At The Birds & Beets in Vancouver, Matthew Senecal-Junkeer’s establishment shifts from serving sandwiches and coffee during the day to offering wine and small plates in the evening. Senecal-Junkeer has observed a change in his customers’ spending habits from daytime to nighttime. Customers tend to be more price-conscious during the day, making choices based on cost, such as opting for oat milk over regular dairy or adding avocado to a sandwich. This has led to an increase in sales of cheaper menu items during cafe hours, while pricier items have seen a decline in demand.
In the evening, the price sensitivity diminishes, with customers at the wine bar showing less hesitation in purchasing higher-priced menu items. Senecal-Junkeer describes the evening experience as a luxury where customers are less concerned about minor expenses.
According to a report from Restaurants Canada, the restaurant industry is experiencing a “K-shaped economy,” where higher-income individuals can afford to dine out luxuriously, while those with lower incomes are cutting back on discretionary spending due to economic instability. Kelly Higginson, president and CEO of Restaurants Canada, notes that low-income households are the most affected by the current economic challenges, leading to reduced spending on dining out.
The report highlights a contrasting trend between full-service and quick-service restaurants. Full-service restaurants have seen a growth in sales and profitability, particularly in fine dining establishments, while quick-service restaurants have experienced a decline in sales. Rising costs, especially for fuel, are expected to impact both restaurants and consumer behavior, with quick-service restaurants serving as an indicator for broader trends in the industry.
Food economist Mike von Massow explains that quick-service restaurants are facing stronger competition, leading to a decrease in customer visits, especially among lower-income individuals. The competition from grocery stores and changing consumer habits are influencing the decline in quick-service restaurant patronage. This shift could have implications for job opportunities, particularly for young individuals who often find employment in fast-food establishments.
Despite challenges faced by quick-service restaurants, fine dining establishments like Pearl Morissette in St. Catharines, Ont., are thriving. Chef Daniel Hadida notes a growing interest in high-end dining experiences, with reservations booked well in advance. Despite the success, Hadida emphasizes the importance of maintaining fair prices for customers, considering the efforts some diners make to visit their restaurant.
For Senecal-Junkeer, balancing cost considerations with maintaining quality and customer satisfaction poses a challenge. While food costs have increased, he has opted for a modest menu price increase to strike a balance between volume and profit margins.
