TORONTO — Competition is creating new challenges in today’s restaurant industry, as owners fight for their share of traffic and react to emerging segments, reported experts at the fifth-annual Canadian Restaurant Investment Summit (CRIS), held yesterday at the Eaton Chelsea hotel in Toronto.
“Today’s marketplace is a challenged marketplace overall,” began Robert Carter, executive director of the NPD Group, who shared an industry overview. He told the crowd of owners, operators and franchisees that although consumers have been spending more in foodservice, year over year, traffic remains flat. It’s creating a battle for share that’s leading restaurant operators to diversify their menus and work harder to appeal to its largest demographics — aging boomers and millennials, who have been driving growth since the recession. Industry segments are also evolving. “Two strong categories have been growing in the last two years, including the emerging home-meal replacement (HMR) category and the fast-casual segment, which saw more than seven-per-cent traffic growth over the past year,” said Carter. Both segments will continue to be key drivers in 2014, but building loyalty and beverage programs will help restaurants stay competitive.
Later, CBC’s Amanda Lang sat down with Bill Gregson, president and CEO of Vaughan, Ont.-based Cara, and Paul Rivett, president of Toronto’s Fairfax, to find out the executives’ plans for the newly consolidated Cara and Prime restaurants, which both now fall under the Fairfax umbrella. “All nine brands have very distinct assets to them,” said Gregson, but some are more robust than others. “Swiss Chalet is our single biggest brand, one that we’re really bullish on… We’ve got to figure out how we can make Swiss Chalet a billion-dollar brand.” The team has big plans for Cara’s future, including looking into growing Cara globally and becoming a publicly traded company. But, in the meantime, Gregson will focus on growing sales and stealing share. “Having nine brands complicates it. What we’ve done with the integration of Prime and Cara is have nine different brand teams and left them all intact — there’s different strategies for each one.”
After plenary sessions on branding, equipment ROI and a networking lunch, Lang returned to host an economic outlook session with real-estate executives, who shared optimism about the state of the industry. “We have found it’s a good time to find real estate, trade real estate, roll out older product and replace it with newer product,” says Blake Hutcheson, president and CEO of Oxford Properties. “When you look back at the real estate in this country, we have withstood the storm better than any other country in the world. Two years ago we were back to ’07 prices.”
The panel revealed that urbanization is creating opportunity for restaurant development, especially in centres in downtown Toronto, where the condo boom is making room for potential restaurant space. “The more you have high-rise residential, the more you have an opportunity to anchor those with a community restaurant, community bar, something that makes people feel like they’re part of something,” added Hutcheson. “What we’re seeing all over the world is that a great retail box can be worth 50 times more than the day you enter it. If you can tie it up for restaurant use today, for as long as you can, you may have something that’s an unbelievable asset one day.”