Fast-Casual Remains Poised for Growth

While most segments of the restaurant industry continue to face challenges caused by the recession and slow pace of the ensuing recovery, fast-casual chains seem perfectly positioned for the prevailing economic and social climate, according to new research from Technomic, a Chicago-based foodservice market research firm.

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The fast-casual segment continued to outpace the restaurant industry as a whole in 2010, with the Top 100 fast-casual chains growing 6 percent to nearly $18.9 billion, a faster rate than in 2009, according to Technomic's 2011 Top 100 Fast-Casual Chain Restaurant Report. Total fast-casual units grew 3.9 percent to 15,827, which is slightly slower than the prior year, but still faster than any other dining segment.

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Other findings from Technomic's Top 100 Fast-Casual Chain Restaurant Report include:

  • The Mexican menu category overtook bakery café/bagel restaurants as the most prevalent type of fast-casual restaurant in the Top 100 last year. Bakery cafés did, however, continue to lead all menu categories in terms of total U.S. system wide sales in 2010, driven primarily by its largest player, Panera Bread.
  • The fastest growing menu categories for the Top 100 fast-casual chains were "Better Burger" (up 16.1 percent), Asian/noodle (up 10.1 percent) and Mexican (up 9 percent).
  • Fast-casual menus are differentiating themselves through adult beverages. While they still have more room to grow, beer, wine or spirits are now sold in nearly 40 percent of fast-casual chains.
  • Panera Bread remained the sales leader among all fast-casual chains, with 2010 sales nearly over $2.9 billion, a 4.3 percent increase from 2009. Its U.S. units increased 5.5 percent to 1,376.
  • Chipotle Mexican Grill held onto the number two spot, growing sales a whopping 20.7 percent to $1.8 billion, and units 13.5 percent to 1,084 locations.

"This category has essentially blown through the recession without skipping a beat," says Technomic executive vice president Darren Tristano. "The real pressures are now coming from other types of concepts that have taken note and are positioning themselves alongside their fast-casual counterparts. Quick-service restaurants are revamping their offerings and décor in an attempt to provide value beyond low prices and take back market share."

Tristano also points out that increased competition is becoming a concern, as new concepts continue to establish themselves and compete in the fast-casual marketplace.

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