From The Desk of Robert Carter: Fight for Share

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Volume 48, Issue 1

Written By:  Robert Carter

It’s going to be a tough road ahead for the foodservice industry as market traffic is expected to grow at a rate of less than one per cent per year during the next five years. Restaurant operators who steal share by remaining relevant can get ahead, but they will need to continually stay on trend and understand customer needs.

Convenience, value, innovation and service remain high on the foodservice consumers’ wish list in 2015, but the definition of these expectations is frequently changing. For example, convenience generally refers to portability, saving time and order accuracy, but the technology revolution has raised the bar in these areas. What’s more, online marketing is no longer nice to have, it’s a necessity. Moving forward, expect increased proliferation of mobile apps for ordering and payment and other technologies, which offer customers greater convenience.

These trends are important to consider, especially in Canada’s quick-service restaurant (QSR) segment, which accounts for 4.3-billion annual consumer visits and generates $23 billion a year. QSR visits, which increased only one per cent over the past several years, are forecast to increase a little less than one per cent per year from 2013 through 2020, based on NPD’s ‘2020 Vision: The Future of QSR’ report. The slight traffic growth expected will be driven by population increases and not actual visits, as per-capita visits are forecast to decline. Meanwhile, off-premise QSR visits ‘ primarily carry-out and drive-thru ‘ are predicted to grow by 10 per cent.

The challenge over the next several years will be for quick-service operators to encourage their customers to eat on premise. QSR operators must be prepared to deal with this continued shift towards off-premise occasions by providing consumers with convenient, flexible meal solutions throughout the day while focusing on fast and precise service.

Overall, operators need to focus on value, which has been redefined by foodservice consumers and now involves more than just a good price. Food quality remains the most important value driver when choosing restaurants, and it should be viewed as a cost of entry. Today’s operators must offer more choice as it pertains to portion size and price, deliver on customization and fresh ingredients, offer different preparation styles and focus on quality and service.

In this evolving and dynamic marketplace foodservice operators who want to be prosperous need to peel back the layers, return to the basics and focus on the customer.

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