Table of Contents
Executive Summary
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- Top takeaways
- Market overview
- Impact of COVID-19 on restaurants
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- Figure 1: Short, medium and longer-term impact of COVID-19 on dining out, July 2020
- Opportunities
- Providing familiarity in uncertain times
- Building on new behaviours that COVID-19 has created
- Challenges
- Finding the right promotion to leverage
- Walking a fine line with marketing messaging
The Market – What You Need to Know
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- Foodservice is a stable industry, but is facing unprecedented declines
- Restaurants operate on slim margins, making it hard to survive closures
- Dining out is closely connected to disposable income
- Consumers’ safety concerns could impact restaurant visits
Market Factors
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- Foodservice is a stable industry, but is facing unprecedented declines
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- Figure 2: Canadian restaurant sales, 2006-19
- Figure 3: Restaurant sales, March 2019-May 2020
- Restaurants operate on slim margins, making it hard to survive closures
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- Figure 4: Dadawan Food Instagram post, May 2020
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- Figure 5: Mediamatic Eden Instagram post, May 2020
- Dining out is closely connected to disposable income
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- Figure 6: Canadian unemployment rate, June 2018-June 2020
- Consumers’ safety concerns could impact restaurant visits
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- Figure 7: Comfortable with visiting restaurants, July 2020
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- Figure 8: Wearing a face mask in public, April-July 2020
Key Players – What You Need to Know
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- Recipe Unlimited has expanded its brand portfolio
- FSRs are finding ways to adapt to the realities of COVID-19
- Third-party delivery services are making it difficult to remain profitable
- Lessons to be learned in how to discount prices strategically
- Dining out will look different until COVID-19 is no longer a threat
- Smartphone ordering will become much more common
- Artificial intelligence is the next logical step
What’s Working?
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- Recipe Unlimited has expanded its brand portfolio
- FSRs are finding ways to adapt to the realities of COVID-19
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- Figure 9: The Keg Steakhouse Instagram post, May 2020
- Figure 10: Scaddabush Instagram post, May 2020
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- Figure 11: Alo Restaurant Instagram post, April 2020
Challenges
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- Third-party delivery services are making it difficult to remain profitable
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- Figure 12: Tock Instagram post, March 2020
- Lessons to be learned in how to discount prices strategically
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- Figure 13: McDonald’s Canada Facebook post, May 2019
What’s Next?
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- Dining out will look different until COVID-19 is no longer a threat
- Smartphone ordering will become much more common
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- Figure 14: McDonald’s Canada Instagram post, April 2020
- Artificial intelligence is the next logical step
The Consumer – What You Need to Know
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- QSR usage and brands
- FSR usage, visit drivers and ordering behaviours
- Using dayparts to predict impacts from COVID-19
- The role of technology in restaurants
- Menu item promotions
- New trends in restaurants
QSR Usage and Brands
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- Most consumers visit QSRs
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- Figure 15: QSR visits, by age, April 2020
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- Figure 16: QSR visits, by household income, April 2020
- Chains dominate the QSR landscape
- McDonald’s and Tim Hortons are the clear leaders
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- Figure 17: QSR brand usage, April 2020
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- Figure 18: QSR brand usage: McDonald’s vs Tim Hortons, by age, April 2020
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- Figure 19: QSR brand usage: McDonald’s vs Tim Hortons, by race, April 2020
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- Figure 20: Tim Hortons True Stories: Proud Fathers, March 2017
- Figure 21: QSR brand usage: McDonald’s vs Tim Hortons, by region, April 2020
- Starbucks attracts a unique consumer
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- Figure 22: Visited Starbucks in past three months, by age and gender, April 2020
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- Figure 23: Visited Starbucks in past three months, by race, April 2020
FSR Usage, Visit Drivers and Ordering Behaviours
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- Two thirds of consumers visit FSRs
- Decision factors highlight consumer priorities at FSRs
- Most consumers look for good service
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- Figure 24: Reasons for choosing an FSR, April 2020
- Deciding on the best menu strategy
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- Figure 25: Reasons for choosing FSR: specific menu items vs something for everyone, by gender and parental status, April 2020
- Familiarity vs something new and different
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- Figure 26: Reasons for choosing FSR: familiarity vs something new/different, by age, April 2020
- Optimizing revenues with add-on menu items
- FSRs need diners to order more drinks
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- Figure 27: Beverages ordered at FSR, April 2020
- Appetizers, sides and desserts face similar challenges as paid beverages
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- Figure 28: Food add-ons ordered at FSR, April 2020
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- Figure 29: Food add-ons ordered at FSR, by race, April 2020
Using Dayparts to Predict Impacts from COVID-19
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- QSRs will be impacted by fewer people out at work
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- Figure 30: QSR dayparts, April 2020
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- Figure 31: QSR dayparts, by employment status, April 2020
- FSRs’ challenges will stem from the dinner daypart
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- Figure 32: FSR dayparts, April 2020
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- Figure 33: FSR dinner visits, by household income, April 2020
- Using dayparts to uncover opportunities for FSRs
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- Figure 34: FSR lunch visits, by race, April 2020
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- Figure 35: FSR breakfast/brunch visits, by age and gender, April 2020
The Role of Technology in Restaurants
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- Tablets can be a useful tool to improve FSR dining experiences
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- Figure 36: Tablets at FSR, by age, April 2020
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- Figure 37: Tablets at FSR, by parental status, April 2020
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- Figure 38: Tablets at FSR, by language spoken at home, April 2020
- Tech could be a creative solution to COVID-19 challenges
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- Figure 39: Paramount Fine Foods Instagram post, June 2020
- Online research plays a significant role in the foodservice industry
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- Figure 40: Online research for restaurants, by age, April 2020
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- Figure 41: Online research for restaurants, by race, April 2020
Menu Item Promotions
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- Restaurants need to do cost-benefit analysis on promotions
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- Figure 42: Promotional menu items most likely to order, April 2020
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- Figure 43: QPC BLT | McDonald’s Canada, January 2019
- Figure 44: Big Mac Bacon | McDonald’s Canada, June 2020
- Health and plant-based promotions should only be used strategically
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- Figure 45: Promotional menu items most likely to order: health-focused and meat-free items, by gender, April 2020
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- Figure 46: Promotional menu items most likely to order: health-focused and meat-free items, by race, April 2020
New Trends in Restaurants
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- Consumers are becoming more environmentally conscious
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- Figure 47: Attitudes towards waste reduction in restaurants, April 2020
- Using alternative proteins to give consumers a healthy, eco-friendly option
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- Figure 48: Plant-based meat at restaurants, by age, April 2020
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- Figure 49: Higher priority on eating healthy, by age, June 2020
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- Figure 50: Maple Leaf Foods Instagram post, June 2020
- Figure 51: Plant-based meat at restaurants, by race, April 2020
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- Figure 52: A&W Canada Twitter post, October 2014
- Figure 53: A&W Canada Twitter post, October 2018
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- Figure 54: Burger King Twitter post, July 2020
- Consumers want what they want, when they want, where they want
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- Figure 55: Ordered breakfast items outside of breakfast hours, by age and gender, April 2020
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- Figure 56: Ordered delivery from FSR, by age and gender, April 2020
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- Figure 57: Dine in at a grocery store, by age and gender, April 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
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