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Quick-service restaurant (QSR) outlets will likely see the greatest sales gains in the years ahead even as full-service restaurants (FSRs) become less popular, according to the first annual Canadian Chain Restaurant Industry Review, an extensive research report commissioned by GE Capital and compiled by fsSTRATEGY and NPD Group Canada. Today, QSRs capture 64% of total foot traffic and 44% of all sales at commercial restaurants, while FSRs see 25% of traffic and 49% of industry dollars.
“As the economy moves from recovery to expansion, Canadians are feeling somewhat less cautious about spending at restaurants,” said Ed Khediguian, GE Capital’s senior vice president of Franchise Finance. “Restaurant operators who understand what consumers are looking for in their dining experience will be able to earn a greater share of wallet in the coming years. That includes high-quality fresh foods, smaller portions, healthier options and ethnic twists for those in urban centres who have sophisticated palates.”
The report forecasts that commercial foodservice traffic will grow by an average of 1.7% annually from 2012 through 2016, modestly outpacing annual population gains of 1.1%.
The most frequent users of restaurants remain Canadians aged 18 to 34, although their visits declined from 2008 to 2011. The only group that saw an increase in restaurant visits over that same period was those over 55 years of age, who are visiting QSRs more than before.
The complete Canadian Chain Restaurant Industry Review is being released today at GE Capital’s third annual Canadian Restaurant Investment Summit, a unique forum for those who are passionate about investment opportunities and cutting-edge trends within this country’s vibrant restaurant industry. The research and resulting insights will serve as a platform for discussions around investment decisions and a wide variety of other industry-related topics.
Restaurant Trends
Canadian foodservice industry sales are expected to increase by 3.1% to $65.4 billion in 2012. The three fastest-growing restaurant categories are QSR yogurt, QSR Mexican and casual Asian formats.
Nationwide, more than 60% of restaurant sales in Canada can be attributed to chain operators. Although Ontario and Quebec have the greatest commercial foodservice sales, chain penetration is lowest in Quebec and greatest in Atlantic Canada.
Despite having the greatest population, Ontario has only the third-greatest commercial foodservice sales per capita ($1,439.64) after Alberta ($1,897.93) and British Columbia ($1,711.90). Quebec has the second-lowest per capita sales ($1,256.43) after Manitoba ($1,156.66).
Last year, nearly 1,500 restaurants closed, primarily independent operators, while chains remained relatively stable. Only two provinces had a net increase in restaurant units: Manitoba and Alberta. The metropolitan areas that added the most restaurants over the course of the year were Port Hope, Ontario and Salaberry-de-valleyfield, Quebec.
About GE Capital, Canada
With more than 20 offices throughout Canada, GE Capital (gecapital.ca) offers a wide variety of financial products and services to address commercial financing and fleet management needs in all phases of a business’ lifecycle. From equipment finance to working capital and growth financing to large asset-based and restructuring loans, we apply our wealth of industry expertise and develop custom solutions for your company. Some of the industry sectors we specialize in include transportation, construction, healthcare, agriculture, forestry, manufacturing, oil and gas, wholesale and retail, and restaurant and hotel franchises.
GE Capital (gecapital.com) offers consumers and businesses around the globe an array of financial products and services. Follow company news via Twitter (@GECapital).
GE (ge.com) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works.
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