Food-services outlook: 10 nuggets from the Conference Board of Canada’s latest report
By Canadian Pizza
By Canadian Pizza
Ottawa – Growth in breakfast restaurant visits, a shift from full-service to limited-service and shrinking disposable income are among the takeaways from The Conference Board of Canada’s latest outlook for the food-service industry.
The Canadian Industrial Outlook for Food Services has delivered its twice-a-year report, which predicts both competitive times ahead and room for growth in such areas as breakfast service and street vending.
Here are 10 takeaways that may offer food for thought for restaurants in general and pizzerias specifically:
- The food-services industry is highly fragmented: three-quarters of establishments have fewer than 20 employees.
- There has been a permanent shift from full-service to limited-service restaurants since the end of the 2009 recession.
- While street vendor operations are still a minor part of the restaurant industry, they are projected to grow to $300 million by 2020.
- Profit margins in the industry are very low, averaging just 2.3% in the past decade.
- A projected slower growth in real disposable income will limit the potential for consumers maintaining their current pace of spending growth, leading some to choose less-expensive restaurants or to spend a larger share of their food dollar on groceries.
- Food was the only major consumer category to experience a price decline in 2016, and while lower food costs is welcome news to the industry, fierce competition could force restaurants to pass on their cost savings in the form of lower prices.
- Consumers may be encouraged to dine at home if restaurant prices do not weaken.
- Strategies to tempt baby boomers to eat out may include offering foods that speak to health-related concerns, including digestive and heart health.
- Rising demand for fast and portable breakfast options has supported strong growth in restaurant breakfast traffic over the past year. Breakfast now accounts for just under one in five restaurant visits.
- Remaining flexible about changing trends will be key for operators to avoid overcommitting to fads.
Overall, the report suggests an overall positive outlook, with cost growth held in check by weaker food prices and sales growth slowing but remaining positive. For more information, visit The Conference Board of Canada website.
Source: The Conference Board of Canada, Canadian Industrial Outlook: Food Services, March 2017.