Yannick Bigourdan on the state of restaurants

On this week’s episode of Free Lunch by The Peak, we sat down with Yannick Bigourdan to talk about what it’s like running one of Toronto’s top restaurants as the economy slows down.

Are you seeing a slowdown in new restaurants?

“I'm more of a cautious investor than I was three years ago, but I know some groups are very bullish and opening large restaurants: Some are spending upwards of $10 million just for the square footage, and that’s before anything else goes into it. The landlords also want to attract the best operators, so they’re trying to offer deals that make sense for everybody.” 

What goes into setting prices for a restaurant? 

“If you pay $33 for a steak, and want to keep your food costs in a typical target range of 30-40%, theoretically, you’d charge about $100. But it depends on what the market can bear and what competitors are doing: If they’re charging $85, it’s a tough appeal battle. That’s where you add value through things like great service, but that also drives up labour costs.”  

Are restaurant prices going to continue to rise?   

“That’s the elephant in the room nowadays, right? It's a high cost for everything. The price of frying oil, for example, is 300% above what it was pre-Covid. Protein and vegetable prices have gone through the roof too. We have to pass that on to the customer, and we’re not hiding that. That said, there may be stabilization soon, both with food and labour costs.”

This interview has been edited for clarity and length. Listen to the full conversation here.