What's the state of the fast casual industry?
The fast casual industry has enjoyed explosive growth over the past several years, but it appears that the novelty of offering high-quality food in a quick setting at a fair price is waning. The industry was worth $47 billion in 2016, and although it should close 2017, with a 10 percent increase, hitting $52 billion, that's a drop in growth from past years, according to Technnomic. Fast casuals, for example, increased their collective annual sales by 12.8 percent in 2014, and by 11 percent in 2013.
The good news, however, is that the industry is still leading the restaurant sector when it comes to growth. NPD Group reported earlier this year that although traffic growth will stall in the year ahead for restaurateurs nationwide — with full-service faring the worst — limited-service chains (which combine QSRs and fast casuals) show an estimated 1 percent rate of growth in overall traffic. That's slightly better than the flat growth for that total business sector in 2016, and far better than the anticipated loss of 2 percent of business for full-service restaurants in 2017.
"Restaurant operators are in a position to alter the current forecast, but will need to differentiate themselves from the competition," NPD Group's restaurant industry analyst, Bonnie Riggs, said in a news release. "In the year ahead, it will be critical for them to stay relevant in consumers' minds, focusing on innovative products, unique promotions, competitive pricing, stating the benefits of eating at restaurants vs. home, and delivering an enjoyable experience."
When it comes to staying relevant, fast casual brands aren't afraid of innovation and customization, according to FastCasual's latest findings in the 2017 State of the Industry report. It polled more than 250 operators on business practices and found that most not only offer a variety of foods to fit specific dietary needs but are also constantly testing or implementing consumer-facing technology to help improve the customer experience. More than 81 percent said they offer healthy menu items, 65 percent have gluten-free options, 75 percent have vegetarian items and 40 percent have vegan offerings, for example. Nearly half participate in local sourcing, a trend that more consumers are demanding.
When it comes to technology, nearly half said they already offer online ordering and use digital signage, while 38 percent have implemented mobile ordering and 36 percent have mobile loyalty programs in place.
This is just a small portion of data uncovered in this year's survey. Click here to read the full report.
Topics: Trends / Statistics