There are a number of trends affecting the restaurant industry: digital disruption, changing eating habits, and new entrants to the market. Restauranteurs need to be aware of these trends in order to stay ahead of the competition.

The rise of food delivery apps has been swift, and many restaurants have begun offering some of their dishes on these apps. It’s a bit of a catch-22 situation for restauranteurs. If they’re not on the app, they lose out on potential new customers. But if restaurants are on the app, they have to pay a commission of anywhere from 10% to 35%.

While having someone else take care of delivery means restauranteurs don’t need to hire a driver, they also lose more control of the quality of the food once it leaves the kitchen. A third-party delivery service may not deliver the food quickly enough or some items might go missing, and the restaurant will take the blame.  

Although apps can bring in additional sales, it’s not yet known if those using the apps are new customers or existing ones. Still, if there are fewer customers coming into a restaurant, it means there aren’t as many opportunities to upsell high-margin items.

Eating trends are also changing, thanks in part to Canada’s increasingly diverse population and Millennials. The days of eating a lot of beef and corn are long gone as Canadians are consuming much more poultry and rice than ever before. Many consumers also want plant-based and healthier options, as well as sustainable and locally sourced food.

Many large chains have responded by offering meat alternatives made from plants, as well as beef and poultry raised without the use of steroids, hormones, or antibiotics. New chains have also emerged that cater to customers’ changing tastes.

Canada is usually the place that American chains go to first when they begin to expand internationally. A number of U.S. franchisors have set up shop here over the past few years, and more are expected to make their way across the border in the near future.  

Restaurant owners must continue to stay informed about industry trends in order to be more proactive instead of reactive.

In our next post, we’ll discuss how higher wages are affecting restaurant owners and operators. 

To learn more these issues and our survey, download BDO’s Franchise Restaurant Report 2019: Owners’ top concerns and trends affecting the industry.

Author

Lyn Little, CPA, CA, National Franchise Leader, Partner, Audit & Assurance, BDO Canada LLP. Lyn is a Partner and BDO’s National Franchise Industry Leader. Lyn connects restaurants with the right individuals or services that they need to grow and develop as an organization. She can be reached at llittle@bdo.ca or Direct: 905 633 4942