Despite a horrendous 2009, foodservice professionals are tapping into a new energy that’s reinvigorating the industry
Just how bad did it get last year in the foodservice industry? Speaking at the Canadian Restaurant Investment Conference this past May, Moxie’s Classic Grill’s president Laurids Skaarup voiced his thoughts on the matter rather succinctly: “2009 sucked,” he told attendees gathered at the Hilton Toronto.
Indeed, 2009 was about survival for most foodservice companies in Canada. As the global economy floundered, banks and the lending community clutched their capital firmly, stifling opportunities for growth. Meanwhile, consumers — many who were legitimately worried about the safety of their jobs — cut their discretionary spending, impacting the health of the restaurant business even further. Leisure and business travel dwindled, and if that wasn’t enough, the threat of a pandemic put a serious fright into operators and consumers alike.
For most CEOs on F&H’s Top 100, it was a year of making cuts, too. Many executives, feeling that downward pressure, initiated recession-driven countermeasures, tightened operating procedures and looked for alternate ways to generate revenue without damaging the value proposition of their brands. Some resorted to discounting to keep traffic up at their stores; others closed units for good, leaving the entire industry lingering in the doldrums.
According to the Canadian Foodservice and Restaurant Association’s (CRFA) economist, Chris Elliot, Canada’s commercial foodservice industry shrank by 25,500 total jobs in 2009, with the biggest losses in Quebec (-14,600), B.C. (-11,000) and Ontario (-7,900). Only Alberta saw an increase in the number of jobs created last year, with 9,100 new foodservice positions available in the province. Considering the grim news, it’s not surprising the CRFA tabbed total foodservice sales for 2009 at $58.3 billion, a -1.2 per cent drop from the $59.7 billion it generated in 2008. (Remember, most of ’08 was solid, until the economy swooned in September.) More worrisome was that real growth last year was -4.7 per cent.
Overall, F&H’s Top 100 foodservice companies grew by just 0.7 per cent. In terms of sales volume, the majority of them lost money or barely treaded water. The story was no different in terms of percentage growth, with most Top 100 companies seeing their business shrink in 2009.
Thankfully, not all the news was bad. Although the industry as a whole suffered through a terrible year, some companies performed extremely well. Leading the way once again was the TDL Group Corp. (Tim Hortons), with an increase of more than $765 million in sales generated by its 3,578 units. McDonald’s Canada, Foodservice and Hospitality’s reigning Pinnacle Award winner for Company of the Year, saw a $190-million jump in sales, while Montreal-based food-court king, MTY Tiki Ming Enterprises Inc., enjoyed an increase of $139 million. The fourth largest gain in sales volume came from Wendy’s Restaurants of Canada, with a $61-million increase, and Aramark Canada Ltd. rounded out the top five, building on last year’s sales by $46.7 million.
The biggest risers on the Top 100 in terms of percentage growth were Tortoise Restaurant Group Inc. (65.8 per cent), Dixie Lee Food System Inc. (57.1 per cent), MTY Tiki Ming (54.7 per cent), Booster Juice (51.7 per cent) and Mr. Mike’s Steakhouse & Bar (33.8 per cent).
The top five companies based on total sales — The TDL Group, McDonald’s Canada, Cara Operations Limited, Franchise World Headquarters LLC (Subway) and Compass Group Canada — did not shift positions from last year. Nevertheless, a few companies made their first forays into the Top 100, including Wild Wing Restaurants Inc. (65th, with $54 million in sales), Wok Box Fresh Asian Kitchen (68th, $52 million) and Le Biftheque (96th, $26.5 million), while a glut of innovative new companies are poised to push their way into this elite group in the coming years.
But the numbers only tell half the story — maybe the most important thing to come out of the downturn is the feeling that’s currently permeating throughout the entire foodservice industry. While it’s hard to pinpoint, there is clearly a movement afoot that’s set to define the post-recession era. There’s been a dramatic shift in the marketplace during the past few years, spurred by the collapsing and rebounding economy, new technologies, forward-thinking leaders with fresh approaches to doing business and a stronger desire to promote sustainability. The emerging players on the scene are ready to make their mark, but the old guard is working harder than ever to reinvent itself in a reinvigorated business landscape that’s vibrant, dynamic and bursting with opportunity.
Consumer confidence is up dramatically, too, and our economy is surging. Canada is leading the G7 nations out of the malaise, with StatsCan reporting that our GDP increased at an annualized pace of 6.1 per cent between January and March of this year, the largest quarterly climb since the last quarter of 1999. The jobs market has rebounded and, with a busy summer season in full swing, operators are expecting a solid 2010.
Will it be enough to make everyone forget the anguish of 2009? Not likely, but thanks to a current of new energy that’s recharging the industry, we’re powering our way to a better, brighter tomorrow.