Study: Consumers expect more from limited-service restaurants

Customers not only note fewer distinctions between quick-service and fast-casual restaurants, but they also would welcome more blurring of the lines between the two limited-service categories, according to new research from Technomic Inc.

The Chicago-based market research firm found in its latest study, “Future of LSR: Fast-Food & Fast-Casual Restaurant Consumer Trend Report,” that expectations for convenience continue to grow for both quick-service and fast-casual brands.

For example, 30 percent of 1,500 people surveyed now expect delivery options from fast-food restaurants and 28 percent of respondents expect them from fast-casual brands. Similar proportions of people told Technomic that such services could encourage more frequent visits to certain chains.

“Limited-service restaurants will need to compete for visitation by focusing on their convenience platforms, amenities and ambience, in addition to the quality of their ingredients,” Darren Tristano, executive vice president for Technomic, said in a statement. “Fast-food concepts in particular can differentiate themselves and better compete with fast-casual concepts by adding loyalty programs, free Wi-Fi or enhancing their ambience.”

Last week, Arby’s announced a major remodeling initiative with the intent of positioning its brand between quick-service and fast-casual competitors in terms of ambience, price point and menu offerings. Several brands in the quick-service segment have found success in updating their building designs to include more fast-casual looks, including McDonald’s, Burger King and Wendy’s.

Technomic found that décor remains as important as ever for fast-casual chains, as 53 percent of fast-casual consumers responded that they expect an upscale yet relaxing atmosphere. The stakes appear to be greater now, Technomic noted, as 17 percent of respondents said they would go elsewhere if a restaurant did not offer the ambience they sought, a 12-percent rise from a matching report in 2012.

For the moment, quick-service brands hold an edge in frequency of customer visits, as 64 percent of respondents said they eat at a fast-food restaurant at least once a week, compared with 40 percent of respondents who dine at fast-casual brands that often. Of those consumers, 39 percent visit quick-service restaurants more than once a week, compared with 19 percent who visit fast-casual brands multiple times per week.

Survey respondents said more convenient delivery or ordering services would increase the appeal of certain limited-service restaurants, Technomic noted. Across much of quick service and fast casual, that has meant the testing and adoption of smartphone apps for mobile loyalty or payment.

Wendy’s released mobile payment functionality on its MyWendy’s app in March, just ahead of Burger King. Segment leader McDonald’s still is in the process of testing its mobile solution. Starbucks’ mobile platform with order-ahead functionality and mobile payment has been touted by one of the brand’s executives as a potential “holy grail for throughput.”

Zoës Kitchen and Blimpie were among several chains that reported success engaging with consumers and motivating them to visit more often through smartphone apps with a game element.

A major part of Panera Bread’s upgrade initiative, called “Panera 2.0,” revolves around adopting mobile and kiosk ordering.

Technomic also found that health, as well as convenience, could be an opportunity to capture more customers, especially for fast-casual brands. While 53 percent of fast-casual consumers said healthful menu items were important, 63 percent expect such dishes. Fast-casual users were also slightly more willing than fast-food customers were to pay more for more healthful items, Technomic noted.

Contact Mark Brandau at [email protected].
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