Fast-Casual Restaurant Segment Growing

CHICAGOAccording 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.

The still-emerging segment of fast-casual restaurants seeks to offer a higher-quality dining experience yet the convenience of fast-food restaurants. Average ticket prices range from $6 to $12 per ticket, placing diner expense somewhere between fast food and casual dining. Other hallmarks of fast-casual include modified table service, sometimes more emphasis on healthful foods and occasional 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, says Eric Giandelone, director of foodservice research, 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.

The fast-casual segment still markedly lags behind the fast-food segment, as well as casual dining, pizza and family-dining restaurants. However, it has taken a considerable share of the lunch daypart, with patronage levels almost equaling casual diningMintel reports that 26% of respondents to a recent survey have visited a fast-casual restaurant in the past month, while 28% have visited a casual dining restaurant. However, fast food is still maintaining a strong lead, with nearly 60% of respondents frequenting fast food for lunch within the past month.

Giandelone suggests the main reason fast-casual restaurants are trailing fast food to such a degree is a basic equation of availability to consumers. There simply arent as many fast-casual restaurants as fast-food units. For instance, one of the most-successful fast-casual chains, Panera Bread, had 1,388 locations as of March 2010, meanwhile fast-food leader, McDonalds had 10 times that number of restaurants in the United States.

Nearly 30% of those surveyed in the Mintel survey 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 fast-casual restaurants are too expensive, and 22% prefer typical table service when they dine out.