2013 review predicts minimal growth for next year, but indicates opportunities in current trends
TORONTO, December 2, 2013 – With 2013 coming to a close, there is no better time to review what Canadians have spent the last year eating and where those meals have been coming from. A series of recent studies* from The NPD Group take a close look at how our dining habits compare to years past and what those trends likely mean for the foodservice industry in 2014.
Canadians spent more at restaurants this year than in 2012 – a three per cent increase that surpassed $49 billion in sales – despite consumer traffic having remained flat. The number of restaurants across the country also increased, adding another 1,000 units to the foodservice landscape, though well-known chains are overthrowing smaller independent establishments.
“Independent operators that are not prepared to steal share from their more popular counterparts will fold under the pressure of a highly competitive marketplace,” said Robert Carter, executive director of Foodservice at The NPD Group. “The fight for dollars was very aggressive this year and, out of necessity, the same competitive attitude is expected to uphold through 2014.”
Any chain or independent operator that was able to increase sales by more than three per cent in 2013 has been growing at a faster rate than the overall market, but The NPD Group forecasts that it will be challenging to convince Canadians to dine out more than they already have been. Despite flat traffic, however, there are a few segments of the restaurant industry where customer traffic is expected to grow.
Canadians are still motivated by the menu innovation at burgers operators, so this quick-service segment is expected to continue to do well. In the past five years, players in this category have successfully expanded their menus beyond their core burger offerings, with key growth (nine per cent since 2008) having taken place during the end-of-day snacking period. To this end, snacking increased steadily during the same timeframe and has also attracted more consumers to quick-service coffee operators.
“The snacking trend shows no sign of slowing down and while this is promising for quick-service restaurants, it’s taking its toll on the full-service sector,” continued Carter. “Visitation for this group has been on the decline for the past several years and much of this is due to Canadians’ increased need for food on the go.”
Traffic in the full-service segment is down 89 million visits per year over 2008, and the per-capita use of these restaurants has decreased from 55 visits per year in 2008 to 48 visits today. Though limited overall market growth is anticipated in 2014, spending is still expected to increase in the full-service segment, but operators will need to steal share from competitors to grow.
“The battle for share in the full-service segment led to a series of brand and chain consolidations in 2013,” says Carter. “Given the continuing struggle for growth in this segment, I would expect more consolidations in 2014.”
|A Look Into the Future of Foodservice||This study provides a unique perspective on how foodservice will evolve over the next five years. Examine restaurant segments, categories, visit situations, and specific food and beverage products|
|CREST®||CREST® is the who, what, when and where of foodservice, operating continuously in Canada since December 1993. The sample for this service is approximately 35,000 individuals per quarter.|
|ReCount||ReCount, The NPD Group’s restaurant census database, provides insight into chain and independent restaurants. Restaurant units can be prioritized by service type and food specialty within QSR and FSR segments, and by geography, from the national level down to specific unit addresses.|