Canadian dining chains boost sales, cut outlets

Canada’s top 200 restaurant chains boosted their sales by three per cent in 2008 while cutting the number of stores by 0.7 per cent, a new study reports.

Technomic, a Chicago-based food industry research and consulting firm, last week released its 2008 Top 200 Canadian Chains Restaurant Report, following the 200 chains which together command over 50 per cent of the Canadian restaurant industry, with a combined $22.8 billion in sales at their 22,530 units.

“The Top 200 Canadian chains continue to grow sales while shedding underperforming units by focusing on the value proposition for the customer,” Darren Tristano, Technomic’s executive vice-president, said in a release.

“It’s not just about pricing,” he said. “The leaders have retooled their menus in many cases with local and organic fare, stepped up value-oriented limited-time promotions, and revamped restaurant decor. The limited-service category, and in particular the fast-casual segment, continues to benefit from the value focus and trade-downs from full service.”

Tim Horton’s, which announced plans Monday to reorganize itself as a Canadian public company, again led in sales Canada-wide with $4.2 billion in 2008, up 7.7 per cent from the previous year.

Second and third were the U.S. chains McDonald’s and Subway with respective sales of $2.7 billion and $1 billion in 2008, Technomic said.

Of the top 200, 70.1 per cent of sales ($16 billion) were made at 19,323 “limited service” restaurants. The number of limited-service outlets dropped 0.6 per cent from 2007, Technomic noted.

The limited-service group includes “fast-casual” restaurants, which form a relatively small share of limited-service sales at 1.9 per cent, but which grew their total sales by 11.7 per cent. “Chains to watch are U.S. players Panera Bread and Chipotle Mexican Grill, both of whom expanded into Canada last year,” Technomic said in a release.

The largest clusters within the limited-service group for 2008 were “hamburger” ($4.6 billion in sales), “donut” ($4.3 billion) and “other sandwich” ($1.8 billion). The fastest growing limited-service clusters were Asian (sales up 14.5 per cent, with Sushi Shop and Thai Express growing 40 and 51.2 per cent respectively), Mexican (7.3 per cent, with Taco Del Mar up 32.4 per cent) and “donut” (7.1 per cent, with Tim Horton’s up 7.7 per cent).

“Full-service” restaurants, meanwhile, represented 29.9 per cent ($6.8 billion) of the Top 200 chain sales, growing 4.2 per cent over 2007 levels. Their number of stores dropped 1.1 per cent to 3,207, and now account for 14 per cent of the Top 200 chains’ total units.

Restaurants in Technomic’s Top 200 have previously ranged from coffee chains such as Starbucks and Second Cup and burger chains such as McDonald’s, Wendy’s and Burger King, through to full-service chains such as Earl’s, The Keg, Tony Roma’s and Hooters.

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