Canadian restaurant industry revenues expected to reach $60B in 2015, says GE Capital report
By Canadian Pizza
By Canadian Pizza
April 17, 2015, Toronto – Canadian consumers continue to spend more and more at chain and branded restaurants, according to GE Capital’s annual Canadian Chain Restaurant Industry Review.
GE Capital will premier findings of the research report on the state of chain food service in Canada at the sixth annual Canadian Restaurant Investment Summit May 5-6 in Toronto. The event will include the annual C-Suite Survey, conducted by fsSTRATEGY and NPD Group Canada.
Foodservice industry sales are expected to increase four per cent to $59.8 billion in 2015. Diners spent more than $57.5 billion at commercial foodservice establishments in 2014, an increase of 4.9 per cent over 2013 and equal to approximately four per cent of the national gross domestic product.
Ontario and Quebec have the largest commercial foodservice sales at $22.2 billion and $10.5 billion, respectively, driven primarily by their larger populations. Per capita, Alberta has the largest commercial foodservice sales ($2,137), followed by British Columbia ($1,920). Quebec has the lowest commercial foodservice sales per capita ($1,278).
Nearly two-thirds (63.2 per cent) of restaurant expenditures take place at chains, which include local, regional, national or international businesses. Those in Atlantic Canada spend the most at chain restaurants (70 per cent). Quebec has the greatest percentage of independent restaurant expenditures – 44.6 per cent in 2014, down from 48.4 per cent in 2013.
The greatest opportunity in the foodservice industry today, according to C-Suite Survey participants, is menu innovation and refinement, followed by concept refinement.
“Foodservice industry leaders recognize the need to be dynamic in response to the ever more sophisticated consumer, with more choices, more customization, more segmented or targeted positioning, healthier options and better-quality ingredients and flavours,” said Edward Khediguian, senior vice-president of GE Capital’s Franchise Finance business in Canada, in a news release. “In addition, there’s an awareness of the reduction in the span of concept and segment life cycles. They see the value of trying new concepts, such as fast casual or premium options, to take advantage of the ongoing trend toward eating meals away from home.”
Much as in 2014, operating costs continue to be the single greatest challenge for survey participants. However, in 2015, cost of goods sold was mentioned as a challenge by more respondents. The rising cost of proteins was cited frequently, as well. Labour costs and productivity were mentioned at the same frequency as in 2014.