Limited-Time Offers Increase Competition In Flat Foodservice Industry

BBQ sandwiches, hot dogs and iced tea among Canadian favourites likely adapted 

TORONTO, July 22, 2014 – There are more than 72,000 restaurants in Canada, all of which are clamoring for clientele. Unfortunately, according to leading global information company The NPD Group, the number of customers going through their doors decreased by one per cent in 2013 to just over 6.6 billion annual visits and, looking ahead to the rest of 2014, traffic is predicted to remain flat. The summer months, however, are a ray of sunshine for the country’s crowded foodservice industry, as the warm weather and increased social outings typically mean a spike in restaurant traffic. In preparation for this, operators put an emphasis on promoting seasonal food and beverage items, but maintain their competitive edge with one crucial tactic: limited-time offers (LTOs). 

Currently, 45 per cent of the Canadian population visits a restaurant every day, which has decreased from 46.3 per cent one year ago. Restaurateurs hoping to draw crowds will add new twists to summer favourites with fresh menu items and original culinary techniques, and will introduce specialized service for an improved overall dining experience. Many of these offers will be in the form of LTOs created to generate interest and increase sales.

“From a global perspective, Canada has been the second most stable foodservice market over the last six years, but is challenged with maintaining steady day-to-day customer traffic,” said Robert Carter, executive director of Foodservice at The NPD Group. “LTOs are an important part of the restaurant industry’s marketing initiatives – particularly during seasonal periods – and these offers, designed to be short lived, can be an effective tool to increase brand awareness, attract visitors and bring in rapid revenue.”

Before restaurant operators start reinventing their menus, however, they need to keep in mind the ingredients consumers are getting excited about and the types of dishes they are gravitating towards. The table below outlines which customers have been most inclined to order which popular summer food and beverage items, giving operators insight into what is likely to pique the interest of Canadians’ this year:

As shown, BBQ pork or beef sandwiches, hot dogs, main-dish salads and seafood entrees are beloved across the widest consumer base, while beverage classics like iced tea, frozen coffee, alcohol and smoothies are appealing to the broadest demographics.

“Many childhood favourites are still well-liked menu items, but the incorporation of eccentric ingredients, mix of unusual flavour combinations and creation of alcohol-infused adaptations are putting an adult twist on traditional meals,” continued Carter. “Some restaurants also appeal to consumer curiosity with quirky food combos, like the Boston Pizza Pizzaburger, or will implement consumer voting campaigns to crowdsource their next big offering.”

Innovation can give foodservice marketers a jump on industry rivals, as consumers are often looking for ways to shake up familiar dishes. Creating excitement around a product that will be available for a short period of time generates a sense of urgency that compels customers to ‘get it before it’s gone’, but knowing what foods and beverages are the current palate pleasers and testing unconventional concepts before a big launch will be critical to success.

Study Source:

As the industry’s gold standard in Canada for market research information, Consumer Reports on Eating Share Trends® (CREST®) offers insight on consumer purchases of commercially-prepared meals and snacks. It tracks purchases in the commercial restaurant industry, as well as ready-to-eat foods / beverages purchased from other retail establishments, such as convenience and food stores.

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