While the economic recession made for a tough year for operators in 2008, the quick-service restaurant industry did gain market share as consumers sought value. QSRWeb expects much of the same in 2009.
In the coming year, value, quality and better for you will continue to grow as will marketing in the social networking arena. Here are QSRWeb's trends to watch:
1. QSR gains as casual and upscale dining falter. For 12 consecutive years, the NRA has reported growth for the casual and upscale dining segments, but 2008 saw the association turn expectations downward. For 2009, the outlook isn't much better.
According to the NRA's 2009 forecast, fullservice restaurants are expected to see a 1.0 percent sales growth change between 2008 and 2009. Meanwhile, limited-service restaurants have been forecast to experience a 4 percent sales growth change between the same period.
Fitch Ratings reported last month that it expects the negative effects of a declining U.S. economy, growing pressure on consumer discretionary spending and higher than normal food costs to be further magnified in the restaurant industry during 2009. The QSR segment is likely to continue to benefit because of its value perception, lower priced menu items, and continued consumer trade-down from fullservice dining establishments.
Mark Barnekow, with supply chain management provider iTradeNetwork, said limited service overall will gain as consumers migrate to lower price point, higher quality products.
2. Value drives sales. More than a third of QSR operators reported in the NRA's 2009 industry forecast that they see an expanded focus on value as the top trend for the year ahead.
McDonald's, for example, decided to hold off the national rollout of its premium burger while replacing the dollar menu favorite double-cheeseburger with the McDouble, which has only one slice of cheese on its two patties.
Other chains are exploring value menus. For instance, Popeyes Louisiana Kitchen is testing a value menu, and Sonic just released a dollar menu. But QSRs aren't the only segments adding value positioning. QSR operators should be aware that casual dining units also are creating value meal offerings, Barnekow said.
Expect more limited-time-only value offerings to pop up on QSR menus as operators try to balance attracting customers with maintaining profit margins.
3. Social networking grows as marketing tool. Top brands in the QSR industry have learned the important role social networking sites like Facebook and MySpace have begun to play in the restaurant industry. Dunkin' Donuts and Burger King also are delving into social media spaces like Twitter and YouTube, where both brands have their own channel.
Marketing via social networking costs less than traditional advertising but requires tech-savvy staff to spark engagement with a younger crowd. Online marketing efforts will grow in 2009 as QSRs strive to keep the attention of the 18-34-year-old demographic, particularly young males.
4. QSR continues to learn from fast casual. The fast casual service model will continue to gain attention in 2009 as consumer dining choices trend down into limited service.
QSRs have been aware of the success of fast casual for years as a number of brands, from McDonald's to Captain D's, have redesigned their interiors to include a more upscale look. They also have added premium menu items in an effort to compete. Subway, for example, plans to add five more of its fast casual model, Subway Café, as well as test Starbuck's brand Seattle's Best Coffee, in the coming year.
| ||||||||||||||||||
QSRs will continue to focus on quality while promoting value in 2009 in order to compete with the growing fast casual segment.
5. Healthy gains more ground. Healthy has been a hot topic for some time now, and it's not going away. Several recent studies continue to link fast food with obesity, and communities are taking notice, from banning trans fat in restaurants to requiring calorie counts on menu boards.
QSRs have responded by removing trans fats from their menu and adding better for you options. But the biggest trend in healthy for 2009 will be on the kids' menu. The NRA's recent "What's Hot" survey of America's top chefs identified nutritionally balanced kids' meals and side dishes among the top 20 trends for the coming year.
Many of those menu items will show up in casual and fine dining, but QSR is taking notice too. A separate NRA study identified healthy menu options for kids as the No. 1 trend in QSR.
