Canadian restaurant owners are entering a new era – one defined by shifting consumer expectations, rising costs and the rapid integration of technology, according to data from the Square Future of Restaurants 2025 report.
The restaurant industry is investing in technology, embracing automation and AI and finding new revenue paths to combat challenges and propel growth. Meanwhile, consumers have cut back on restaurant purchases. When they do visit their favourite establishments or order takeout, they expect more convenience, value and personalization.
To understand what business owners are doing to navigate this landscape and what diners want most from dining experiences in 2025, Square partnered with Bredin to survey 500 Canadian restaurant leaders and 1,000 consumers on their habits and perspectives.
From loyalty programs to technology-powered operational efficiencies, here are the biggest trends shaping the Canadian restaurant industry this year.
Consumers are enjoying their restaurant experiences – but they now expect more.
Despite the rising cost of living in Canada, consumers are enjoying their restaurant experiences. Yes, they’ve cut back on spending – 62% of them report that they spend less on restaurant purchases — but the majority (75%) of diners rate their dining experiences positively.
While this is good news for restaurant leaders, it also means that the bar is getting higher in terms of diner expectations. Over the past couple of years, many restaurants have turned to limited-time deals to keep people coming through the door. Nearly one in four owners report offering discounts or value menu options in response to economic pressures.
At least one-third of all restaurant leaders we surveyed say they implemented eight different types of special programs to entice diners, from loyalty program discounts (43%) and value items to combo deals (40%) and discount days (39%).
These efforts have created a new standard: Nearly half (49%) of customers say they expect the restaurants they visit to add or keep value offerings in the next year. This might not be sustainable for restaurant leaders, who are planning to increase their prices in 2025. Sixty-nine percent of them say that price hikes are on the menu this year, likely in response to high food and operational costs.
To stand out and keep attracting customers, restaurants say they’ll turn to technology. A vast majority of operators (86%) want to invest in technological integrations to offer a better experience to guests. What can that look like in practice? Here’s an example. Imagine having access to real-time data through your point-of-sale (POS) system. You know which dishes sell best and which ones are less popular. You fine-tune your pricing strategy accordingly – clients might be more receptive to a slight price increase on a menu favourite than higher prices across the board. Using in-depth data to make informed decisions just helped you keep diners satisfied while protecting profit margins.
Restaurateurs want to save time, and that means incorporating technology.
Elevating the customer experience entails improving all the back-end processes that diners don’t notice until something goes wrong. Restaurant leaders are keen to invest in technology to optimize operations. Over 85% say they want solutions that help them manage workflow and real-time capacity during service. And 88% would like to invest in solutions that help them streamline orders placed online, in person and through delivery apps.
That’s because they need to save time. According to Restaurants Canada, restaurateurs are grappling with persistent labour shortages. Seventy-five percent of restaurant leaders say they spend more time on hiring compared to a year ago. And roughly an equal amount of them indicate they spend more time on every aspect of business operations we asked about than they did 12 months ago, from managing finances and cash flow to training staff.
As a result, 77% of restaurant owners are dedicating more resources to researching and implementing technology. From efficient kitchen display systems to AI-enabled staff scheduling, 2025 is all about leveraging solutions to reduce operational friction and serve customers better.
Automation in restaurants is necessary – but also divisive, if you ask customers.
Restaurant owners are already working smarter thanks to automation. Some of the most popular use cases for it are automated customer ordering systems – think, self-service kiosks and mobile apps (40%), digital kitchen display systems to streamline order processing (40%) and inventory management software to automatically track stock levels and reorder supplies (39%).
Will automation embolden hospitality? It depends on who you ask and it might be too soon to tell. On one hand, over two-thirds of restaurant leaders believe AI or automation can improve 15 of the different tasks we asked about, the most popular of which are menu optimization (81%), inventory management (81%), reservations (81%) and vendor management (81%).
On the other hand, consumers are still getting on board with new technologies. When asked where they would want to see automation filling gaps when a restaurant isn’t fully staffed, 27% of diners say they would prefer restaurants not use automation at all.
Finding the right balance between using technology and maintaining a strong human presence in customer-facing roles will be key for restaurant owners.
Loyalty programs are key to boosting your most important business numbers.
Loyalty programs are one of the most potent ways to unlock revenue potential this year. Canadian consumers are enthusiastic about them – 81% say they are very or somewhat likely to engage with one.
Restaurants are seeing positive results from this trend: 82% of restaurant leaders say their loyalty program is successful in driving up repeat visits and 83% say it boosts order size. And the vast majority of restaurant owners we talked to agree that loyalty programs drive ROI – 72% of them plan to increase their investment in them over the next 12 months.
These numbers are promising. But while solutions like Square Loyalty can help you start a loyalty program with ease, you still need to do some legwork to understand what makes your customers tick.
Consumers say they care most about exclusive discounts (84%) and the ability to earn rewards (85%). They also find loyalty program alerts and notifications valuable (61%), which offers business owners an opportunity for personalization and upselling. Looking at data to fine-tune the use of different features can help you make the most of their loyalty programs.
Restaurant operators see multiple revenue streams as a path to growth.
Restaurant operators are thinking beyond made-to-order food. From memberships to merchandise, they are considering new revenue streams as a path to growth. Eighty percent of Canadian restaurateurs say they find non-core retail or service offerings extremely or very important to their growth plans.
Consumers are receptive to this multiple revenue stream model – over half of them (51%) have purchased retail items or services from a restaurant in the past year. Which offerings are they most interested in? Pre-packaged food or beverages, catering and kitchen supplies top the list. They also expressed interest in clothing, home décor and memberships, so there are plenty of opportunities for diversification to explore. Start by testing out new ideas in small batches to assess what resonates most with customers.
Customers want more convenient ordering and payment experiences.
Social distancing may be behind us for now, but digital ordering is here to stay. Online checkout and in-app pay drive the most orders for restaurants at 83% and 84%, respectively. While these numbers show that diners use these technologies, payment methods like credit and debit cards still top the list of options they find most convenient at a restaurant, whether they’re dining in person, picking up food or getting it delivered.
It makes sense. Ease and simplicity are part of the appeal when eating at a restaurant – and that includes the way you order and pay. Keeping things running smoothly during these touchpoints of the customer experience is important: 58% of diners told us they likely won’t return to restaurants that don’t offer convenient ordering and payment methods.
Perhaps this is why the popularity of self-service kiosks is on the rise: 62% of consumers find them convenient. It’s also worth noting that over half of diners appreciate mobile wallets. Being able to offer these payment methods may help boost sales, and a solution like Square Point of Sale can simplify that process.
Ordering through Square Kiosk means customers can build their açaí bowl exactly to their own tastes. We’ve also seen shorter lines, less waste and an increase in the average order, because it’s so fast and easy for customers to add on extra items, like a coconut water or an Oakbar.
– Maverick Bides, general manager at Oakberry Açaí, Vancouver, Canada
Customers and restaurants really don’t agree on fees.
As long as the guest experience remains positive, diners can likely get behind inevitable price increases. But extra fees are a pain point, especially when they’re not disclosed transparently.
This may just be one of the largest disconnects between restaurants and consumers – and many restaurant leaders are potentially unaware that some additional charges are prohibited by law.
Canadian restaurant leaders told us they’re charging fees like minimum tip settings when paying (42%), reservation cancellation or late arrival fees (40%) and kitchen appreciation or living wage surcharge fees (40%). Over a third of them are also taking reservation deposits.
However, the Competition Bureau prohibits the practice of “drip pricing” in Canada. This practice entails adding mandatory charges such as booking fees to a client’s bill. As troubling as no-shows are, charging clients who don’t honour their reservations may just get a restaurant in trouble.
Restaurants also need to think about how they’re perceived by their clientele. Over half of Canadian consumers found the following fees unacceptable on some level: Kitchen appreciation or living wage surcharge fees (59%), minimum tip settings when paying (58%) and service fees (23%). Nearly half of them also told us they don’t find reservation cancellation or late arrival fees (44%) and reservation deposits (48%) acceptable.
While restaurateurs must maintain profitability, they could risk turning off consumers – and even inadvertently breaking the law – with unexpected charges. Transparency is key to maintaining trust with diners.
Overall, restaurant owners are juggling several priorities this year. They’re looking to work smarter while continuing to elevate the customer experience and remain profitable. They’re turning to technology to balance these goals. And they’re exploring new avenues for growth. Those who embrace innovation with trends like loyalty programs and creative revenue streams will be well-positioned for success in 2025 and beyond.
For more in-depth insights on how restaurants are innovating in 2025, find more info on all the latest restaurant trends in the 2025 Square Future of Restaurants report.