Week of Dec. 21, 2009

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Canada to Lead Growth of G7
According to a story by Paul Vieira in the Dec. 14 issue of the Financial Post, research reports, produced by the Royal Bank of Canada and Merrill Lynch Canada, indicate our country will lead the Group of Seven (G7) nations for economic growth in 2010. The two financial giants predict 3.2 per cent and 2.6 per cent Gross Domestic Product (GDP) growth next year respectively, which would lead the G7 nations. They are joined by the Bank of Canada, which in an earlier report called for three per cent expansion in 2010.
Royal Bank’s chief economist Craig Wright said that Canada stands to benefit as the U.S.’s biggest trading partner, as it recovers with growth of 2.5 per cent next year. He added the country’s economy is well-positioned due to efforts decades earlier by government to put the federal fiscal house in order and anchor inflation expectations. RBC Economics expects real Canadian GDP to grow 2.6 per cent in 2010, followed by growth of 3.9 per cent in 2011.
Sheryl King, Merrill Lynch’s head of Canadian Economics and Market Strategy, also sees positives signs for next year. “Expect 2010 to be the year of the consumer takeover,” she says.  What’s more, she notes that the domestic-oriented sectors of the economy have kept it afloat by creating nearly 200,000 jobs since March. Now, she says exporters are adding workers after reducing payrolls by almost 400,000. King adds, “If these trends continue, the job market will be back up at pre-recession levels by the end of 2010, making this the fastest recovery [in jobs] in post-Second World War history.”
Economists at other leading banks concur. Analysts at Desjardins Group said a global economic recovery is now a fact and predicted global GDP will expand by about 3.4 per cent in 2010. Desjardins said that Canada and the U.S. will lead the industrialized countries with growth of more than two per cent each over the next two years.
Not wanting to be left out, TD Bank’s director of Forecasting, Beta Caranci recently told the Canadian Press that the recession has indeed ended by their estimates as well. “The day has finally arrived that we can confidently say the global great recession has ended,” he says.

2010 Foodservice Interchange, Jan. 27, Mississauga, Ont.
Correction: The 2010 Foodservice Interchange Conference (FSI) will be held on Wednesday Jan. 27 at the International Centre in Mississauga, Ont., with the theme “Navigating Business through Turbulent Times.” In Dec. 14 issue we erred, providing an earlier date. The full-day event is presented by the Food and Consumer Products of Canada and the Canadian Council of Grocery Distributors and is sponsored by iGPS (Intelligent Global Pooling Systems). Media sponsors are Foodservice and Hospitality magazine and HRI magazine.

New Waldorf Astoria Hotel Planned for Montreal
A twin-tower 225-room hotel and 116-residences complex, the Waldorf Astoria Hotel & Residences Montreal, has been granted initial approval for downtown Sherbrooke St. in Montreal, Que. Public hearings on the project are slated to be held Jan. 25 or 26. Modelled on its prestigious namesake on Park Ave. in New York City, N.Y., the $200-million project will include 1,400 square metres of ballroom, meeting and other space topped by a glass dome and nine levels of underground parking for 550 vehicles. The project is being developed by Monit Investments and has been designed by DCYSA Architects; completion is planned for 2011. “Waldorf Astoria sets the standard worldwide for elegance, and we are delighted to be an integral part of the luxury brand’s growth and to bring The Waldorf Astoria’s renowned service to Montreal,” says Monit president, Barry Kotler.

U.S. Foodservice to Show Gains in Second Half of 2010
The U.S. foodservice industry faces two more quarters of decline in the first half of 2010, according to the NPD Group’s research report titled, Restaurant Industry, What to Expect When Economic Recovery Begins. The U.S. industry has already experienced five consecutive quarters of traffic declines through September 2009, having declined 0.4 per cent in the third quarter, with traffic falling across all restaurant segments. Thankfully, NPD expects the industry to turn slightly positive in the second half of 2010. Restaurant industry analyst Bonnie Riggs commented, saying, “This recession is generally believed to be more severe than those in recent history, and this time the industry not only realized traffic losses, consumer spending declined as well. This is the first time since NPD began tracking that the industry realized a fall-off in dollars spent at restaurants.” NPD reports that, according to another recent foodservice survey, consumers believe the economy is beginning to improve or, at the very least, is not going to get any worse.  

Manufacturing Sales Trending Upwards
Manufacturing sales rose two per cent in October to $42.5 billion, the fourth increase in five months, according to Statistics Canada. This growth was double the predicted one per cent growth expected by most economists. Led by aerospace products and parts, petroleum and coal products and motor-vehicle sales, constant dollar manufacturing sales rose 1.2 per cent in October, also marking an increase in four of the past five months.

CRFA Challenging Revenue Quebec’s SRM Plan for Restaurants
The Canadian Restaurant and Foodservices Association (CRFA) lashed out last week at Revenue Quebec’s plan to have restaurants in the province issue a receipt for all transactions and install a sales registry module (SRM) at each point-of-sale (POS) station by the fall of 2010. A six-month test of a hand-held mini-computer, called a MEV (Module d’senregistrement des ventes), was launched in early November at some 50 Quebec restaurants, which were volunteered for the project. The MEV’s have been supplied free by the government. The action is in response to the government’s claim that it is losing more than $400 million a year in unpaid taxes when customers pay cash or by zappers in cash registers that divert sales from the books. CRFA’s Council of Chain Restaurants: Quebec (CCRQ) has made claims during the past three years that it will be difficult, costly ($4,000 to $7,000 per restaurant) and almost unmanageable to install SRM systems in the province’s 20,000 restaurants. “The ministry’s solution means honest restaurateurs will have to pay to install systems to catch the few that have been cheating for a number of years,” said CRFA’s Quebec vice-president, Jean Lefebvre. “The solution is absolutely unfair and unwarranted.  It’s like using a machine gun to kill a fly.”

CAFP Gala Dinner and Fundraiser, Feb. 8, Toronto
The 36th Annual Top Management Night Gala dinner of the Canadian Association of Foodservice Professionals (CAFP) will be held Monday Feb. 8 at the Old Mill Inn & Spa in Toronto. The keynote speaker will be Richard Worzel, a prominent futurist. Andrea Watson, CAFP Toronto president, commented, saying, “Top Management Night is a must-attend event that recognizes outstanding achievement in many areas of the foodservice and hospitality industry. It’s an invaluable networking opportunity.” For information, click here.

Preserves See Growth in Local Cuisine Scene
“Canadian chefs go wild for canning,” a Trend Watch report posted last week on the Canadian Tourism Commission website highlights the trend of canning in Canadian Restaurants. Written by western Canada food writer and cookbook author Cinda Chavich, the article features more than a dozen chefs — from Toronto to Vancouver — who are proponents of local cuisine and offer their own house-made preserves on their menus. “It’s a reality here north of the 49th, if you want to eat well all winter long, you’d better get some of that fresh fall bounty into the root cellar or canning cupboard,” said Chavich. “Now a new generation, hooked on the idea of eating locally, is getting back into canning to help extend the short summer produce season.” The story includes vignettes with Jamie Kennedy in Toronto; Adam O’Brien at Farm in Calgary; Ned Bell at his Cabana Bar and Grille in Kelowna, B.C.; and Corey Sullivan of Twisted Fork Bistro in Vancouver.

Two Vancouver Hotels to Open in January
Two hotels will be opening in Vancouver in January, just in time for the 2010 Olympic and Paralympic Winter Games, with demand for rooms expected to crest from Feb. 10 for some 24 days. The 377-room Fairmont Pacific Rim, will open next month under the watch of general manager Randy Zupanski, and the 220-room Coast Coal Harbour Hotel, located in West Hastings, is scheduled for a Jan. 15 opening. The Vancouver Olympic Games run Feb. 12 to 28, followed by the Paralympic Games March 12 to 21.

CRFA and BCRFA Partner to Fight B.C.’s HST
The Canadian Restaurant and Foodservices Association (CRFA) and the British Columbia Restaurant and Foodservices Association (BCRFA) have partnered to create a No Meal Tax campaign to challenge British Columbia’s Harmonized Sales Tax (HST). The Nomealtax.ca campaign asks B.C. consumers to speak out against the double impacts of higher dining prices and potential job losses in the restaurant industry. To obtain a complete No Meal Tax kit, telephone Mark von Schellwitz at (604) 685-9655 ext. 1 or email mark@crfa.ca.

U.S. McDonald’s to Offer Free Wi-Fi
Free Wi-Fi will be offered at many more U.S. McDonald’s outlets in mid-January. The QSR chain currently offers Wi-Fi at 11,000 of its 14,000 U.S. locations, charging $2.95 for two hours. The Wall Street Journal speculates that the move comes, “because McDonald’s wants to become a hangout, just like its rival.”  That rival, Starbucks, provides free Wi-Fi service for Starbucks cardholders, with a two-hour daily limit; other customers pay $3.99 for the two-hour service.

A&W Adds New Locations to Royalty Family
The restaurant chain famous for its burger family is adding new locations to its own royalty family as well. Vancouver-based A&W Revenue Royalties Income Fund and A&W Food Services of Canada Inc. announced that effective Jan. 5, the number of A&W restaurants for which royalties are paid to A&W Trade Marks Limited Partnership will be increased by fifteen. Twenty-three new restaurants opened across Canada between October 2008 and September 2009, with eight restaurants permanently closed during this period. The addition of these 15-net new restaurants brings the total number of A&W restaurants in the royalty pool to 700. “We are very pleased to have opened 23 new A&W restaurants in the past year,” said Paul Hollands, president and CEO of A&W Food Services. “Since 2002, A&W Food Services has opened 191 new restaurants. We are delighted with this growth of A&W restaurants across Canada and in particular in Ontario, our most important growth market in the country.”

Transition Takes Place at Priszm Income Fund
Priszm Income Fund has announced its plans to transition the marketing responsibility for KFC Canada back to Yum! Canada, which is the parent franchisor for the KFC, Pizza Hut and Taco Bell brands in Canada. Priszm has handled the marketing for promotions and product launches for all its restaurants as well as on behalf of the KFC franchise system in Canada. As part of the revised direction of KFC, Pizza Hut and Taco Bell in Canada, under the new leadership of Sabir Sami, KFC Canada’s franchisor will now take on the role of marketing for the system. “With our renewed focus to upgrade and reinvest in our restaurants, we decided it was in the best interest of Priszm and KFC Canada to transition marketing leadership and costs back to Yum! Canada, so Priszm can become even more focused on running great restaurants for our customers,” said John Bitove, executive chairman of Priszm. As part of the transition, Steve Langford will be leaving Priszm as president of the KFC and Taco Bell brands before Dec. 31. Former Tim Hortons executive Jim Robertson has been appointed COO of Priszm with responsibility for the 444 restaurants Priszm operates across Canada. Robertson was recently vice-president, Operations at Priszm. “Jim has made a tremendous impact on our organization, elevating the performance of our operations team since the day he arrived,” says Bitove. “As we invest in upgrading our restaurants to give our customers a better experience, Jim will continue to hone our operations as we strive to run the best restaurants in Canada.” In addition to its normal maintenance capital and point-of-sale upgrade programs, Priszm plans to invest more than $15 million in upgrading its restaurants in 2010.

Flanagan Foodservice Awarded Wendy’s Contract
Ontario-based Flanagan Foodservice Inc. has acquired a multi-year contract from Wendy’s Restaurants of Canada to distribute a full line of foodservice supplies to all Wendy’s locations in Ontario and Quebec. Flanagan will now provide food and any related products and services to the 208 Wendy’s restaurants in both provinces. “We are very pleased that Wendy’s has chosen Flanagan to provide its stores with our unique brand of service,” said Dan Flanagan, president and CEO of Flanagan Foodservice Inc. “Wendy’s is a great strategic fit for our business in terms of the high standards, service and quality that both companies offer to our customers. Our expansion this year will provide the space needed for this new business and, at the same time, still offer growth opportunities to our existing customers.” Distribution to Wendy’s restaurants will begin Jan. 31. Founded in 1977, Flanagan is the largest Canadian family owned foodservice distributor in Canada.

Casey’s Raises $50k for Food Banks
Casey’s Grill • Bar’s second ‘Feed the Soul’ chain-wide fundraiser has raised $50,000 for food banks in Ontario and Quebec. Part of the Mississauga, Ont.-based Prime Restaurants of Canada, Casey’s fundraiser involved all of its restaurant employees and tens of thousands of its customers who helped raise funds to feed the hungry. The campaign was organized in partnership with the Ontario Association of Food Banks (OAFB) and Banques alimentaires Québec. A portion of the proceeds from every item sold from the ‘Feed the Soul’ feature menu was donated to local food banks between Sept. 21 and Oct. 18. “Casey’s gratefully thanks and applauds our guests and franchisees for their extraordinary support of their local food banks during these difficult economic times,” said Grant Cobb, senior vice-president, Brand Management, Prime Restaurants. “In addition to raising much needed funds, the ‘Feed the Soul’ campaign successfully realized our goal of shining a spotlight on the hunger epidemic in this country.”  

Accor SA to Split into Two Separate Companies
France-based Accor SA is planning to split into two companies by diverging the hotel business from the prepaid services business. Its board of directors has recommended the change, pending shareholder approval, after extensive reviews carried out by senior management at the board’s request. Accor’s two major shareholders, Colony Capital and Eurazeo, which in combination own 30 per cent of the company, will work with Accor’s management to prepare a proposal for shareholders sometime in 2010. Said hotel business operates some 4,000 hotels in 90 countries, including Canada. Accor’s services division sold a variety of prepaid benefits, such as gift vouchers or lunch vouchers to corporate human resources departments and generated some 60 per cent of the company’s revenue in the last quarter. “The demerger would create a new, solid, sustainable growth dynamic for both businesses, each of which is a global leader in its respective business,” said Accor CEO Gilles Pélisson. The new plan calls for Pélisson to manage the separate hotels division, while Accor CFO Jacques Stern will head the services business. Olivier Poirot, CEO of Accor North America, becomes head of finance for the global hotels business.

Domino’s “Re-invents Pizza,” Launches Nationwide in U.S.
Ann Arbor, Mich.-based Domino’s Pizza, which has more than 270 locations in Canada, is reinventing its hand-tossed pizza in the U.S. with a new garlic-seasoned crust, robust sauce and more flavorful cheese pizza recipe. The new pizza will be in all U.S. stores beginning Dec. 27. Domino’s chairman and CEO, David A. Brandon, commented, saying, “2010 will be our 50th year in the business, and we are kicking it off with the most aggressive promotion in the history of our company. This is the biggest product introduction we’sve done since…well, pizza.” “We’sre not talking about a slightly altered version of our previous pizza,” says chief marketing officer, Russell Weiner. “It’s a completely new pizza reinvented from the crust up, and we are proud of it. To us, it’s as big as McDonald’s changing the Big Mac or Burger King reinventing the Whopper. Weiner also adds that the new and improved pie comes with a guarantee. “If you are not completely satisfied with your Domino’s pizza experience, we will make it right or refund your money,” he says. A special introductory offer will be given customers: two medium, two topping pizzas for US$5.99 each.

 

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