We’ve been talking about Canada’s anemic full-service-restaurant market for longer than some players in the category care to admit and the story has remained unchanged. Traffic has maintained its year-over-year slip in this competitive landscape, most recently down four per cent in the year ending May 2017. It was the fourth annual decline, and not one of the top-10 operators posted a traffic gain during this time. Family visits and older patrons — both key to sustaining the more expensive FSR segment — are shrinking, too (with the value-crazed millennials now well and truly the visit-count leaders). Dollars are also down — by two per cent — and have been relatively flat since 2012 (though most of the top-10 operators managed to generate modest dollar gains this past year).
So what can FSR operators do to compete and — better still — flourish in this challenged space? According to this year’s edition of The NPD Group’s Full-Service Dining Report, full-service restaurant customers represent a cohort whose members are interested in “superior atmosphere, exceptional service and premium food quality.” Still, top operators are struggling to find differentiation on these imperatives and are suffering, in customers’ eyes, from homogeneity. As a result, restaurant goers are yanking their loyalty — it’s diminished across every top FSR operator over the last five years, while small chain operators and independents are picking up the slack.
Differentiation needs to come through two channels: technology and menu claims. Digital media far outweighs traditional media sources for information and restaurant websites claim the number-1 spot here. Good sites have easy-to-access basics, including menus, hours of operation, phone numbers, pricing, et cetera. That acknowledgement of websites’ superiority in the information-hunt game notwithstanding, only about half of the top brands have even reviewed their sites in the past three months. That might explain why, while smaller brands get more site visits, they don’t do well with conversions. The message? Customers aren’t finding what they want on the site and are choosing not to visit the restaurant.
This is where apps can help. Customers, says the research, use FSR apps in pursuit of coupons, discounts and info on ordering, pick-up and delivery — a growing trend in FSR and a potential source of additional traffic. For operators unwilling or unable to handle a delivery service, third-party options abound.
As for menu claims, the foundational backdrop is that consumers — particularly older ones — want to know where their food was made (locally or Canadian-sourced foods rule), who made it, how healthy it is and whether it was ever in the freezer (the top menu claim consumers seek is that foods are fresh/never frozen).
They also want to know whether it’s “all natural,” and doesn’t contain artificial flavours or colours.
Also important are high vegetable and fruit content and antibiotic-free meat. If something’s low in fat, sugar and calories, so much the better. Younger consumers want foods that are high in protein and have organically sourced ingredients. But if such rarified foods are what customers desire, are they also willing to pay for them? Yes, says the research. According to the report, consumers are most inclined to pay extra for organic foods — by as much as 17 per cent.
Full-service dining is clearly poised for a dramatic uplift for those restaurateurs who pay attention to the prevailing trends. Today’s consumers have specific requirements for the food they eat outside of their homes. Responsive FSRs need to not only provide them with it, but make some noise about their efforts.
Volume 50, Number 5
Written by Robert Carter