A restaurant chain is planning an ambitious expansion into the Calgary and provincial markets as growth in the quick service industry increases during the economic slowdown.
Mucho Burrito, which opens its second location in Calgary on Thursday, plans to have 20 restaurants up and running in the city and surrounding region in the next five years, said Steve Travers, president for Western Canada at Extreme Brandz and the area developer for the Mucho Burrito brand in Alberta.
Travers said the company is also expecting to have 50 locations in Alberta during that same time period.
“We feel that Mexican is being somewhat under-represented in the (quick service restaurant) portion of business,” he said.
“Some people might categorize us as recession-proof. To a certain degree, I guess we are. In recessionary times, people tend to eat at restaurants that don’t have that$20 to $25 price tag. So there’s more people coming into our segment of the market than is actually leaving because they can afford to eat that.”
The company’s second location opens Thursday at 4307 130th Ave. S. E. at the South Trail Crossing power centre. Its first store opened in December in the Beacon Hill centre in northwest Calgary. Two other locations are under construction and will open within the next 30 days in Shawnessy and Quarry Park.
Travers said the typical size of the restaurant is 1,800 to 2,500 square feet. The brand is described as “fast casual” with a dining-in area.
According to research by the NPD group on the Canadian Restaurant and Foodservices Association website, between May 2008 and May 2009, sales in the quick service restaurant sector increased by five per cent while the total market was up by four per cent. Also, the casual segment of the market was up by six per cent.
The quick service segment makes up 60 per cent of the overall market, while the casual sector makes up 14 per cent.
The association is forecasting total food service sales in Canada to decline by 1.2 per cent this year to almost $59 billion. The “limited-service” restaurant sector is forecast to be flat at just over $19.6 billion.
Since launching the brand in June 2006, Mucho Burrito has opened 16 restaurants across Canada and is targeting Alberta as part of a national growth plan of more than 200 locations in the next five years.
“We’re very, very bullish on the Alberta market, certainly the Calgary market,” said Alex Rechichi, one of the founders of the Mississauga-Ont.-based company. “It’s been a successful market for us in the past. We’ve done business in Calgary with some of our other brands for quite a while. And we’ve always pulled above average sales numbers from the entire market, certainly out of Calgary, as well. Alberta and Calgary will continue to be part of our core of our overall development strategy.”
The company has had success during good economic times and during tough economic times, he said.
People who have received severance packages often seek their own business opportunities, he said. Also, Rechichi said the tougher economic times open the real estate market with more opportunities to find space and to negotiate deals with landlords. But he also said finding financing can be a problem for some candidates.
mtoneguzzi@theherald.canwest.com