We talk a lot in this industry about headwinds and challenges —– it’s a natural strategy to deal with a market that’s recently been experiencing anemic growth. However, despite the declines in traffic and the erosion of average eater checks, there are still many reasons to be excited about this industry and its prospects for the future.
Case in point: the FSR category and digital-delivery services. There is no denying times are tough for FSR operators, with traffic down four per cent on the year and dollars down three per cent. However, within the segment, carry-out and delivery have been bright spots. In fact, delivery at full-service independent restaurants increased from 27.4 million in 2016 to 36.6 million in 20171 — an increase of more than 33 per cent. This increase coincides directly with the growth in popularity of third-party delivery services such as UberEats, Skip The Dishes, Foodora, et cetera. As a result of this growth, there are now more options available for FSR delivery than ever before.
Trending out FSR delivery traffic among independents shows dramatic growth over the past year, but who’s driving this growth? Not surprisingly, it’s the millennials. As we all know, millennials are a must-win battle for any foodservice operator.
Now the largest foodservice cohort (surpassing Boomers for share of traffic), millennials also continue to be the key driver of commercial-foodservice growth, outpacing all other age cohorts. Furthermore, millennial traffic posts growth-on-the-year across all segments. Need more proof? Every one per cent of FSR millennial traffic you can steal from the competition is worth $44 million.
As the battle for the millennial consumer continues to heat up, it’s important to ask yourself if you have a strategy in place to protect (and grow) your delivery business. This key area will become more crucial as off-premise occasions continue to pick up share, catering to a more convenience-based consumer. What’s the true value of this opportunity you ask? Put simply, stealing one-per-cent share of FSR delivery occasions represents a $10-million opportunity for your business.
While the market has been challenging over the last five years, we all face the same headwinds. However, for those savvy enough to cut through the clutter, there are huge opportunities for growth. Digital delivery is one of, if not the largest, opportunities available to foodservice operators today.
