LSRs Continue to Grab Foodservice Market Share

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LSRs now account for 53 percent of the commercial foodservice industry.

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Limited-service restaurants (LSRs) are the driving force behind the commercial foodservice industry, according to a new study by Chicago-based Technomic. LSRs accounted for more than half ($200 billion) of total industry sales despite their low check averages in comparison to full-service restaurants.

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Ten years ago LSRs made up 47 percent of the total commercial foodservice industry while full-service restaurants (FSRs) made up 53 percent. Now the landscape has reversed; LSRs account for 53 percent and FSRs 47 percent. Within the LSR segment, fast-casual restaurants continue to gain market share while fast-food restaurants are working overtime to upscale their menu and concept positioning — not only to keep pace but to compete directly with fast-casual leaders, according to Technomic's The Future of LSR: Fast-Foods & Fast-Casual Restaurants Consumer Trend Report.

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Fast-food patronage thrives on its convenience and value, while food distinction and ambiance are key factors driving patronage at fast-casual locations, according to Technomic. Look for a blurring of the lines between fast-food and fast-casual restaurants, with operators in each subsegment tweaking their concepts with new unit designs and convenient service formats in order to remain competitive.

Other findings from the Technomic study include:

  • Consumer disparity — 72 percent of consumers visit fast-food restaurants once a week or more, while only half (49 percent) visit fast-casual restaurants, partly because there are fewer locations but also because they are more attractive to higher income consumers.
  • Lunch patronage — Consumers visit fast-food and fast-casual restaurants for lunch more often than for any other daypart; 21 percent purchase fast-food lunches at least twice a week and 19 percent visit fast-casual restaurants, largely due to time pressures.
  • Menu incidence — Breakfast sandwiches have grown by 35 percent at fast-food restaurants and by 29 percent at fast-casual chains, showing the strength of breakfast entrées at LSRs.
  • Health and wellness — Gluten-free options and the growing importance of better-for-you kids' meals continue to guide better-for-you LSR menu development.
  • Global inspiration — Street food influences continue. Rustic, handheld street foods with a global spin have helped LSR menu developers create unique offerings. Consumers look for new flavor supplements for their sophisticated palettes.
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