Quick-service restaurant (QSR) outlets will likely see the greatest sales gains in the years ahead even as full-service restaurants (FSRs) become less popular, according to the first annual Canadian Chain Restaurant Industry Review, an extensive research report commissioned by GE Capital and compiled by fsSTRATEGY and NPD Group Canada. Today, QSRs capture 64 per cent of total foot traffic and 44 per cent of all sales at commercial restaurants, while FSRs see 25 per cent of traffic and 49 per cent of industry dollars.
"As the economy moves from recovery to expansion Canadians are feeling somewhat less cautious about spending at restaurants," according to Ed Khediguian, GE Capital's senior vice-president of franchise finance. "Restaurant operators who understand what consumers are looking for in their dining experience will be able to earn a greater share of wallet in the coming years. That includes high-quality fresh foods, smaller portions, healthier options and ethnic twists for those in urban centres who have sophisticated palates."
The report forecasts that commercial foodservice traffic will grow by an average of 1.7 per cent annually from 2012 through 2016, modestly outpacing annual population gains of 1.1 per cent.
The most frequent users of restaurants remain Canadians aged 18 to 34, although their visits declined from 2008 to 2011. The only group that saw an increase in restaurant visits over that same period was those over 55 years of age, who are visiting QSRs more than before.
Canadian foodservice-industry sales are expected to increase by 3.1 per cent to $65.4 billion in 2012. The three fastest-growing restaurant categories are QSR yogurt, QSR Mexican and casual Asian formats.
Nationwide, more than 60 per cent of restaurant sales in Canada can be attributed to chain operators. Although Ontario and Quebec have the greatest commercial foodservice sales, chain penetration is lowest in Quebec and greatest in Atlantic Canada.
Despite having the greatest population, Ontario has only the third-greatest commercial foodservice sales per capita ($1,439.64) after Alberta ($1,897.93) and British Columbia ($1,711.90). Quebec has the second-lowest per-capita sales ($1,256.43) after Manitoba ($1,156.66).
Last year, nearly 1,500 restaurants closed, primarily independent operators, while chains remained relatively stable. Only two provinces had a net increase in restaurant units: Manitoba and Alberta.
from Western Investor July 2012
