Top chains and niche concepts open units while independent operators experience unprecedented store closures.

Last year, the Canadian restaurant footprint shrunk at a rate never before seen by The NPD Group Canada. Our ReCount® service has been tracking restaurant unit openings and closures since the turn of the century.

From 2000 through 2008, the restaurant industry averaged annual unit openings of nearly 1,400 stores a year. After the recession that took place between 2009 and 2012, the footprint began to fluctuate years of growth with declines but always netted out with increases. In 2013, the landscape began to shrink by 781 units, and a further 3,000 units in 2014. The footprint after 2014 is now closer to the size it was in 2005, resting around 69,200: a decline of four per cent.

Those declines impacted mainly independent operators while chains netted out growth of 25 units. It’s no coincidence that during this time, traffic to independents declined by five per cent while chains remained flat (The NPD Group, CREST® YE December 2014). Many of these closures for independents came out of the casual dining Asian category, impacting large markets like Ontario and British Columbia, but not Quebec where declines are sourced to a greater variety of independents.

So what types of restaurants are opening? Who can restaurants expect more competition from? In what categories should new operators open? Who should sales teams target?

Top chains are earning share and opening up stores. Most suppliers target large chains like Tim Hortons, Subway, Starbucks or McDonald’s that have large and growing footprints across Canada. They’re an important competitive target for stealing share, as well. However, these large chains can take a long time to make carefully-weighed decisions through their deep organization, and not everyone can come out on top. If you thought focus was already tightly held on those chains, it’s only getting tighter.

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