Restaurant menus evolving to fire up sales

Despite Canada’s vibrant job market and low unemployment rate, waning consumer confidence is taking the wind out of household spending. In the most recent report from the Conference Board of Canada, October’s consumer confidence index dipped to its lowest level since December 2018 due to growing economic uncertainty and strained household finances. As a result, real consumer spending is projected to remain weak in Q3, following a scant 0.5% annualized growth in Q2.

The foodservice industry is not immune from the slowdown in consumer spending. In Restaurants Canada’s latest Restaurant Outlook Survey for Q3, the share of foodservice operators that saw lower same-store sales exceeded the share that saw higher sales for a third consecutive quarter. Overall, 29% of foodservice operators in Canada reported higher same-store sales in Q3, while 35% posted lower same-store sales.

Although the first three quarters of 2019 were disappointing for many restaurant operators, 46% of restaurant operators are optimistic about the next 12 months, down slightly from 48% in Q2.

Those feeling optimistic cite the quality of their guest experience and menu offerings as reasons they believe they will weather any economic downturn.

For many restaurants, menus are evolving to meet consumer demands and help boost sales. In our survey, restaurants have recently expanded or are planning to expand their menus to include new appetizers, healthier menu items, and locally sourced foods.

Appetizers provide restaurants with an opportunity to explore new and unique flavours and ingredients. Due to the lower price, guests are more likely to sample these dishes compared to a main entrée. Appetizers are also part of a larger trend of guests seeking smaller portion sizes, wanting to share and sample, eat on-the-go, and spend less money, too.

While many guests choose to order items on the menu as an indulgence, operators are also adding menu items to appeal to those guests wanting healthier options. As a result, we see more plant-based options and meatless mains and side dishes.  Other restaurants are adding menu items that reflect the latest food trends, such as the ketogenic diet.  There is a real opportunity to shift perceptions of dining out and reach consumers who think eating healthy is only possible at home.

To learn other innovative strategies to help your business diversify and thrive, download your copy of Restaurants Canada’s Restaurant Outlook Survey for Q3 2019 here.