[dropcap size=big]W[/dropcap]hat will the quick-service restaurant landscape look like in 2020? Many influences will shape the way restaurants in Canada evolve over the next seven years. With that in mind, NPD has harnessed its historical CREST consumer information to predict future trends and macro changes that will create opportunities and challenges in the foodservice industry. This first instalment of a two-part series, will examine key findings from NPD’s latest report “Vision 2020: The Future of QSR in Canada.”
Increased Competition
The restaurant market in 2020 is going to be much more competitive. Since the dawn of the economic downturn in 2008, restaurant visits per capita declined by 12 visits a year from 198 restaurant occasions in 2008 to 186 in 2014. That number is expected to further decline to 185 in 2020. As a result, the volume of overall restaurant customer traffic is not expected to increase dramatically in the next seven years. Customer traffic to restaurants in 2020 is forecast to be more than seven billion annually, which is only approximately 400 million more than today. What’s more, the number of restaurant units will be developed faster than the increase of customer traffic from now up to 2020. The most dramatic unit development will be seen in the fast-casual segment, which will most likely see unit counts double in total from 542 today to more than 1,000 units in 2020. The result will mean more restaurateurs will be competing for the same customer.
Ethnic Influence
An influx of South-Asian and Chinese immigrants will affect the growth of the Canadian population over the next seven years. The influence of this ethnic consumer, as well as the expanding global taste profile of boomers and millennials, will result in ethnic food becoming the fastest-growing menu category, with consumption increasing by 31 per cent leading up to 2020. Expect to see ethnic menu items appearing in all restaurant segments, with the greatest growth coming from quick-service restaurants and fast-casual restaurants.
The Response
As a result of an increasingly competitive market, more restaurateurs will focus on strategies such as innovative menu development, menu extensions, limited-time offers and loyalty programs to establish a key point of difference as well as to retain their existing customers.
Next month’s column will offer a final analysis of “Vision 2020: The Future of QSR in Canada.”
