Restaurants Post Strong Margins in Uneven Recovery: TouchBistro’s 2026 Canadian State of Restaurants Report

National survey finds the majority of independent full-service operators are leveraging technology and AI to overcome intense labour shortages and rising food costs

TORONTO--(BUSINESS WIRE)--Toronto-based all-in-one restaurant management system, TouchBistro, today releases its inaugural 2026 Canadian State of Restaurants Report. The report surveys 600 independent full-service restaurant (FSR) operators from across Canada, showing the impact of last year’s economic volatility and tariffs, skyrocketing food and labour costs and rising use of technology to help build resilience.

Key findings include:

• 79 per cent of Canadian operators saw an increase in restaurant visits this past year
• Operators are spending an average of 37 per cent more on food costs due to the impact of tariffs
• 71 per cent have raised menu prices in the past year
• Nearly all (94 per cent) are spending more on labour costs compared to last year
• 79 per cent of independent operators feel positive about the use of AI in restaurants

"In a challenging year defined by intense labour shortages and rising food costs, Canadian restaurants proved that adaptability is the new competitive advantage," said Samir Zabaneh, Chairman and CEO of TouchBistro. "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."

Uneven Economic Recovery
On the surface, restaurants are performing well: profit margins average a healthy 10.4 per cent, and customer traffic is up 34 per cent as return-to-office brings diners back. However, outcomes vary sharply by location and venue type.

Overall, nearly three-in-four (73 per cent) of operators carry debt, and 45 per cent of operators took out loans or applied for financing in the past year. However, geography is a major dividing line. Vancouver operators are 80 per cent more likely to seek financing than those in Calgary, reflecting higher operating costs and capital needs. Calgary restaurants, meanwhile, struggle to attract new customers in an already dense market, while Toronto operators are seeing more modest traffic gains amid intense competition. These differences shape how businesses survive and grow.

Venue type further exposes the uneven recovery. Brasseries, bistros and cafés are benefiting directly from weekday office traffic with return-to-office mandates. They outperform the market with margins averaging 11.2 per cent and a 40 per cent increase in visits, well above the national average (34 per cent). Bars and grills lag behind, hit harder by tariff-driven price increases on imported wines and spirits that disproportionately affect beverage-led restaurants.

In short, restaurants are operating efficiently, and a vast majority (82 per cent) said they are optimistic about their restaurant’s future. However, recovery is uneven. Where an operator is located, and what type of venue they run, plays a decisive role in whether growth comes easily or must be financed.

Labour and Food Costs
In 2025, Canadian restaurant operators grappled with two major cost pressures: food and labour. Nearly half (45 per cent) cite rising food prices and inflation as their top inventory challenge, and 79 per cent of Canadian operators report that tariffs and trade restrictions contributed to inventory challenges, spending an average of 37 per cent more on food costs.

To offset these pressures:

• 71 per cent of operators raised menu prices by an average of 13 per cent, and many adjusted portion sizes or simplified dishes.
• Almost half (43 per cent) plan to increase locally sourced ingredients over the next six months to reduce tariff exposure and strengthen supply chain resilience.

Labour costs are equally challenging. Nearly all operators (96 per cent) report higher labour expenses than last year, and staff shortages exacerbate the problem. Almost four fifths (79 per cent) of operators report gaps, averaging 5.3 missing employees per restaurant.

Rather than cutting staff, operators are leveraging technology to improve efficiency and flexibility. Tools like QR code menus (39 per cent) and QR payments (33 per cent) free staff from routine tasks, while labour management platforms help forecast staffing needs, optimize schedules, and control overtime. Cross-training (31 per cent) and productivity-focused initiatives (36 per cent) further allow restaurants to do more with existing teams, building adaptability into operations and creating resilience against ongoing cost pressures.

Optimizing Operations Through Technology
At the centre of this transformation is the POS system, now viewed as the operational backbone of the restaurant. Nearly all operators (95 per cent) use a POS system with the same proportion using the same one across all locations to ensure consistency, scalability and real-time visibility. While concerns around implementation and disruption remain, operators increasingly understand that outdated systems limit adaptability and slow decision-making.

Automation further strengthens resilience by reducing manual work and increasing speed and accuracy. Online ordering, kitchen order routing, and invoicing are the most commonly automated tasks, delivering measurable gains as operators report time savings and faster service (48 per cent and 47 per cent respectively).

Looking ahead, AI is emerging as the next layer of operational adaptability. Nearly four-in-five (79 per cent) operators feel positively about AI, with adoption focused on high-impact, behind-the-scenes functions such as reservations, inventory management, staff scheduling and menu optimization. These use cases highlight how technology and AI are being embraced not to replace hospitality, but to strengthen the operational foundation that allows restaurants to scale and remain resilient.

What Trends Should Canadian Restaurants Focus On This Year?

1. Staff-Empowering Technology Is a Must: Smart tools should reduce friction and help lean teams deliver better service.

2. Menu Flexibility Becomes Critical: Build menus that can adapt to price volatility by using POS and inventory data to track costs and guide substitutions.

3. Dedicated Strategy for Off-Premise: Develop menus, packaging, and kitchen workflows specifically for takeout and delivery.

4. Digital Discovery Drives Traffic: Create content that highlights your restaurant, interact with your audience, and ensure menus are always easy to find.

5. Invest in Smarter Tech: Focus on tools that integrate with existing systems and streamline operations instead of adding complexity.

For more insights on 2026 trends and how operators can maximize their business, the 2026 Canadian State of Restaurants Report can be downloaded for free HERE.

To learn more about TouchBistro, go to www.touchbistro.com.

About the Canadian State of Restaurants Report
We partnered with research firm Maru/Matchbox again this year to survey 600 full service restaurant owners, presidents, and area/general managers across Canada with an added focus on three key cities: Toronto, Vancouver, and Calgary. Our research was conducted from October 2 to October 25, 2025. The statistically significant survey results are accurate 19 times out of 20.

About TouchBistro
TouchBistro is an all-in-one POS and restaurant management system that makes running a restaurant easier by providing essential front of house, back of house, and guest engagement solutions on one powerful platform. TouchBistro helps restaurateurs streamline and simplify their operations, increase sales, and deliver a great guest experience. For additional information, visit TouchBistro.com.