How to navigate the recent minimum wage increase as an independent restaurant owner in Ontario

Nov 9, 2023

As business owners are already aware, the minimum wage in Ontario recently increased to $16.55/hr. CP24 explained the details of the increase on their website, summarizing as follows: “The province’s general minimum wage increase from $15.50 an hour to $16.55 an hour will come into effect on [October 1, 2023]. It is estimated that there are more than 900,000 workers in the province who are earning the general minimum wage. A person earning the general minimum wage and working 40 hours a week will see an annual pay increase of about $2,200. The student minimum wage, which applies to people under the age of 18 who work 28 hours a week or less when school is in session or during summer holidays, will see an hourly increase of $1, from $14.60 to $15.60.”

Given the challenges posed by this wage increase and the broader economic context, independent restaurant operators in Ontario will need to adopt strategic approaches to maintain their business viability while continuing to offer high quality experiences to customers, pay their employees well, and turn a profit. Succeeding in one of these areas isn’t enough, and striking the right balance is critical. Here are some steps independent food service operators can consider—for personalized advice, please contact us. Your Morton rep would be glad to discuss your needs and offer guidance.

  • Menu Optimization: Review your menu to identify items with higher profit margins. Focus on promoting these items to maintain profitability. Your Morton rep can help you with this task—our team excels in cutting costs without compromising quality!
  • Pricing Adjustments: While passing on all costs to customers might not be ideal, strategic and modest price adjustments on select menu items can help offset increased labor costs. Communicate these changes transparently to customers.
  • Operational Efficiency and Labour Management: Streamline your operations to reduce waste and improve workflows. Implement scheduling software to optimize staff scheduling and minimize overstaffing during slow periods. Cross-train employees to perform multiple tasks, allowing for more flexible scheduling.
  • Upselling and Cross-Selling: Train staff to effectively upsell and cross-sell higher-margin menu items as well as beverages and desserts. Proactively work towards increasing average cheque sizes through this strategy. Remember: make these selections seem appealing without pushing them aggressively! Your staff should be enthusiastic but not pushy.
  • Menu Diversification: Expand your menu with cost-effective options that align with current food trends. Offering vegetarian, vegan, gluten-free or plant-based options can cater to a wider audience.
  • Customer Loyalty Programs and Other Promotions: Introduce loyalty programs to incentivize repeat business and build a loyal customer base. Offering rewards for frequent visits can help maintain traffic, and promoting special deals can increase foot traffic and revenue during slow periods.
  • Creative Marketing: Use social media, your website, your email list and other marketing channels to engage customers and promote your restaurant’s unique offerings. Keep yourself top of mind with community members and give them reason to choose your establishment when they make lunch or dinner plans.
  • Community Engagement: Foster community engagement through partnerships, collaborations, and participation in local events. This can help generate positive word-of-mouth in your community and increase/maintain support from local patrons.
  • Financial Management: Keep an extra-close eye on cash flow, budgets, and financial statements. Regularly review and adjust your financial strategy based on changing circumstances. This is another task our reps would be happy to assist with.
  • Government Support and Advocacy: Engage with industry associations and advocate for policies that address the unique challenges of the restaurant sector, such as tax breaks or subsidies for struggling businesses.
  • Prioritize Employee Engagement: Foster a positive work environment to retain skilled employees. Happy staff are more likely to provide excellent service, which can lead to repeat business. Your team is one of your greatest assets!
  • Feedback and Collaboration: Collaborate with your team to gather ideas and feedback on cost-saving measures, menu changes, and operational improvements. You may be surprised by some of the innovative, effective ideas they put forth! Give everyone an opportunity to pitch in and shine—in addition to great ideas, it helps your team feel valued.

Balancing the needs of employees, customers, and your business’ financial health in the face of rising operational costs is undoubtedly challenging. By carefully evaluating each aspect of the business and adopting a proactive and strategic approach, restaurant operators can navigate these challenges and work towards maintaining their profitability. The Morton team is here to help your independent restaurant thrive and grow in any economic landscape—it’s what we’re passionate about, and we’re always glad to help. Please contact us for individualized support. We look forward to hearing from you!