Increased competition, weaker consumer spending take a bite out of Canadian foodservice industry in 2017
One bright spot for the industry is strong growth in breakfast traffic, which rose by 6.3% in 2016 and now accounts for just under one in five restaurant visits.
An increasingly competitive landscape and weakening consumer spending will limit revenue growth to 3.9% for Canadian restaurants this year, according to The Conference Board of Canada's latest “Canadian Industrial Outlook: Canada's Food Services Industry.” That would be the industry's weakest performance since 2011.
"As restaurants vie for Canadians' food dollars, they will not only be competing against each other for market share, but with grocery stores as well. Dining at home is becoming relatively attractive compared with eating out, given slower growth in income and the fact that prices at restaurants have steadily risen despite a drop in grocery prices over the last year," says Michael Burt, director, industrial economic trends, The Conference Board of Canada, Canada. "Increased competition in the industry may drive the less-profitable independent restaurants out of business, as they struggle to compete with chains on food prices and keeping up with food trends."