Fast-casual and fast-food restaurants must evolve to compete, suggests Technomic study

June 18, 2014, Chicago – With increasing
competition, limited-service restaurant concepts that cater to a variety of needs
and occasions will likely be the most successful, suggests a Technomic study.

June 18, 2014, Chicago – With increasing
competition, limited-service restaurant concepts that cater to a variety of needs
and occasions will likely be the most successful, suggests a Technomic study.

Even though the restaurant industry sees distinctions between fast-food
and fast-casual concepts – two different types of limited-service
restaurants – those lines are starting to blur for consumers, who note
fewer distinctions between the two segments in areas like overall value,
friendly service, craveability and menu variety. 

Consumers report that convenient delivery or ordering services, such
as call-ahead or online ordering, could encourage them to patronize
limited-service restaurants more often. Beyond convenience, 53 per cent
of fast-casual consumers expect an upscale, relaxing atmosphere, and 17
per cent (up from 12 per cent in 2012) will go elsewhere if this is not
offered.

"Limited-service restaurants will need to compete for visitation by
focusing on their convenience platforms, amenities and ambiance in
addition to the quality of their ingredients," said Darren Tristano, executive vice-president of Technomic, in a news release. "Fast-food concepts in
particular can differentiate themselves and better compete with
fast-casual concepts by adding loyalty programs, free Wi-Fi, or
enhancing their ambiance."

To help foodservice executives understand the latest behaviours,
preferences and attitudes of consumers regarding the limited-service
restaurant industry, Technomic has published an update of its Future of LSR: Fast-Food & Fast-Casual Restaurant Consumer Trend Report. Interesting findings include:

• Sixty-four per cent of consumers report visiting fast-food
  restaurants at least weekly, and 40 per cent patronize fast casuals as
  often.




• Patronage is significantly more frequent at fast-food than at
  fast-casual concepts; twice as many consumers visit fast-food (39
  per cent) as fast-casual (19 per cent) restaurants more often than once a
  week.




• Delivery occasions have increased slightly at LSRs. Further, more
  than a quarter expect fast-food (30 per cent) and fast-casual (28
  per cent) delivery, while similar proportions say this service could
  encourage patronage.




• Half of fast-casual customers (53 per cent) say that healthy options
  are important, and 63 per cent even expect them. Fast-casual users are
  slightly more willing than fast-food users to pay more for
  better-for-you items.