Canada’s fast-food chain introduces ‘value meals war’ to entice customers
Canada’s restaurant industry is in a slump as money conscious consumers are eating out less and spending less when they do go out.
“We absolutely are seeing people come to restaurants less and the spend per visitor is down,” said Kris Barnier, vice president of central Canada with Restaurants Canada.
Barnier said inflation, higher interest rates and housing costs have been putting the squeeze on consumers and restaurants are no different.
Barnier said that many businesses are facing financial pressures due to hikes in their operating costs of 20 to 30 per cent.
Restaurants are dealing with the high cost of food, wages, rents and insurance and Barnier said that’s making it harder to keep menu prices low.
“We are at 47 per cent of restaurants across Canada that say they we are not making money and in fact we are losing money” said Barnier.
Givex Canada which works with companies to engage customers said there is currently a value meal war taking place with burger chains, sub shops and taco restaurants creating lower prices on some items.
“What we are seeing with these quick service brands is a lot of value meals, and value meal wars to entice customers to come through the door” said Mo Chaar, chief commercial officer with Givex Canada.
Chaar also said that Quick Service Restaurants (QSR) are creating dollar coffees, loyalty programs and value boxes that can go further feeding a family.
Many of the people CTV News Toronto stopped outside fast food restaurants in Scarborough said they are eating fewer fast food meals due to higher prices.
“Ever since COVID prices have literally doubled,” said one man, while another added, “You can’t afford to eat out every day these days.”
A man eating his lunch in his truck on a break from work said, “ A burger combo used to be $7 or $8, but now it’s like $15 or $16.”
Another man said he always looks for deals and if he doesn’t find one he eats at home.
“To be honest I try to go when there are coupons, but if there are no coupons I try to avoid it in general,” said the man.
Some value items are limited time deals, but others could be around to stay as chains try to find new ways to draw more foot traffic into their restaurants.
Restaurants feel that tax changes could help their industry as meals under $4 are free of the provincial sales tax in Ontario, but Barnier said that raising the tax break to a higher amount could make modest meals more affordable.
This article was first reported by CTV News
