Restaurants think they have a secret weapon in battle with Amazon, delivery startups
TORONTO Restaurateurs face pressure from an ever-widening set of competitors including meal-kit companies and online food delivery startups, but a group of industry leaders remain convinced that ambience will beat Amazon.
“Amazon is an indication of how much broader the competitive set is now,” Jordan Holm, president of the casual dining chain Boston Pizza, told an audience this week at the annual foodservice and hospitality convention RC Show in Toronto.
“Ten or 15 years ago, we might have looked at just casual dining, luxury casual and quick-service restaurants (as rivals). But that has expanded to include retail and the amount of retail space the grocery chains are dedicating to takeaway meals and prepared foods that offer convenience value and quality.”
Holm, however, believes consumers’ increasingly smartphone-enabled lifestyles are helping to send them back to restaurants again. “More and more people are cutting cable right now and they want to come and watch games live. Social occasions can’t be replaced by drones or robots.”
While the trend might not be as obvious at a restaurant located in the downtown core of a major city, its role as a local meeting place is particularly relevant in areas such as Neepawa, Man., a town of 5,000 where the 391-outlet business operates a restaurant. That particular Boston Pizza “hosts all the tournament traffic for the sports teams, they hold the Chamber of Commerce meetings and act as a vital community hub,” Holm said.
Full-service dining restaurants received a sales boost in the last year from so-called online delivery aggregators such as Just Eats, Skip the Dishes and Uber Eats. Holm said such third-party intermediaries can pose some challenges because the originating restaurant is not in full control of the end consumers’ dining experience. And David Aisenstat, chief executive of The Keg, said the best experience for customers remains inside the restaurant.
“Steaks don’t travel well — you can’t cook a steak and have it turn up at my house 25 minutes later,” he said. “And Amazon can deliver all the food they like, and that’s not going to substitute having a great night out at The Keg, eating and drinking with people and enjoying the ambience. They cannot duplicate that. If I was a grocery store, I would be a little more worried.”
Susan Senecal, chief executive of burger chain A&W Canada, said aggregators are one aspect of how businesses are changing and adapting to technology, part of the shift that includes apps and self-ordering kiosks inside restaurants.
“It all relates back to convenience,” she said. “Consumers decide how they are going to interact with retail. At different times, every guest may have a different need. We are very excited to see how this unfolds.”
While the restaurant business has been increasingly competitive due to the rise of newer food players and technologies, restaurant sales have been outpacing retail food sales at grocery stores.
Sales at supermarkets and grocery stores grew 1.3 per cent for the year ending Dec. 2017, according to Statistics Canada; estimated total foodservice sales were up 4.1 per cent in 2017, according to Restaurants Canada data.
The casual-dining sector has been particularly hard hit, only last year returning to the level of sales that it had prior to the recession a decade ago.
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