VANCOUVER – B.C. diners are eating out less and spending less, but not because of the economy, the HST or even strict liquor laws – the problem is they are bored, international consumer and retail market research firm NPD Group says.
The B.C. full service dining market represents $4 billion a year in sales and in 2010 lost nearly $111 million in sales or 11 million visits, Robert Carter, NPD executive director for food service said in an interview.
But while the introduction of the HST and strict liquor laws do have an impact on the marketplace, B.C.’s unemployment rate is lower than the national rate, and consumer confidence is higher than the rest of the country, Carter said. So while economic impacts play a role, they are not a key driver to full service restaurant traffic declines.
“It would appear the restaurant consumer in B.C. is much more sophisticated than restaurant consumers across Canada,” Carter said citing a theory that B.C. consumer expectations are so high that consumers are now bored. Although B.C. is the culinary apex of the country, most full service dining restaurants (think Cactus Club and Earl’s) are now serving very similar menus – menus which are successfully expanding across the country, but no longer appealing to B.C. consumers who seek ever greater innovation and variety.
B.C. restaurant operators need to strengthen or establish key points of difference, Carter said. The key is going to be continuing to focus on innovation, quality, variety and then price, Carter said. The average eater’s bill in a full service restaurant in B.C. is 11 per cent higher than anywhere else in the country.
Full service dining traffic has suffered across the country, but B.C. is much more developed for full service dining than the rest of the country and therefore feels the pain more, Carter said. While B.C. full service restaurants lost $111 million last year, the rest of the country registered increased dollar sales. The full service restaurant segment in B.C. represents 54 per cent of total restaurant industry sales, significantly higher than the national average of 49 per cent.
Five key trends are shaping the B.C. and national market:
1. Consumers are cooking more at home. Seventy-five per cent of meals at home are prepared in 15 minutes or less.
2. Weekend restaurant traffic has declined.
3. Fewer families are eating out.
4. B.C.’s full service restaurant traffic continues to fall at double the national rate. In its third straight year of declines, traffic in B.C.’s full service restaurants dropped by four per cent in the past year compared to a two per cent decline nationally.
5. Consumers are cutting back on appetizers, side dishes and dessert. Customer traffic at supper is declining faster than at any other part of the day, but breakfast is growing in quick service restaurants.
Quick service restaurants are faring better as consumers move over to lower cost meals, but overall restaurant traffic is relatively flat, Linda Strachan, NPD food service industry analyst said. Burger operators and coffee-and-donuts operators have grown. Quick service restaurants that have been innovative in adding new menu items, particularly breakfast on the go, have been the most successful. Tim Hortons, McDonalds and A&W have been doing well, Strachan said.
NPD said consumers are seeking more menu innovation specifically in chicken dishes and salads, followed by pasta and seafood dishes.
Men want more variety in beef and pork. Women want innovation in salads and soup. The top five flavours consumers want include garlic, Italian influenced, Asian influenced and hot/spicy and Mexican/Latin influenced.
Families and the heaviest users of restaurants, those ages 18 to 24 and 25 to 34, are really cutting back on visits, Strachan said. That said, there were nearly 1.7 billion visits to sit down restaurants in Canada in the past year, or about once a week per person. There were 198 visits per capita to all restaurants with a quarter to sit down restaurants and the balance to quick service restaurants and prepared food from retail, snack bars, department stores or grocery rotisseries.
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