With the year almost gone, there’s no better time to review foodservice performance in 2013. Did Canadians eat more meals? Did they eat at restaurants more? More importantly, what does 2014 hold for the foodservice industry in Canada?
The good news is Canadians spent more money at restaurants in 2013 over 2012. In fact, spending increased by three per cent — surpassing $49 billion in sales for the year — according to NPD CREST data. During the same period, NPD’s ReCount restaurant unit count data showed an increase of more than 1,000 restaurants in Canada. But, although the number of chain units increased by four per cent, the number of independent restaurant units decreased.
Moving forward, the more chain units that open, the more the share of dollar in the industry will be diluted, especially for independent operators. With that in mind, any chain or independent operator who increased sales by more than three per cent in 2013 is growing his business at a faster rate than the overall market. Undoubtedly, such success is the result of stealing share, which was the modus operandi at restaurants this year. The same competitive landscape is expected to continue in 2014.
That’s not the only trend expected to continue in 2014. Customer traffic at restaurants is also predicted to remain flat. In fact, NPD’s “Future of Foodservice” report forecasts that it will be challenging to convince Canadians to dine out more than they did in 2013, as household debt will continue to be a problem.
Despite expected overall flat traffic, the aforementioned report highlights a few segments of the restaurant industry where customer traffic will grow, such as the quick-service burger segment. During the past five years, players in this category have successfully expanded their menus, growing beyond their core burger offerings. Key growth for this segment has taken place during the snacking daypart at the end of the day. Such traffic has grown nine per cent since 2008, and that growth is expected to continue into 2014. Interestingly, snacking has attracted more customers to quick-service coffee operators, too, with traffic among this group growing four per cent since 2008. In fact, Canadians have increased their snacking occasions for five years in a row; for this reason, the overall number of meals eaten annually in the country per-capita hit an all-time high of 1,279 in 2013 — a trend that will likely continue in 2014.
Meanwhile, 2014 is expected to pose another challenge at full-service restaurants (FSR) where customer traffic remained flat in 2013 over 2012. It’s been an ongoing trend, as traffic in the segment is down 89-million visits per year over 2008 and the per-capita use of FSR restaurants declined from 55 visits a year in 2008 to 48 visits today. On a positive note, spending at FSR restaurants will continue to increase, despite declining traffic.