Restaurants in Canada decreasing overall, but chains are growing as independents decline
TORONTO, September 17, 2014 – Canadians who love the charm, authenticity and inimitable cuisine found only at their favourite local eatery better hurry and make a reservation. According to ReCount®, the annual restaurant census from leading global information company The NPD Group, 853 restaurants closed their doors between 2012 and 2013, the majority of which were independent establishments. Chains, however, are on the rise and have fared well in most provinces during the same timeframe, making them the bright spot in the declining industry.
Nationwide, chain restaurants grew by 52 units while independents decreased by 905. Looking specifically at each province, Ontario had the largest unit increase of chain restaurants (101) followed distantly by Quebec (42), but both provinces also had the largest decline of independents, down 366 and 264 units respectively.
“The numbers are most extreme in Ontario and Quebec because these provinces are catering to the largest populations nationally; as a result their foodservice industries are constantly evolving,” said Robert Carter, executive director of Foodservice at The NPD Group. “That said, it can be difficult for independent restaurants to survive in any market when up against trusted chains that are more familiar to the public and that have bigger budgets to fund their promotional campaigns.”
Country-wide data reveals restaurant unit declines in most provinces, with the only overall growth in Manitoba, Newfoundland, Prince Edward Island and Yukon. Similarly, these are the only provinces showing growth across both the chain and independent categories, with the exception of Yukon whose chains remained flat.
Chain and Independent Sub-Categories
Quick-service restaurants (QSRs), which fall within the overall restaurant count, mirror national trends. Zeroing in on this particular sub-category, QSR chains across Canada opened 152 doors while independents closed 716. Moreover, the relatively new fast casual segment is holding its own in the foodservice industry. With a steady year-over-year increase since 2009 and the opening of 101 new restaurants in 2013, fast casuals are predicted to be a continued source of revenue.
“Fast-casual restaurants – the healthier, more affordable middle ground between quick-service and full-service establishments – are still relatively underdeveloped in Canada, but are a happy medium for consumers in search of a meal away from home,” continued Carter. “This growing segment continues to thrive, and we are tracking the longevity of the chains and independents that fall within the category to determine if the changes are also reflective of national trends.”
Additional Growth/Decline Insights
The recession has had its impact on the foodservice industry’s market growth, as Canadians are still cautious about how much money they spend when dining out. Overall, a restaurant’s success is tied to the existing opportunities within a given segment, category or geography, but the more recent trends indicate that it may be a few years before foodservice is booming again in Canada, and before restaurateur and consumer confidence is restored.