most of the restaurants had reached the edge of the abyss and had no choice but to make this decision.

Statistics Canada reported on Tuesday that food inflation grew slowly in March, rising just 1.9 percent from a year earlier. This figure is down from February's annual rate of 2.4 percent and a far cry from the peak of food inflation of 11.4 percent in late 2022 and early 2023.




However, the price of food purchased from restaurants increased by 5.1 percent compared to last year. Restaurant owners are struggling with various inflationary pressures, including increased insurance and labor costs and high interest rates.

In its February report, the Canadian Restaurant Association announced that almost two-thirds of restaurants are losing money or barely operating.

Insolvencies in the industry last year reached their highest annual figure in a decade, the association said. The report states that one of the main challenges for restaurants has been their low sales, as consumers have turned to cutting back on unnecessary spending amid rising costs.

According to the Statistics Center, restaurant prices, along with mortgage interest, rent, gasoline and car insurance premiums, were one of the five main factors of overall inflation in March.

Overall inflation in March was 2.9%, which was slightly higher than in February. Food inflation, which includes both groceries and restaurants, was three percent.

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