Conference Board Predicts Profit Rebound in Foodservice and Hospitality
The foodservices, accommodation and retail sectors are expected to see a strong profit rebound of more than 20 per cent this year, according to a report published by the Conference Board of Canada in collaboration with Business Development Bank of Canada. The fall 2010 edition of the Canadian Industrial Profile Service, issued last week, provides a production, revenue, cost and profitability forecast for six Canadian industries: accommodation, food and beverage manufacturing, foodservices, retail trade, transportation and warehousing and wholesale trades. “Profits will rebound this year in four of the six industries covered in this outlook,” said Michael Burt, associate director, Industrial Economic Trends. “Weaker economic growth in the second half of 2010 will dampen profitability in 2011 for most of the industries covered.”
Accommodation sales were up, occupancy rates are rising and prices have improved, producing a 24-per-cent increase in profits this year, the report says. In the first half of 2010, improved corporate profitability and strong employment growth led to more business and personal travel. Domestic travellers remained the main source of growth for the industry, as most other developed economies continue to struggle, and the high dollar made Canada a more expensive destination for international visitors.
According to the joint report, in the first half of 2010 the foodservice industry saw consumers starting to return to restaurants and spend more money dining out, due to the strong job creation of late. Unfortunately, sales were slow to recover at full-service restaurants, which bore the brunt of the recession’s effects. The good news is rising sales and price increases will allow industry profit to recover to its pre-recession peak of $1.3 billion in 2010.
Canada’s Beef Exports Growing
In a major victory for Canadian beef producers, Canada has won duty-free access to 20,000-tonnes-plus of beef in the large European Union market, an arrangement that should generate $10 million of revenue each year, according to the Canadian Beef Export Federation (CBEF). The EU agreement also provides compensation for the EU’s ban on beef from animals that are administered growth hormones. “These export results clearly demonstrate the importance of diversified markets to the prosperity of the Canadian industry,” said Ted Haney, CBEF president, in a statement released earlier this year that announced the growing international exports of beef. “At a time when the value of our trade with the U.S. is dropping, the relative stronger consumer markets and stronger currencies of key beef export markets in the global marketplace are providing us with high and increasing value for our beef. The combination of all markets contributing value to our industry will send the signal for stability and then growth and prosperity.”
Minimum Wage Hike Considered in B.C.
The B.C. government is seriously considering a minimum wage hike, the Canadian Press reports. The province has the lowest minimum wage rate in the country, which has been frozen at $8 an hour for the past 10 years. Now, Iain Black, the province’s Labour Minister, has announced he and his staff will consult with business and labour leaders on how to proceed with the proposed change. Also up for discussion will be how to better clarify workplace standards, improve enforcement and respond more quickly to complaints, the CP reports. “The workplace is changing constantly,” Black was reported as saying in B.C.’s Terrace Standard. “I’ve asked staff to gather views on how we can best ensure employment standards reflect the realities and needs of employees and employers in 21st-century workplaces.” Black is supported by Moira Stillwell and George Abbott, both potential candidates for Liberal party leadership in the province. Minimum wage increases in other provinces have been contested by the Canadian Restaurant and Foodservices Association.
Delta Introduces Apple iPads Food-Ordering System at Select Airports
Delta Airlines, at New York’s JFK and LaGuardia airports, is stepping things up, providing Apple iPad tablets to customers so they can order food and beverages at kiosks near departure gates; delivery is guaranteed within 10 minutes. Beginning Nov. 19, some 200 iPads were introduced by the airport restaurant operator OTG Management in partnership with Delta, at Croque Madame in Terminal 2 and Bar Brace in Terminal 3 at JFK and Crust in Terminal D at LaGuardia. “As part of our aggressive plan to invest and improve our facilities at JFK and LaGuardia, Delta is fully committed to enhancing the experience for our New York customers with amenities that include not only superior food and beverage choices but also services that make the airport experience seamless and efficient,” Gail Grimmett, Delta’s senior vice-president New York, said. Earlier this year, Delta introduced two programs with OTG, at LaGuardia and JFK, to substantially reinvent the in-airport dining experience. At LaGuardia, OTG is introducing 13 new food and beverage concepts throughout Terminal D, while new full-service cafés and bars at four Delta Sky Clubs have been introduced at JFK. For more information, click here.
Tim Hortons Announces National Acceptance of Debit
The Oakville, Ont.-based Tim Hortons has caved to customer demand and introduced debit at approximately 90 per cent of its 3,000+ locations across Canada. The coffee and doughnut chain had already offered the option to pay by credit card but resisted implementing debit payment due to the small average check size. Last week, that changed. “Debit is a very popular form of payment in Canada,” Roland Walton, chief operations officer, told the Toronto Star. “We see it as a great opportunity to give the guest what they are looking for.” Due to overwhelming demand, Tim Hortons introduced debit in the Western provinces in 2003, and, now that execs are confident speed of service and security won’t be compromised, the trend has moved eastward.
New Coalition Offers Savings
The Ontario Restaurant Hotel & Motel Association (ORHMA) in partnership with Toronto Hydro and Enbridge Gas Distribution, has launched Green-Eats, a new program that provides one convenient location for local restaurants to source programs and financial incentives to help pay for the cost of energy-efficiency retrofits. “The benefits of being a green business go beyond saving energy. Businesses that do the right thing are often rewarded by lower operating costs and positive customer feedback,” said Anthony Haines, president and CEO of Toronto Hydro. “Toronto Hydro is proud to support restaurant owners by offering business incentive programs like Green-Eats to our menu of conservation programs.” The new program provides quick green solutions to restaurateurs. “We’re making it easy for Toronto restaurants to participate and understand incentives available to them,” said Fatima Finnegan, director, Corporate Marketing and Development, ORHMA. Green Eats participants receive incentives for energy improvements in lighting, water use, ventilation, air conditioning and other qualifying upgrades related to energy efficiency. News of the program launch comes on the heels of a recent Toronto Hydro-Electric System poll, which found seven out of 10 Torontonians would prefer to dine at a green establishment.
Canadians Crave Healthy QSR Foods
At least 20 per cent of Canadians want healthier food options at quick-service restaurants and are willing to pay as much as 13 per cent more for it, according to a recent NPD Group study, Canada Foodservice MegaTrends 2010. “There is no doubt Canadians are increasingly looking for healthier and lighter food choices overall,” said Robert Carter, executive director, Canada Foodservice, The NPD Group. “While many people turn to fast-food restaurants for indulgence, a growing number of Canadians are seeking smaller portion sizes and nutritious menu options in these establishments.” While acknowledging that some chains have addressed the concern, the study shows that such options “remain few and far between.” According to the report, fast-food operators should make sure their healthy fare encompasses the following: taste, quality, good portion size, convenience and portability.
Americans Eating Out More
The U.S. consumer’s appetite for eating out is improving, according to three recent studies. As reported two weeks ago in TheWhat’sOnReport, the National Restaurant Association’s (NRA) Restaurant Performance Index (RPI) — a respected monthly composite index tracking the health and outlook for the U.S. restaurant industry — stood at 100.3 in September, up 0.8 per cent from its August level. In addition, same-store sales rose in September for the first time in six months. “It’s a substantially better environment than it’s been for years,” said Hudson Riehle, NRA’s research chief. Riehle reported restaurant operators are more optimistic about an improving sales environment in the months ahead with 43 per cent expecting to have higher sales in six months compared to the same period last year.
To add to that, the NPD Group’s November foodservice market research report shows families with children started visiting restaurants more this summer, up one per cent in the quarter ending August, following a three-year decline. “Although the visit increases reflect just one quarter, the return of parties with kids is another sign that business is beginning to pick up for the restaurant industry,” said Bonnie Riggs, a restaurant industry analyst for the NPD Group.
Finally, Ron Paul, president of Technomic Inc., is positive. “Consumers are returning to their old habits,” he recently told USA Today. According to the newspaper story, Paul said the U.S. restaurant business is up in all sectors and the overall same-store sales became positive following three consecutive years of negative numbers.
NRA Show to Remain in Chicago until 2016
The NRA Restaurant, Hotel-Motel Show and the International Wine, Spirits & Beer Event will remain in Chicago’s McCormick Place through 2016, according to the National Restaurant Association. Dawn Sweeney, NRA president and CEO, made the announcement last week saying, “Along with all that the city of Chicago has to offer, McCormick Place — with the new legislation being implemented — will now provide an exhibitor-friendly, hassle-free and cost-effective facility that makes for an outstanding tradeshow environment.” A written announcement was also available to assure exhibitors who had been critical of the venue in the past. “McCormick Place has made a commitment to enhance its service and value at the NRA Show. Allowing exhibitors the option to undertake a number of tasks they were previously precluded from engaging in, along with decreased foodservice and electrical costs, are among the concrete positive steps that will make the venue highly attractive and will place it on a level playing field with other cities.” The event attracts some 66,000 attendees and exhibitors from all 50 states and more than 100 countries, including Canada.
Restaurateurs, Hoteliers, Take Part in New Green Building Programs
McDonald’s, Pizza Fusion, Starbucks and Starwood Hotels & Resorts were key players in implementing two new Leadership in Energy & Environmental Design (LEED) green building programs for the internationally recognized green-building certification system. The U.S. Green Building Council (USGBC) has launched a LEED for Retail green building rating system, and the LEED Volume Program, which is designed to meet the certification needs of high-volume property developers. Nearly 100 national and independent multi-unit retailers and franchisees have participated in the pilot program since its launch in 2007, providing valuable feedback to bring the rating systems’ development to this newest stage. For more information, click here.
Toronto We Care Bowling Event Raises $150,000+
More than $150,000 was raised for physically disabled children in Toronto last week when 46 bowling teams, comprised of 300 reps from the foodservice industry, filled Mississauga, Ont.’s Planet Bowl for the 13th Annual We Care Bowling Challenge. The two We Care ambassadors, Tyler Preece and Sydney Weaver, were on hand to accept the cheque, which translates to 760 days at camp for disabled children next summer. Sysco Canada was a big part of that success, generating more than $43,000 in pledges and capturing the top fundraising team trophy. Cardinal Meat Specialists ($26,442), Janes Family Foods ($18,700), Aramark Canada ($16,051) and Gordon Food Service ($10,000) were the remaining top five fundraising teams. Meanwhile, Brand Culture’s take on the cowboy theme garnered its team the spirit award. The fundraising event, which has gone national since its inception in Toronto 13 years ago, debuted in Calgary last week, raising more than $7,000 thanks to the 12 participating teams. The Vancouver branch held its bowling event Oct. 1, when 24 teams generated more $18,000. For more information, click here.
Three Tim Hortons Franchises Earn $10M for Trillium
Mississauga, Ont.’s Trillium Health Care Foundation has announced its biggest-ever private donation — a $10-million contribution from the non-profit group who owns its Tim Hortons franchises. The three outlets bring in about $700,000 a year in profit after paying staff that operate the locations, as required under Tim Hortons’ franchise rules. “Imagine how much money we could make if we could run the franchises with volunteers,” David Voyce, a restaurant and hospitality industry veteran appointed executive director by Volunteers of Trillium Health Centre, is reported as saying in the Toronto Star. The $10-million gift marks the start of a $110-million fundraising campaign to build a cutting-edge seniors’ facility.