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How Your Restaurant Can Survive Ontario’s Minimum Wage Increase

March 14, 2018

The recent changes to minimum wage laws in Ontario have caused quite an uproar within the community. In close step behind Alberta, the Government of Ontario has committed to raising the provincial minimum wage from $11.40 to $15/hour by 2019.

It is no secret that this 31.6% hike in wages have caused a fair bit of panic for Ontario restaurant owners. In fact, an alarming 95% of restaurateurs actually believe that this change will damage the very people they are trying to help.

As the restaurant industry is traditionally reliant on low-paid labor and slim profit margins, the need for proper business preparation is now mandatory for survival.

Strategy #1 – The Menu

– 98% of restaurants will raise their menu prices.

The first and most effective solution will be to re-evaluate your menu. Restaurants are getting creative with their approach to portion size, menu size, ingredients and food waste. By opting for less expensive ingredients, controlled portions and increased menu prices, restaurants will have a better chance of absorbing the increase in cost from wage changes.

Strategy #2 – The Cost of Labor

– 97% of restaurants will reduce their hours of operation.

Many local restaurants have responded to this change by limiting their hours of operation during slower periods. Paying attention to your weekly traffic can help identify peak hours of operation, allowing an opportunity to re-set business hours in response.

Adjusting your hours with this strategy in mind will help you to make smarter staffing decisions, as well as reduce expenses from those business hours that aren’t garnering as much money.

Strategy #3 – Staff Restructuring

81% of restaurants will lay off staff.

The most difficult side effect of this wage increase is that many restaurants will have to lose at least a few members of their staff. This change will especially impact smaller, family-owned restaurants who may have to pick up the burden of distributed responsibilities with a smaller team. Doing so will encourage restaurant owners to become extra selective of who they hire, to ensure the best quality of customer service and efficiency.

Strategy #4 – Technology

– 74% of restaurants will explore labor-saving tech options.

We have watched with interest as technology has infiltrated the restaurant industry and revolutionized the dining experience. With the pressure of higher wages, restaurants will turn to technology out of necessity instead of leisure. Investing in automation such as tabletop tablets, self-service screens and self-pay applications will continue to become popular restaurant advancements, making it much easier for customers to place their orders and pay their bills.

As restaurant automation is becoming a fast-growing industry, it is expected that more restaurants will find ways to automate kitchen functions (such as cooking and dish assembly) to increase productivity, lower workload and cut long-term costs.

… and finally,

Restaurant success is largely influenced by reputation. Commit to being a great employer with happy customers, interact with your local and online community, and continue cook up magic – the rest will follow.

INTERESTED IN BUILDING/RENOVATING THE RESTAURANT OF YOUR DREAMS? GET IN TOUCH WITH OUR BUILD IT by Design Toronto team to get started

CONTACT (905) 696 – 0486 OR [email protected] FOR MORE INFORMATION.

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