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Is QSR-plus the answer for struggling QSRs?

Technomic Executive Vice President Darren Tristano believes the key for struggling QSR brands is to create a space in the QSR-plus niche, rather than imitate fast casuals.

July 9, 2015

It's true that fast casuals are growing faster than QSRs, Technomic Inc. Executive Vice President Darren Tristano, wrote in an article for Forbes. The story is more complicated, however, as QSRs are also losing market shares to QSR-plus, a term coined by Technomic to describe the segment in between fast food and fast casual.

Tristano described QSR-plus as those restaurants with smaller menus and core ingredients typically of better quality than traditional QSR offerings. Although prices are slightly higher than QSRs, they remain lower than fast casual restaurants on average.

Technomic lists brands such as Chick-fil-A, Culver's, El Pollo Loco, In-N-Out Burger, Pita Pit and others as falling under the QSR-plus category, Tristano reported. Technomic's Top 500 Chain Restaurant Report found that these brands increased system sales in 2014 by a collective 9.2 percent.

"The segment is as much 'affordable fast casual' as it is 'elevated fast food," Tristano said in his article.

The distinction is an important one, he said, because it could be the strategy that turns sales around for classic QSRs currently struggling, such as McDonald's, Subway and KFC. Tristano believes the key for these brands is to create a space in this niche, rather than imitate fast casuals. Out of McDonald's many comeback strategies (all-day breakfast, Create Your Taste and more), Tristano puts the most faith in the company's move to reinvent the Quarter Pounder with a bigger patty.

According to Tristano, elevating core products is a classic strategy that has worked time and again for restaurants such as Domino's with its reformulated pizzas and Wendy's sea salt fries. QSRs lost themselves along the way with too many expansions, Tristano said. QSR-plus brands like Chick-fil-A and Potbelly are executing simpler menus at attractive price points with better quality food instead of imitating their competitors. It may be less "buzz-worthy," he stated, but it's better than alienating core customers with a menu that doesn't resonate.