Happy Belly Food Group is planning a significant expansion across Canada this year, with the restaurant company aiming to open between 30 and 50 new locations as it builds on strong same-store sales and targets growth markets including Alberta, Quebec, British Columbia and Atlantic Canada.
Chief executive Sean Black said the company currently operates 84 locations across 10 brands and is seeing positive momentum despite rising costs that have challenged parts of the restaurant industry in recent years.
“Across the board we’re experiencing very positive same-store sales,” Black said in an interview. “So we’re adding new units and we’ve improved sales.”
The expansion will be concentrated within four of the company’s core brands, which Black said are expected to generate the majority of the group’s near-term growth.
Four brands driving expansion
Black said the company’s “core four” growth brands are Yolks, Rosie’s, Heal and iQ Food. New restaurant openings planned for this year will largely come from those concepts.
“This year, somewhere between 30 and 50 new restaurants,” he said. “Just across our portfolio, 30 to 50 restaurants is our anticipated opening this year.”
The strategy reflects a broader effort by the company to concentrate investment and development resources on brands that are gaining traction with customers.
Happy Belly’s portfolio spans 10 brands in total, but Black said the company is focusing its growth where it sees the strongest demand and operational potential.
Demographics shaping strategy
Black said consumer demographics are a key factor behind the company’s performance and growth strategy. The company targets a younger customer base, which he said has remained relatively resilient in its spending habits.
“Part of it is demographics,” he said. “We’re focused on a younger demographic. They’re still spending money. Not much has happened recently that’s impacted them.”
Location strategy is also playing a central role in the company’s expansion plans. Black pointed to several regions where population growth and economic activity are supporting demand for new restaurants.
Alberta is a major focus for the company, while markets in Atlantic Canada have also become increasingly attractive.
“Alberta is a big growth market for us,” Black said. “Atlantic Canada has had a huge boom in population growth and opportunity. Whether it’s Halifax or PEI, those markets are doing very well.” British Columbia is also a growth market for the company.
He said the company believes its brands and real estate strategy are aligned with the customer segments it is targeting.
“We’re well positioned with our brands and our real estate based on the customers that we go after,” he said.
Real estate central to growth
As the company expands, Black said securing appropriate locations has become one of the most important aspects of the business. He estimates that real estate work occupies roughly 80 per cent of his time as chief executive.
“If you want to be in retail today, you’ve got to be in real estate,” he said. “If you want to grow, you have to be very active and engaged in the real estate sector.”
While finding available locations is not necessarily the biggest hurdle, Black said affordability has become a key challenge as operating costs rise.
“Finding space is not all that hard,” he said. “Being able to afford it is harder.”
When evaluating potential sites, the company considers several factors including traffic patterns, population density and the broader competitive landscape.
“A big factor is the demographics and trade area,” Black said. “Car count, population density, and the competitive set, to see where your competitors are.”
Understanding the competitive environment is critical in today’s restaurant market, he said.
“Competition is real today. Everyone out there is fighting for share of stomach or share of wallet,” Black said. “It doesn’t matter what you’re selling, whether you’re selling pasta, pizza, steaks, burgers. It doesn’t matter. You’ve got to know what you’re up against.”
Industry changes influencing growth
Black said broader changes affecting the restaurant sector are also shaping how companies approach expansion. One factor he pointed to is shifting immigration patterns, which he said have had an impact on franchising activity for some restaurant brands.
“A lot of brands were very dependent on immigration for franchising,” he said, adding that changes in that environment have created challenges for some operators.
Happy Belly’s operating model differs in part because it runs many corporate locations rather than relying solely on franchisees.
“We operate a lot of corporate stores, so we don’t need franchisees to sign a location to open a corporate,” Black said.
That structure provides the company with flexibility as it evaluates new markets and growth opportunities.
Positioning for future expansion
Looking ahead, Black said the company expects continued growth in several regions where it believes demographic trends and economic conditions remain favourable.
Quebec, Alberta, British Columbia and Atlantic Canada will remain the primary focus for new development.
“A lot of our growth is from Quebec, Alberta, BC and Atlantic Canada,” he said. “Those are the markets that we’re most focused on.”
Despite ongoing cost pressures affecting the industry, Black said the company’s performance has remained positive.
The combination of rising sales, targeted brand investment and a strong focus on site selection will continue to guide the company’s strategy as it expands its footprint.
For Black, the competitive landscape means operators must remain highly disciplined about both real estate decisions and understanding their customers.
“Everyone out there is fighting for share of stomach or share of wallet,” he said. “You’ve got to be very aware of where your competition is.”
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