When The Cheesecake Factory announced last spring that it was launching its first Canadian location at Yorkdale Shopping Centre, customers immediately wanted to know if they could make reservations – months in advance of the opening. The news went viral as Torontonians rejoiced that they would no longer have to drive south to experience the prominent U.S. restaurant chain’s 250-plus item menu. A number of American restaurants have entered the Canadian market in recent years, but none have been as highly anticipated as the arrival of The Cheesecake Factory, which has inspired a cult following from professional athletes to suburban moms. Even Drake is an unabashed fan.

For Yorkdale, the country’s busiest mall with 18 million visitors a year, the opening of The Cheesecake Factory this week is a major win. The chain, which has 210 locations in the United States and another 18 internationally, targets premium shopping centers, where it sends waiting diners off to shop with mobile buzzers that signal when their tables are ready. Yorkdale has had several Canadian “firsts” this year, including the launch of outlets for Britain’s Dyson appliance company and the British clothing brand Hunter, but the excitement over the new restaurant in unprecedented, said Claire Santamaria, the mall’s director. “With every opening we kept getting asked, ‘But when is The Cheesecake Factory opening?'” But even with all the buzz, the restaurant’s success is far from guaranteed. Numerous foreign chains, both food and retail, have tried to enter the Canadian market. Some, such as Five Guys, have succeeded, while others, such as P.F. Chang’s and, most notably, Target, have failed. Well-established domestic restaurant chains are already struggling, challenged by a rise in food-delivery services and trendier, smaller and more diverse restaurants. While Canadians are eating out as much as ever, their tastes are changing. Fast-food sales saw a jump last year to $26-billion and 4.5 billion visits, according to data from the NPD Group research firm. But sit-down casual restaurants saw a slight 2 per cent dip to $22-billion, and a 4 per cent drop in traffic to 1.3 billion visits. The Cheesecake Factory, like other leading U.S. chains such as Chili’s and BJ’s, has been battling a similar trend south of the border. After several years of growth, the California-based company saw its sales drop 2.3 per cent in the third quarter of fiscal 2017. Its stock tumbled 32 per cent since its high point in May. CEO David Overton blamed the drop in sales on poor weather, saying it hurt the restaurants’ patio traffic. But analysts pointed to broader trends, with a Bloomberg article declaring “Cheesecake Factory Inc.’s status as a bright spot in the gloomy casual-dining industry is beginning to fade.” “We like to open and see how it does before getting too ahead of ourselves,” Ms. Rowe said. “It’s sort of a slow, methodical approach. … We take the same approach with all of our openings in new countries.”

The Cheesecake Factory has licensed restaurants in Mexico, China and the United Arab Emirates, but its location in Toronto is the first corporate-owned store outside the United States. Opening a corporate store represents a concerted effort to establish a Canadian presence, according to Robert Carter, a retail and food analyst with NPD Group. “When you’ve got a corporate store, then you can have tighter controls and deeper pockets to run that store,” Mr. Carter said. “The risk is that they bring that U.S. corporate mentality to the Canadian market and might not understand the differences between the two markets.” Mr. Carter is cautious when it comes to the hype around the new opening. “They’re coming into the market where they’ve got a relative brand strength, so they may get trial,” said Mr. Carter, but he says customers giving it a try isn’t necessarily good enough when the casual dining market is as competitive as it is in Canada. – Source: The Globe and Mail (Toronto).