Carry-out, drive-thru visits drive modest QSR growth

Dec. 23, 2014, Toronto – The Canadian quick-service
restaurant segment, which accounts for 4.3 billion annual consumer visits and
generates $23 billion a year, will grow only modestly over the next seven years,
according to the NPD Group.

Dec. 23, 2014, Toronto – The Canadian quick-service
restaurant segment, which accounts for 4.3 billion annual consumer visits and
generates $23 billion a year, will grow only modestly over the next seven years,
according to the NPD Group.

Quick-service restaurant (QSR) visits, which increased only
one per cent over the past several years, are forecast to increase a little
less than one per cent per year from 2013 through 2020, based on NPD’s 2020
Vision: The Future of QSR report.

The slight traffic growth expected is driven by population
increases and not actual visits since per capita visits are forecast to
decline, said the research firm in a news release. Total commercial foodservice
traffic, of which QSR represents two-thirds, is also expected to grow less than
one per cent annually through 2020. 

Contributing to the overall QSR traffic growth over the next
several years are off-premise QSR visits, mainly carry-out and drive-thru,
which are forecast to grow by 10 per cent. On-premise visits, on the flip side,
are expected to increase by one per cent. The slower growth forecast for
on-premise will be a challenge for QSR operators since eater cheques tend to be
lower for off-premise occasions, and operators will be challenged to consider
ways to boost average cheque, says the report, which bases its forecast on
aging and population dynamics as well as trend momentum. 

“The challenge over the next several years will be for quick
service operators to incent their customers to eat on-premise,” says Robert
Carter, executive director, NPD Canada Foodservice, in the release. “Operators
must be prepared to deal with this continued shift towards off-premise
occasions by providing consumers with convenient, flexible meal solutions
throughout the day while focusing on fast/convenient service.”

In terms of meal and snack times, QSR lunch, which accounts
for nearly a fourth of all visits, will show very little growth over the next
seven years. Affected by higher unemployment, brown-bagging, and the impact of
more consumers working from home, lunch traffic has grown by only one per cent
over the past six years. NPD’s forecast shows breakfast, which has been the
only meal time, showing consistent and strong growth, and PM snack growth,
keeping pace with overall QSRR visit growth. 

“Given this outlook, the ‘battle for market share’ will
become very intense for QSR operators,” said Carter. “In this competitive
marketplace, foodservice marketers need to discover growth opportunities,
mitigate risk, and fine-tune long-term strategies in order to succeed.”