Changes in the foodservice market over the past two years have increased the importance of comparing data to a stable benchmark. Year-over-year changes are certainly important, as they point the way forward for recovery, but to tell the entire story, comparisons to 2019 must be made.
To demonstrate why this historical context is so crucial, let’s look at the just-released topline numbers from The NPD Group’s ReCount 2021 restaurant census. Canada’s total number of commercial restaurants increased almost four per cent compared to the 2020 census. After a decade of steady declines, this figure is extremely positive — yet overly optimistic. The number of restaurants remained six-per-cent below 2019, a decline of more than 4,000 units. Independents accounted for 85 per cent of this decline, though these operators also grew seven per cent in 2021, outpacing chains by a wide margin.
Let’s dig deeper to uncover more trends, starting with quick-service restaurants (QSR). Total QSR count grew three per cent in 2021 but was still down four per cent compared to 2019. Elsewhere in the QSR segment we find,
- The Mexican category maintained its growth streak after being one of only two growing categories in 2020. The category approached 1,100 units in 2021, increasing seven per cent compared to 2020 and 17 per cent over the past two years — the fastest of all categories over the same period.
- The fastest-growing category in 2021 was global cuisine, comprised primarily of Greek and Mediterranean restaurants. The category grew 12 per cent or almost 200 additional units compared to 2020. Meanwhile, Asian QSRs declined. This highlights not just the continued demand for global cuisine and innovative new flavours, but also consumers’ constantly changing behaviours.
- Sandwich shops of all forms rebounded in 2021 as workers began returning to offices and students returned to schools. Units grew 10 per cent compared to 2020 but remained seven per cent below 2019 levels, or 200 units. This area still has room for recovery. Our CREST data for the 12 months ending April 2022 shows traffic remained down five per cent from 2019 levels.
- The hardest-hit category was snack/dessert, which includes coffee operators. The category was down seven per cent in unit counts (and traffic, according to our CREST data) compared to 2019. This drop was due to the decline in everyday commuting activities paired with one-third of Canadian households acquiring a new coffee appliance since the start of the pandemic (according to our Retail Tracking Service).
A review of the full-service-restaurant (FSR) segment confirms why the comparison to 2019 is critical for an accurate picture. Unit growth in 2021 amounted to approximately five per cent, or 1,000 units. Most categories posted gains. But the number of FSRs remained eight-per-cent below 2019 levels (down 2,000 units) and not a single category posted gains. Our CREST data shows FSR traffic trailed 2019 levels by 10 per cent. Despite dollar sales returning to 2019 levels on a month-by-month basis, we project traffic levels to remain below 2019 until the back half of 2023. Continued resilience will be required.
The only other restaurant category to grow in 2020 was the small but delicious QSR cookie category. Though it declined two per cent in 2021, I’m pleased to report at least two new stores opened in my neighbourhood. Here’s hoping the category will stage a comeback near you in 2022.
Vince Sgabellone is a foodservice industry analyst with The NPD Group. He can be reached at firstname.lastname@example.org