As we start a new month in 2024, inflation has spread far and wide across our favourite restaurants nationwide, and customers and owners feel it. The rising cost is due to the post-COVID market. The restaurant industry is more complicated than ever; an unstable economy has decreased the number of people going out for food and drinks, compounding the difficulty of paying back the CEBA loans that restaurants kept afloat during the pandemic. How are restaurants supposed to manage in this incredibly tumultuous environment?

The government created the Canadian Emergency Business Account (CEBA) to support Canadian businesses financially during the COVID-19 crisis and to keep restaurants afloat. As restaurants were one of the most heavily impacted sectors of the shutdowns, many restaurant owners sought out these government loans to help stay in operation. These loans were necessary to keep many favourite local businesses afloat during the coronavirus.

Initially distributed in 2020, CEBA loans must be repaid to the Canadian government by restaurants by January 18, 2024. Originally, that multiyear deadline seemed like a feasible timeline from the federal government; however, as January 18, 2024, has come and gone, many restaurateurs find themselves unable to pay back these loans as the market has not bounced back in the way the federal government expected. For those who failed to pay the loans by January 18, 2024, are now subject to non-amortizing term loans with full principal repayment due on December 31, 2026.

With half of restaurants either losing money or barely breaking even, this seems nearly impossible. Any fluctuation in the marketplace can help or hurt restaurants immensely, as restaurants are the epitome of “good times” for friends and family alike. Despite being years later, both the restaurant and retail industries have not fully recovered to their pre-COVID levels, in addition to the inflation seen across goods and products of all sectors, which has made the original “feasible expectations” now turned extremely difficult.

Both customers and restaurateurs are feeling the historic food inflation rate at the grocery store. According to Statistics Canada, since late 2021, grocery inflation has consistently increased and has skyrocketed to a staggering 7.8% in 2023. Food cost inflation has outpaced other types of inflation during this time and has caused changes in the budget for every Canadian.

This inflation has created a perilous negative feedback cycle in the restaurant industry. Firstly, many people have had to cut back on the number of times they eat out due to their rising food costs, it is reported that 67% of Canadians have had to cut back on the number of times they treat themselves to a nice night out on the town. Secondly, this inflation has caused a significant increase in restaurant costs, compounding the already decreasing number of times Canadians go out to eat and drink. People who find the money to go out feel increasingly challenged as their bills increase. To most Canadians, going out is now a negative incentive. With many restaurants due to default on this loan, spring 2024 will be a sad reckoning for many restaurants around Canada as financial institutions across the country will be requesting lump sums from every business. The default of these many restaurants will make this already dismal environment highly precarious for restaurants and food suppliers in Canada.

Now more than ever, cutting costs in any capacity and maximising the amount of business one can receive will be critical. AI analytics is one tool that can help improve margins by aggregating data efficiently and in an organised manner. The DYNE dashboard is the leading restaurant AI tool built with several features to help mitigate these rising costs. A few of our available features can help you optimise staffing by predicting foot traffic and streamline inventory management to reduce food waste. Additionally, it can analyse all customer reviews to get the overall sentiment to recommend positive menu and operational changes. DYNE can also be your marketing tool that uses your sales and demographics information to create AI-generated advertisement campaigns to acquire new customers while retargeting your current audience. These components work in tandem to ensure that your restaurant makes the most of each dollar spent and maximises incoming traffic to drive higher profit margins.

DYNE provides AI analytics for the restaurant industry and has a strong record of helping over 750 small business owners and enterprises cut costs and increase their customer base. The future will present unprecedented challenges, and it is only suitable to use innovative technologies to address them. Going out to restaurants with family and friends is essential to the fabric of who we are as a community. Together, we can build a more unified future where people from all walks of life can bond over food and drink the way we have for thousands of years. Book a demo today to find out how DYNE is the solution for your restaurant.