Fast casual boom faces a standstill

August 2, 2017
3 min read

Fast casuals have long been viewed as the sweet spot for current consumer dining habits, with 93% of US consumers saying they have visited a fast casual restaurant, according to Mintel’s report on fast casual restaurants. They hit on a variety of trends from international cuisine to customization, while still offering the convenience that diners crave. However, with a variety of sources reporting that fast casual sales are slowing down, this segment of dining is facing a crucial turning point to remain a competitive segment.

Too much, too soon?

The fast casual segment disrupted dining out patterns when early leaders, such as Chipotle and Panera Bread, redefined what it meant to have quality food in an affordable and convenient setting. The success of this segment has led to overwhelming competition from established chains and emerging independents all attempting to put their own spin on the fast casual landscape.

With the variety of options, fast casual chains can’t rely on loyal customers like they once did.
However, the fast-paced expansion of legacy chains and increased competition from independents has led to an overwhelming amount of options for diners. With consumers having a variety of options, fast casual chains can’t rely on loyal customers like they once did. According to an article from Nation’s Restaurant News in May 2017, publicly traded fast casual chains averaged a same-store sales decline of 1.6 percent. In addition, Bloomberg’s Fast Casual Restaurant Index noted fast casual restaurant stocks fell 14% last year.

This is not to say that the fast casual landscape is completely losing its edge, but rather that the increased competition, from both a foodservice and retail perspective, is impacting every segment. Chains like Panera Bread that are consistently innovating with new menu concepts and adapting to delivery and mobile orders are noting the benefits. In April 2017, Panera Bread reported that same sale stores were up 2.6% in the most recent quarter.

What we think

The fast casual segment is certainly not doomed; this shift in sales simply demonstrates that fast casuals are not immune to evolving dining preferences. With retail bringing a stronger focus to freshly prepared meal items and consumers having an overwhelming amount of dining out options to choose from compared to ten years ago, the fast casual segment has to move beyond their core selling points and continue to be innovators in the dining out space. QSRs are also leaning on more premium food items to compete with the fast casual space.

Sweetgreen, the fast casual salad chain, announced that it would be fully cashless in 2017, meaning people can only pay via the Sweetgreen app or credit/debit card. As part of its Spring 2017 menu, the chain also created regional focused salad offerings for key locations. For example, a salad exclusive to Philadelphia called the Zahav Bowl features shredded kale, hot chickpeas, turmeric roasted cauliflower, roasted chicken, organic carrots, toasted almonds, dill + mint, Sweetgreen hot sauce and a lemon-dill tahini dressing. Innovation from both a menu and operation standpoint is essential in order for fast casuals to stay relevant.

Diana Kelter is a Foodservice Analyst at Mintel. Diana authors reports focusing on changing consumer attitudes, industry news, and flavor / ingredient trends within foodservice. Diana also specializes in leveraging menu data from Mintel Menu Insights database.

Diana Kelter
Diana Kelter

Diana is an Associate Director of Consumer Trends, focusing on North America. Diana joined Mintel as a foodservice analyst before moving to the Trends team. Her role on Trends is a combination of analyzing data and pairing it with global brand monitoring, to determine where macro trends take shape.

More from Mintel
  • Mintel Store
    Mintel Store
    Get smart fast with our exclusive market research reports, delivering the latest data, innovation, trends and strategic recommendations....
    View reports
  • Mintel Leap
    Mintel Leap is a revolutionary new AI-powered platform that will transform your research process....
    Book a demo
Subscribe to Mintel Spotlight
Related articles
May 21, 2024
Innovations in texture were a break-out trend from the Sweets & Snacks Expo 2024 hosted May 14-16 in Indianapolis, Indiana. From freeze-dried candy to melty baked goods, texture was a…
May 13, 2024
Who wants ice cream? Well, if we look at global ice cream consumption, the answer is: almost everyone! According to Mintel’s consumer research, nine in ten UK consumers enjoyed an…
May 10, 2024
As Indian consumers become increasingly health-conscious, the salty snacks market is undergoing a significant transformation. The traditional reliance on palm oil as a key ingredient in snacks is being questioned.

Download the Latest Market Intelligence