FAST-FOOD INDUSTRY CONTINUES TO BULGE

Sales up 4%, report indicates

TORONTO • The full-service restaurant business is stagnant in Canada while sales in the quick-serve sector keep growing, according to new data — even among the crowd who like to sit down and have a meal.

Annual sales at full-serve restaurants remained flat at $22 billion to the end of May, market research firm NPD Group Canada reports, while sales at quick-service restaurants rose 4.2 per cent to $24.2 billion. The remainder of Canada’s $49.2-billion restaurant business goes to the so-called home meal replacement category.

When you look inside the restaurants, the consumer shift looks even more dramatic: Quick-service establishments (QSRs) such as Tim Hortons and McDonald’s saw their dinein visits rise by six per cent during the year, NPD reports, while on-premise dining at full-serve casual dining establishments fell six per cent.

“Generally, consumers are going out to restaurants less often,” Robert Carter, executive director of food service at NPD, said in an interview. People are making the shift from fullservice into QSRs, or the subset of so-called “fast-casual” restaurants exemplified by chains such as Chipotle or Mucho Burrito.

“That lends itself more to sitting down and eating inside the location. Even if people are not going to a full-service restaurant, they still want to have the experience of going out and

A liquor licence may also be helping revenue and traffic

sitting in a restaurant.”

A liquor licence may also be helping revenue and traffic in the fast-casual segment, Carter added. At licensed fast-casual restaurant chains such as Mr. Greek, patrons typically dine inside, a practice that drives up the average dining cheque. “You treat it almost like a fullservice restaurant, but there is no table service,” he said.

Seven years ago, sales at quick-service outlets represented less than half of Canada’s $49.2-billion restaurant business and sales at full-service restaurants accounted for 50.2 per cent of the market.

But the format, exemplified by chains such as Swiss Chalet and Boston Pizza, has been struggling to recover since the recession.

In the meantime, classic fastfood chains such as McDonald’s have encouraged more patrons to dine inside by significantly renovating their restaurants with comfort in mind.

“They have added cafés, fireplaces and TVs,” Carter said. “Tim Hortons is doing the exact same thing and they are seeing gains in that on-premise dining. The benefit to them overall is that the average eater cheque when (consumers dine) on premise is considerably higher than when they go to the drive through or take out.”