Leading Fast Casual Restaurant Chains Prospered During Downturn
CHICAGO -- Visits to the leading fast casual restaurant chains grew 17 percent over the last three years while the rest of the industry experienced its steepest traffic declines in decades, according to foodservice market research by The NPD Group. Consumer demand for fast casual offerings exceeded the unit growth of leading fast casual chains. As defined by NPD, fast casual restaurants are upscale quick-service restaurant concepts that offer more service and higher quality food, and have a larger average check size than other fast food restaurants.
Visits to the leading fast casual restaurant chains, like Chipotle, Five Guys Burgers and Panera, were up 6 percent for year ending December 2010 versus a year ago. This compares to a 1 percent decline in total industry visits for the same time period. Over the last three years fast casual traffic has grown by 17 percent.
"Fast casual restaurants have done an excellent job of satisfying their customers' needs for quality and service and have built strong customer loyalty as a result,” said Bonnie Riggs, restaurant industry analyst at NPD. "The attributes that define the fast casual concept -- fresh, food quality, and service -- are the reasons why customers give them their highest satisfaction ratings."
Responding to growing consumer demand, the major fast casual chains grew units by a double-digit rate over the last three years. Even with this unit growth, demand outpaced the rate of unit development, reflecting consumer satisfaction with the fast casual experience. Since 2007, fast casual unit availability expanded 12 percent.
Demand at fast casual restaurants will grow significantly over the next decade, according to NPD's "A Look into the Future of Foodservice." Incremental traffic for fast casual will source to teens and young adults, particularly those 10 to 30 years of age, and to a lesser extent, those 55 years and older.
"Fast casual concepts are in an excellent position for growth," Riggs said. "We've seen other fast food customers trading up to fast casual and full service customers trading down to fast casual. In addition, with imitation being the highest form of flattery, we're now seeing other segments of the industry duplicate what has made fast casual concepts so successful."