Independent full-service restaurants (FSRs) in Canada have reported stronger customer traffic, but higher food and labour costs are weighing on them, according to a new report from restaurant software company TouchBistro.
The findings were based on a survey of 600 independent FSR operators across the country.
Around 79% of respondents said they saw an increase in restaurant visits over the past year while 71% reported raising menu prices during the same period.
The survey found labour remains a major cost concern. Nearly all operators (94%) said they are spending more on labour than they were a year ago.
Operators are also spending an average of 37% more on food, driven by the impact of tariffs.
TouchBistro chairman and CEO Samir Zabaneh said: “In a challenging year defined by intense labour shortages and rising food costs, Canadian restaurants proved that adaptability is the new competitive advantage.
“The most successful operators aren't waiting for conditions to improve; they are taking control through strategic technology investments that enhance their operations and make their teams more productive while preserving what matters most: genuine human hospitality and connection.”
The survey found that debt is common across the sector. Nearly three-quarters (73%) of operators carry debt, and 45% said they had taken out loans or applied for financing in the past 12 months.
Despite the challenges, sentiment remains largely upbeat. A strong majority of operators (82%) said they are optimistic about their restaurant’s future.
In addition, 79% of Canadian operators reported that tariffs and trade restrictions have added to inventory difficulties.
Rather than cutting staff, many operators are turning to technology to improve efficiency and flexibility.
Tools such as QR code menus (39%) and QR payments (33%) are being used to reduce time spent on routine tasks.
Labour management platforms are being deployed to forecast staffing needs, refine schedules and better control overtime.
Nearly all operators (95%) said they use a POS system. Looking ahead, the report says AI is emerging as the next phase of operational adaptation, with nearly four-in-five (79%) operators expressing a positive view of AI’s potential.
