The long-term forecast from 2019-2022 indicates that while belts will tighten with mortgages climbing, food sales will continue to climb for both low-end quick service restaurants and high-end full-service restaurants. Commercial foodservice sales are expected to grow by an average of 3.9 per cent per year based on Restaurant Canada’s research based on current consumer behaviour.
Due to “modest productivity gains and slower population growth,” there will be restraint in real disposable income growth to 1.3 per cent per year. However, the Millennial population will be the real drivers in the economy, as they will have more disposable income than family-bound Canadians.
The generation with the most disposable income will be the Millennials; Currently, Millennials use quick pick-up and self-serve restaurants or splurge at the occasional full-service restaurant, and with house prices climbing, the same trend is expected to continue. Offering smaller meals such as snacks and lunch would be a benefit to either age group. Snacks have seen a 33 per cent increase in 2017 and lunches have seen an increase in sales by 26 per cent.
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According to Hugh Johnston, Strategic and Financial Architect, boomers entering retirement, and “are getting their first does of ‘fixed income living’ and are having more time on their hands. Millennials are suffering from underemployment with many still living at home with their parents.” This means that small bakeries or quick-service restaurants would do well to invest more time creating an active social media presence and offer benefits such as points or discounts through loyalty programs.
This means that people employed in the foodservice industry can expect an uptick in take out and self-service restaurant chains such as Tim Horton’s and Subway. There will also be more activity in higher-end restaurants for the Millennials who are driven by social media and have more income to splurge on more popular restaurants.