Things appear to be going from bad to worse with Canada’s economy, impacting the food services industry.
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Persistent inflation, rising food prices, and U.S. tariffs are conspiring to slow Canada’s economy and clobber the country’s restaurant industry. A new study has found that about 7,000 restaurants, diners, and pubs shut down in 2025, and another 4,000 are forecast to close their doors this year.
The study by Dalhousie University in Halifax, Nova Scotia says that Canadian consumers are pulling back on discretionary spending and eating out less often. At the same time, Canadians are becoming pickier about where they eat and more frugal with their food budgets.
Implications for Restaurants in Canada
While the majority of restaurants shutting down are independently owned, the situation in Canada has implications for publicly traded restaurant chains that operate in the country. From homegrown companies such as Restaurant Brands International (QSR), which owns the Burger King hamburger and Popeyes chicken chains, to Chipotle Mexican Grill (CMG), which is expanding across Canada.
Canada is also a major market for restaurant chains such as McDonald’s (MCD) and Starbucks (SBUX). In fact, Starbucks announced last fall that it is closing 50 locations throughout Canada, mostly in the major cities of Toronto and Vancouver, due to slumping sales and chronic underperformance.
News of the widespread restaurant closures comes as Canada’s unemployment rate rose 0.3 percentage points to 6.8% in December as the country’s labor market deteriorates and more people look for work.
Is QSR Stock a Buy?
Restaurant Brands International’s stock has a consensus Moderate Buy rating among 20 Wall Street analysts. That rating is based on 11 Buy, eight Hold, and one Sell recommendations issued in the last three months. The average QSR price target of $76.57 implies 12.50% upside from current levels.
