Study: As Operating Costs Climb, Nearly Half of Canadian Restaurants Plan for More Menu Price Hikes, Trade-Offs on Critical Equipment Upgrades

This section is The content in this section is supplied by Business Wire for the purposes of distributing press releases on behalf of its clients. Postmedia has not reviewed the content. by Business Wire Article contentEconoLease’s 2026 Hospitality Operator Report found that restaurants’ most critical equipment breaks down the most, and many operators say they can’t afford to upgrade or replace it

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VANCOUVER, British Columbia — Canadian restaurants are facing mounting cost pressures, reshaping everything from menu prices to equipment investments, according to new research from EconoLease, a leading Canadian provider of equipment financing solutions for the hospitality industry.

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The majority (80%) of Canadian operators have raised menu prices in the past 12 months, while nearly half (49%) plan to raise them again over the next year. Ongoing financial strain is forcing hard trade-offs, with about half (46%) of operators delaying a planned equipment upgrade in the past year because they can’t afford it, even though it’s critical to their business.

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This is according to EconoLease’s 2026 Hospitality Operator Report, developed in partnership with Leger. The report surveyed 250 Canadian foodservice and hospitality operators to determine the top financial strains impacting their businesses today and their outlook for the year ahead.

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The past year has been marked by continued economic disruption, increasing operating costs for restaurants already working with thin budgets. Compared to their U.S. peers, fewer Canadian operators saw profitability improve.

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Over the past 12 months:

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• The typical Canadian operator reports a median overall cost increase of 7.5%, but three types of establishments — cafés or bakeries, fast-casual, and full-service or casual dining restaurants — each report a higher median increase of 15.5%†.
• Operators saw the steepest cost increases in food and beverage supply (64%), labour and wages (55%), and rent and occupancy (32%).
• Fewer Canadian operators saw improvement in their margins compared to their U.S. peers (42% in Canada vs. 64% in the U.S.).
• Despite the pressure, 83% of Canadian operators feel optimistic about the year ahead, though the results are mixed across the different establishment types.
  • Fine dining operators (89%†) and full-service or casual dining operators (88%†) are most optimistic, while 27%† of franchise operators are pessimistic, roughly double the national pessimism rate of 14%.

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Over the next 12 months, Canadian operators’ top business threats are rising food and beverage costs (55%), economic uncertainty or recession risk (41%), labour shortages or rising wages (37%), declining consumer spending (35%), and tariffs or supply chain disruptions (19%).Operators can’t afford to fix the equipment they need most Every restaurant depends on working, reliable equipment to serve its communities. However, many operators can’t afford to fix their most critical equipment, increasing their risk of lost profit when that equipment breaks down during service.

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• Cooking equipment such as ovens, ranges, and fryers is the biggest bottleneck for operators, cited by 28% of respondents, followed by refrigeration (14%).
• Operators name refrigeration (60%), cooking equipment (58%), and point-of-sale and technology hardware (38%) as the most critical to their daily operations, so the categories they can’t afford to lose are also among the most failure-prone.
• The typical Canadian operator spends a median of $22,500 CAD a year on equipment maintenance and repair.
• With the high price tag, 29% of operators said they want to upgrade their equipment but can’t afford it, and 46% delayed a planned equipment upgrade in the past year due to costs.
• The upgrades that operators want the most are energy-efficient cooking equipment (44%), smart refrigeration with monitoring and alerts (41%), and integrated POS and kitchen-display systems (37%).
• The majority (80%) of Canadian operators say the ability to change or upgrade equipment at any time, without paying full price upfront, would help their operations run more smoothly.

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“I ran a café of my own before I ever worked in financing, so I understand the risks when a piece of equipment fails, or you’ve outgrown your current appliances, and you don’t have the cash to fix it or upgrade,” said Tyrone Ho, President of EconoLease. “As bills continue to pile up, operators need the flexibility to get the equipment when they actually need it and to adjust as their business changes. That’s the problem Rent-Try-Buy was built to solve.”

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The financial pressure begins before operators ever open their doors, with many overshooting their budgets as they face surprise costs.

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• The median cost to open a hospitality business in Canada is $325,000 CAD, with café or bakery, fast-casual, and full-service or casual dining operators all reporting the same median startup cost†.
  • The most expensive types of establishments to open are hotels with foodservice ($750,000 CAD†) and franchise operations ($750,000 CAD†). Meanwhile, the least expensive is a catering company at $212,500 CAD†.
  • Opening a café or bakery in the U.S. is cheaper than in Canada ($325,000 CAD† in Canada vs. about $139,000 CAD† in the U.S.).
• More than one in four (26%) Canadian operators said their startup costs exceeded their original budget by 10% or more, while 88% were surprised by at least one startup cost.
• Commercial kitchen equipment (41%), fit-out and renovations (37%), and rent, lease, and loan deposits (28%) were the expenses most likely to catch operators off guard.
• Only 37% of Canadian operators turned a profit within their first year, compared to 59% of their U.S. peers.