Canadian Pizza Magazine

News
Restaurant traffic stalled but growth possible through innovation: NPD Group


January 27, 2017
By Canadian Pizza

Toronto — Canadian restaurant industry traffic will remain stalled in 2017, but restaurants who innovate and take advantage of technology and loyalty programs will draw in much-needed new customers, according to The NPD Group.  

The new year will bring little to no traffic growth for the total Canadian food-service market, the research firm said in a news release.

“In today’s flat food-service environment, operators can find pockets of growth by differentiating themselves from the competition,” said Robert Carter, executive director of foodservice at The NPD Group, in the release. “Many of the key drivers of innovation and growth that these operators should consider are based on the notion of staying relevant in the mind of the consumer. These drivers include introducing innovative products, unique promotions, competitive pricing, stating the benefits of eating at restaurants versus home, and delivering an enjoyable experience.”

Other trends to watch for in 2017 include:

Advertisment

The Future Is Now: The importance of millennial customers will accelerate the foodservice industry’s need to be more innovative, as these cohorts are always looking for that “experience,” something new and different. Without innovation, operators will fall out of the consideration set and risk being overlooked by a large portion of the population.

Personal Choice Reigns: To stay current and relevant in this overcrowded restaurant marketplace, operators need to serve the foods people crave and be willing to customize according to consumers’ personal choices. In 2017, more restaurant operators will offer digital menu options, which will enable consumers to customize their orders.  

Home Sweet Home: For several years now, more than 80 per cent of meals have been sourced from home; fewer than 20 per cent have been sourced from food service, and dollars are evenly split between the two. Commodity costs are expected to continue their decline and this may help restaurant operators in terms of offsetting higher prices for labour and operational costs. However, as the gap widens between away-from-home and at-home food costs, it will make for a more challenging environment for operators to get a greater share of consumers’ wallet. 

Technology: Mobile ordering will grow exponentially. Starbucks is a prime example of the opportunity that exists with this technology. The chain has been on the leading edge of creating ways for customers to place their orders using numerous platforms. This is convenience at its best. Look for many restaurant operators to follow suit and capitalize on this growth opportunity.

Delivery: Third-party providers will continue on a growth path. These third-party delivery services, like JustEats, UberEats, and Ritual, are becoming competitors to traditional delivery options. Taking advantage of the increasing popularity of delivery will provide restaurant operators with another avenue to drive traffic.

Restaurant Loyalty Programs: More restaurant operators are likely to develop loyalty programs in 2017 to entice customers to visit their restaurants. Historically, these types of programs have been targeted to existing customers, but in 2017 there will be more emphasis placed on attracting visits from consumers who visit restaurants less frequently.