More restaurant closures expected in 2026 as diners cut back, Dalhousie study warns

Thousands of restaurants could close in Canada this year. What does Windsor’s restaurant sector look like? CTV Windsor’s Travis Fortnum finds out.

A new study from Dalhousie University is warning that thousands of restaurants across Canada could close this year — and some local business owners say they’re already feeling the squeeze.

The study from Dalhousie’s Agri-Food Analytics Lab projects more than 4,000 restaurant closures nationwide in 2026, following 7,000 closures in 2025, as consumers continue to cut back on discretionary spending.

At Fryday’s Authentic Fish and Chips in Tecumseh, owner Steve Crawford said business has already dropped sharply.

“We’ve seen about a 50 per cent decline in the last three months,” Crawford said.

He said the slowdown is most noticeable during what used to be their busiest times.

Crawford said rising costs and tighter household budgets are forcing difficult choices, both for customers and restaurant owners.

Despite ongoing cost pressures, he said Fryday’s has only raised prices once in the past three years.

“We’ve cut the profits in order to keep the business going,” he said.

That strain is being felt well beyond Windsor-Essex. Sylvain Charlebois, director of the Dalhousie University Agri-Food Analytics Lab, said consumer habits are shifting as food and living costs rise.

“What we’re seeing right now are consumers under tremendous financial pressure,” Charlebois said in an interview with CTV News.

“They’re having a hard time buying food at the grocery store, so they’re not spending as much time in food service.”

He said when people do go out, they’re often spending less.

“They’re not necessarily buying an appetizer or a dessert or an expensive bottle of wine,” Charlebois said.

Restaurants Canada says 41 per cent of restaurants are operating at a loss or barely breaking even, pointing to rent, insurance, and labour costs as ongoing pressures.

For Crawford, the concern isn’t just surviving today — it’s sustaining the business long-term.

“Retirement fund keeps going down,” he said.

“That’s where we’re at with that.”