Opportunities abound for fast casuals, despite slowing growth: Report
Technomic, a Chicago-based foodservice consultancy, is reporting the sales growth rate for the fast-casual segment of the restaurant industry is indeed slowing. According to its 2018 Top 250 Fast-Casual Chain Restaurant Report, total sales growth for the top restaurant chains in the segment was just 9 percent in 2017. In 2015, Technomic reported top fast casual restaurant chains were growing sales at a 11.5-percent clip. Also unit growth rate in 2015 was 9.8 percent, but in 2017, growth was just 6.1 percent.
There were some winners in the segment: CoreLife Eatery and Wahlburgers are reported to have had triple-digit unit growth rate. The smallest category in the fast-casual segment, the pizza category, performed the best, with sales increasing 27.3 percent in 2017 from the prior year. Also, chicken was a hot protein and a hot category in 2017.
The future of the segment is still evolving and new development trends, including the rise of Middle Eastern concepts, are appealing because they showcase “exotic, new flavors” while presenting these foods as healthful dining choices. Fast casuals will continue to pursue clean-label (“free-from”) ingredients and eco-friendly initiatives, which is supported by shifting consumer eating preferences, according to the report.
As U.S. saturation nears, chains have opportunities in underdeveloped markets, including Australia, Mexico, Saudi Arabia, Spain, South Korea and the United Arab Emirates. More details about the report can be found on the Technomic website.
Photo credit: Wahlburgers