Fast Casual Remains Strong
Panera continues to dominate, study says
CHICAGO -- Fast-casual restaurants, featuring upscale settings for fast service and fresh, high-quality and healthy food, continue to hold strong consumer appeal and demonstrate solid average unit volumes. According to Technomic's recently released Top 100 Fast Casual Chain Restaurant Report, the cluster experienced more than 14% annual growth in 2006, compared to roughly 6% for the U.S. chain restaurant industry at large.
Panera continues to dominate in fast casual, with nearly $2 billion in 2006 sales, almost 20% annual growth over 2005. Other leaders [image-nocss] include Panda Express, Chipotle, Boston Market and El Pollo Loco. Chicago-based Technomic estimates total sales for the fast-casual segment at $15 billion.
Fast casual occupies a strong niche position with consumers, providing a way for budget-conscious casual dining customers to trade down,ï¿½ while also giving traditional quick-service customers a chance to trade upï¿½ to small, affordable luxuries. For just $2-$4 more, consumers can buy food that offers superior freshness, more taste and appeal, and perhaps better nutrition. Although fast casual has a strong takeout component (as much as 50% of sales), it also typically offers a comfortable, colorful third placeï¿½ environment that encourages lingering and socializing.
The success of fast-casual players has not gone unnoticed by other chains. Some casual dining operators have been successful in carving out a niche in the fast-casual market by creating brand extensions,ï¿½ said Darren Tristano, executive vice president of Technomic Information Services. Examples include California Pizza Kitchenï¿½s CPK ASAP and Don Pablosï¿½ Pabloï¿½s Fajita Grill.