The cost of living is high and so are the expectations of diners. Finding and retaining staff is still a struggle post-pandemic. And, according to Restaurants Canada, the restaurant sector in Canada has seen large wage increases in recent years.
It’s not an easy time to be a restaurant owner, but Canadian restaurateurs are leveraging technology to adapt to challenges such as labour shortages and rising food prices. Because for many restaurant leaders, innovating isn’t an option – it’s a necessity to protect margins, save time and enhance operations. The good news is, there are plenty of opportunities ahead for those willing to experiment with new solutions.
Square surveyed 500 Canadian restaurant leaders and 1,000 Canadian consumers in the 2025 Future of Restaurants report to uncover some of the biggest trends in the industry. Here’s what we found.
Restaurants are relying on technology to stay competitive
From automation to digitization, 2025 is all about solutions that improve both front-of-the-house and back-of-the-house processes: 77% of Canadian restaurants surveyed by Square say they spend more time researching and implementing new tech than they did a year ago.
But leveraging technology to streamline operations and meet customers’ expectations is crucial amid a tough economy. According to Square data, 41% of mid-size Canadian restaurants are investing in tech in response to the rising cost of doing business.
The digital shift is also accelerating in response to pressures. Over half the leaders at mid-size Canadian restaurants report they need quicker ordering and payment processes like Square Point of Sale to remain competitive.
Where are Canadian restaurant leaders investing their dollars?
Elevating the guest experience
Despite telling us they’re cutting back on restaurant spending, Square data found Canadian diners still feel they’re having great experiences when they do pay for meals, with 75% describing their recent in-person dining experiences as good or very good. Those positive experiences mean restaurateurs must clear a high bar to keep consumers coming through the door. And they’re looking to technology for help.
According to Square data, 86% of Canadian restaurant leaders are planning to invest in tech that improves the guest experience – think, intuitive ordering solutions like Square Kiosk, which lets customers place their orders with a simple, iPad run-device.
Since being short-staffed during busy periods compromises the guest experience, ordering technology can alleviate workload while leading to shorter wait times for customers. And capacity management and workflow efficiency are priorities for Canadian restaurateurs in 2025: 87% of them want to prioritize tech which helps manage real-time capacity, while 88% plan to invest in tools to optimize workflow during service.
Saving time (and money)
Canadian restaurant leaders are also looking for innovative ways to save time and money: 86% are planning to invest in technology which improves communication between front of the house and back of the house, helps track item availability in real-time, and help them understand and improve their profit margins.
Enhancing order and payment processes
Speed is top of mind for most successful restaurateurs, as increasing tickets while smoothing out operations is a recipe for growth in the industry. Therefore, it makes sense that 84% of Canadian restaurant leaders told us they plan to invest in technology that improves their ability to take orders and 87% plan to invest in technology that boosts their ability to take payments.
Centralizing efforts and creating a seamless experience across touchpoints is also important, and 88% of Canadian restaurateurs want to invest in tech which helps manage online and delivery app orders.
Marketing and customer retention
Finally, Canadian restaurant leaders are seeing the value of leveraging technology for marketing, both in terms of retaining existing customers and attracting new diners. Customers enrolled in a loyalty program spend 53% more and visit a business 40% more often, according to Square data, and the Future of Restaurants report confirms that customer loyalty will be a major trend in 2025: 72% of Canadian restaurant leaders say they plan to increase their investment in loyalty or rewards programs and 86% say they want to invest in general in technology that helps them acquire new customers.
Canadian restaurant owners are optimistic about AI and automation
AI and automation are changing the game in 2025, and Canadian restaurant leaders are even optimistic about it: 76% of them feel that AI and automation can provide considerable ROI, a figure which increases to 79% for leaders of mid-sized restaurants.
How will restaurants in Canada make the most of these technological advancements? Eighty-percent of operators think AI or automation will improve order ticketing and payments over the next 12 months, while 78% think AI or automation will improve payroll, reporting and staff management (a figure which increases with business size).
Automation is already transforming processes for early adopters – 40% of Canadian restaurants use it to streamline their kitchen display system and process orders more efficiently, and 39% rely on inventory management software to track stock levels and reorder supplies.
Looking ahead in a competitive landscape
One thing is for sure: restaurants are going to have to do more to survive and thrive in the coming year. But thanks to technology, they can gain back time and work smarter to compete in a crowded landscape. Seventy-eight percent of Canadian restaurant leaders are already planning to spend more time this year managing finances and cash flow.
Standing out also means continuously looking for ways to meet evolving customer expectations. For example, Square data revealed that a large majority of restaurants are expanding discount or value offers amid economic challenges to help appeal to new and existing customers.
Additionally, building new revenue streams will be a notable path to growth – and consumers are already embracing it: 64% of consumers told Square they’re interested in purchasing items outside of a restaurant’s menu and 51% of them are already doing it. As non-core offerings such as memberships and merchandise are on the rise, testing ideas in small batches is a smart move to identify opportunities to better serve customers and boost sales.
Get the full picture
Staying on top of trends and customer preferences in the restaurant industry will be key to success in the coming year. Get the full picture with actionable insights inside the 2025 Square Future of Restaurants report and adapt them to your unique business to get a leg up on the competition.