Fast Casual: Niche Restaurant Segment?

Fast casual establishes itself as niche restaurant category, according to Mintel.

August 27, 2010

CHICAGO - For customers who don??t want fast food or an expensive full service meal, a fast casual restaurant might be the ticket.

According to a recent Mintel foodservice report, the fast casual restaurant category accounted for estimated sales of $23 billion in 2010, up nearly 30% since 2006. Restaurants in this market claim to combine the quality of family casual with the convenience of fast food. At $6-$12 per ticket, pricing falls between fast food and casual dining. Fast casual restaurants distinguish themselves from fast food through their modified table service, higher food quality, greater attention to healthful foods and, in some cases, availability of beer and wine.

"The relatively new fast casual category has fared well through the recession as people can see the added value in the food and atmosphere, despite the slightly higher price point," comments Eric Giandelone, director of foodservice research at Mintel. "The majority of restaurant-goers say quality is the most important determinant in their choice of a restaurant, which will continue to help this category grow."

Fast casual restaurants have not yet displaced fast food, casual dining, pizza or family dining restaurants, but this fairly young category makes its strongest statement during the lunch hour, with patronage levels almost equaling that of casual dining (26% of respondents have visited a fast casual restaurant in the past month and 28% a casual dining restaurant.) However, fast food still holds a strong lead with nearly 60% of Mintel respondents frequenting a fast food establishment for lunch within the past month.

According to Eric Giandelone, the main reason fast casual restaurants lag so far behind fast food is simply that there aren??t as many of them. One of the most successful fast casual chains, Panera Bread, had 1,388 locations as of March 2010, meanwhile fast food leader, McDonald??s had 10 times that number of restaurants in the United States.

Nearly 30% of those surveyed cite the reason for not frequenting a fast casual restaurant in the past month as "there are no/not many fast casual restaurants by me." Just over a quarter of respondents (26%) claim they are too expensive and 22% prefer a regular wait staff when they dine out.

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