Amid tough times in the fast food industry, A&W is pursuing an aggressive growth strategy in Ontario and Quebec and pushing healthier menu ingredients in hopes of making inroads into urban markets, the company says.
“It’s a nice thing to know we have room to grow,” said Susan Senecal, A&W Food Services of Canada Inc.’s chief marketing officer, at a food-tasting event in Toronto Tuesday.
Vancouver-based A&W is a separate entity from the U.S. chain, and is the second largest burger chain in Canada after McDonald’s, though it has more of a presence in smaller towns and in western Canada, she noted.
Though fast food chains are struggling with flat revenue growth versus boutique burger, burrito and sandwich restaurants, A&W reported that same-store sales rose 5.7 per cent in the third quarter over last year. It’s also accelerating its growth plan by opening another 30 restaurants in Canada this year, most of which will be located in Ontario and Quebec.
A&W also announced this week it will only serve chickens that are antibiotic-free and have been fed only a vegetarian diet with no animal byproducts. This follows a recent move across the Canadian chain to serve beef raised without the use of hormones or steroids.
“We’re really focused on burgers and we want to continue in that direction,” Senecal said.
Meanwhile, competitor McDonald’s continues to struggle, with chief executive officer Don Thompson saying Tuesday the company hasn’t kept up with the times and that changes are in store for its U.S. restaurants. The burger giant’s profit sank 30 per cent in the third quarter, with sales at established locations down 3.3 per cent globally and in its flagship U.S. market.
In the division encompassing Asia, where a major McDonald's supplier was shown on TV repackaging expired beef, the figure sank 9.9 per cent.
In the U.S., perceptions around the freshness and quality of its ingredients have been a problem for McDonald’s. The chain has been fighting to boost sales as people gravitate toward foods they feel are more wholesome. On Monday, “fast-casual” Mexican food chain Chipotle said its third-quarter sales at established locations surged 19.8 per cent.
McDonald’s, meanwhile, launched a social media campaign last week inviting customers to ask questions about its food. It began with frank questions such as, “Why doesn’t your food rot?” and “Is the McRib made from real pork?” showing just how bad some perceptions of McDonald’s food can be.
Starting in January, Thompson said McDonald’s will “simplify” its massive menu to make room for restaurants to offer options that are best-suited for their regions.
A&W, known since the 1950s for its mama and papa burgers and frosty mugs of root beer, has opened 13 restaurants in Ontario so far this year, including two in Toronto at RBC Waterpark Place on Harbour Square and at Pape and Danforth, and three in Ottawa.
Another five are under construction in Ontario, including restaurants in Bolton and Vaughan, while six are set to open Quebec, with three in Montreal. New “urban concept” locations have an updated design in the signature orange and black colour scheme touting the new menu ingredient “guarantee,” and some self-order kiosks.
- With files from The Associated Press