Franchised food outlets are feeling the heat as a tough economy and changing consumer trends see them fighting for survival. The reasons, says Broll divisional director Frank Reardon, include the additional costs associated with franchising, high operating costs, poorly differentiated offerings and a possible oversaturation of the market.
Restaurants are closing their doors and there has been a slowdown in the numbers of new outlets opening. Furthermore, the rise of the craft food and beverage movement has seen a move away from chains. “Like the rest of the economy and the retail market, food is under pressure.”
Restaurant types that do, however, seem to be surviving the challenges are Middle Eastern food and shawarma outlets which, Reardon says, are seeing a “huge surge” in popularity.
Food services specialising in curries and bunny chows are also bringing in customers. He says franchises are placing a bigger emphasis on “drivethrus” and conveniences. Technology appears to be a helpline for the food industry as, globally, trends indicate that food service consumption is expected to increase by 13% over the next five years, producing $359billion in incremental value.
Technology and the mobile revolution have helped grow foodservice industry revenue. Picture: Supplied
This is according to JLL’s 2019 Food Service Trend Report, which says the increase is driven in part by technology and the mobile revolution. By digitising the experience, consumers can get meals “wherever and whenever they like”.
“With delivery the fastest growing dining occasion across the globe, dine-in experiences (eating in a restaurant) are now treated as separate food service occasions.
“Almost 73% of food service spend across the previous year was attributed to dine-in occasions. While consumers are still eating out, their reasons and motivations for doing so have changed. Consumers are now creating time to enjoy unique restaurant experiences, rather than just ‘eating out’ at a favourite.”
The report identified the “mega trends” in the food service industry last year:
Experience economy:
The aspiration of experience over ownership, such as “dinertainment” (food and leisure partnerships) and “snobmoddities” (enhanced foodie products and services).
Conveni-tech:
The demand for convenient and superior services, for example “food on demand” (food anywhere and everywhere) and “irobot” (automation in food service).
Youniverse:
The desire to be seen and served as unique, including “Foodstagram” (social media food stars) and “pick ‘n’ mix” (curated food stalls and market halls).
Better business:
Where purpose and profit come together, such as “carbon footprint” (waste not, want not) and “food for good” (where society matters).
Supply unchained:
Collapsing barriers between consumers and productions, including “sourcetenance”, or producerled food concepts, and “clean green”, for sustainable and healthy eating. The trends are found in visitor attractions, workplace food, retailers, food service operators, shopping centres, transportation, stadiums and hotels.