Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Consumer foodservice by chained/independent; Consumer foodservice by type;
Consumer foodservice by type and chained/independent
Executive summary
Better economic conditions help pull the market out of low-growth years
The entire consumer foodservice market suffered after 2001 when a series of
negative events devastated the country' s tourism and hospitality industry.
This particularly affected the higher-cheque sectors such as full-service
restaurants and cafés/bars, but given their disproportionate share of total
value sales the entire market was negatively affected: constant value growth
between 2002-2005 never exceeded population growth, and some years saw
outright declines. Tourism remains shaky, but most of the other issues
affecting consumer foodservice have eased, and a booming fast food sector has
enabled value sales to see growth in 2006 above the population rate for the
first time since 2001.
Health-conscious consumers drive menu changes
Health concerns have been around for years, but it was only in the review
period that they have begun to seriously affect consumer foodservice. In 2004,
the low-carb craze prompted chains to offer bizarre menu selections, and trans
fats became a major issue in 2005, but 2006 saw an increasingly holistic
concern about health become apparent. With proposed nutritional labelling
threatening to harm the industry, the Canadian Restaurant and Foodservice
Association (CRFA) formed an association of consumer foodservice players to
promote a more low-key and voluntary form of nutritional labelling, called the
Nutrition Information Program.
Even more fundamentally, consumption is shifting away from ' unhealthy' to
' healthy' categories. Burger and chicken fast food have been some of the
biggest losers in this move, while Asian fast food and juice bars have been
booming. Menu changes that offer robust, healthy options have also been
embraced by some of the biggest operators. The recent rebounding by McDonald' s
Restaurants of Canada Ltd has been chalked up to many wise decisions,
including that to offer substantially healthier products, such as sliced
apples and salad.
Tim Hortons increases its leading position
Growing at a double-digit rate for the second year in a row, Tim Horton' s Inc
added nearly C$1 billion to its sales between 2004-2006. This rate and
magnitude of growth are simply unprecedented, and have enabled the company to
widen the gap between itself and the second-biggest consumer foodservice
chain, McDonald' s Restaurants of Canada Ltd. Tim Horton' s Inc has grown so
large that its performance affects the entire market, and unlike more maligned
chains such as Starbucks Coffee Canada Inc is increasingly responsible for
sharp declines in the independent fast food category.
Flexibility becomes a key issue for consumers
Consumers increasingly want flexibility from their foodservice outlets. This
may take many forms, but it is most particularly tied to takeaway and
delivery, and to co-locating and co-branding. Consumers are no longer as
interested in exclusive takeaway and delivery outlets as they are in standard
full-service restaurants and fast food venues that can also provide them with
takeaway and delivery services. Consequently, sales in 100% home
delivery/takeaway stagnated during the review period while casual dining
chains that embrace delivery -- such as East Side Mario' s -- performed well.
In addition, the co-locating and co-branding of two distinct consumer
foodservice fascias at one venue has risen in popularity. Consumers appreciate
the increased diversity of products they can buy from these outlets,
especially compared to a restaurant' s standard fare.
Growth in the forecast period will improve
Growth will be substantially better in the forecast period than it was during
the review period, as the economy remains generally strong and consumers
prefer convenience and flexibility over value. In addition, the shifting of
consumption within full-service restaurants from family outlets to casual
dining will boost value sales at a rate faster than the anticipated population
growth.
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