Changing Foodservice Landscape
Ten years ago, LSRs made up 47% of the total commercial foodservice industry, while full-service restaurants (FSRs) made up 53%. Now, the landscape has reversed; LSRs account for 53% and FSRs 47%. Within the LSR segment, fast-casual restaurants continue to gain market share while fast-food restaurants are working overtime to upscale their menu and concept positioning -- not only to keep pace, but to compete directly with fast-casual leaders.
"The key to LSR growth is differentiation," says Technomic executive vice president Darren Tristano. "Many LSRs that have demonstrated growth have a broad consumer appeal, yet each has a discerned approach. Consumers are looking for fresh, better quality ingredients, a contemporary decor and ambiance, and interactive service formats to offer something unique and enhance the customer experience."
Fast-food patronage thrives on its convenience and value, while food distinction and ambiance are key factors driving patronage at fast-casual locations. Look for a blurring of the lines between fast-food and fast-casual restaurants, with operators in each subsegment tweaking their concepts with new unit designs and convenient service formats in order to remain competitive.
Technomic's recent "The Future of LSR: Fast-Foods & Fast-Casual Restaurants Consumer Trend Report" finds:
Consumer disparity -- 72% of consumers visit fast-food restaurants once a week or more, while only half (49%) visit fast-casual restaurants, partly because there are fewer locations, but also because they are more attractive to higher income consumers.
Lunch patronage -- Consumers visit fast-food and fast-casual restaurants for lunch more often than for any other daypart; 21% purchase fast-food lunches at least twice a week, and 19% visit fast-casual restaurants, largely due to time pressures.
Menu incidence -- Breakfast sandwiches have grown by 35% at fast-food restaurants and by 29% at fast-casual chains, showing the strength of breakfast entrees at LSRs.
Health and wellness -- Gluten free options and the growing importance of better-for-you kids' meals continue to guide better-for-you LSR menu development.
Global inspiration -- Street food influences continue. Rustic, handheld street foods with a global spin have helped LSR menu developers create unique and craveable offerings. Consumers are looking for new flavor supplements for their sophisticated palettes.