Shifts in dining dayparts have also had a major impact on segment success. For quick-service, breakfast and lunch have both increased by 1 percent, Riggs says, while snack traffic has been flat. Dinner traffic, she notes, has declined by 1 percent and has been flat or negative for the past four years. Of course, the inroads convenience stores and supermarkets have made into all dining dayparts should be noted.
But there is still one segment in which quick-serves reign supreme over c-stores.
1. Burger
When it comes to limited-service, most restaurant industry–research experts are bullish on burgers, unanimously naming this segment as the leader of the pack with behemoth bun slingers such as McDonald’s setting the pace.
But it’s not necessarily the burgers themselves that give this segment its strong stance, says Jeff Davis, president of Sandelman & Associates. He explains that it was actually when gas prices recently soared to nosebleed heights that cash-strapped consumers came flocking to the closest fast-feeders they could find, and that meant the ones with the most locations. When their wallets were further walloped by the economic dive and dining-out dollars became even more scarce, they returned to the places that they considered the “safest bets” as far as familiarity and reliability.
For core product-centric operations such as In-N-Out Burger, Burger King, Smashburger, Mooyah Burger, and Five Guys, there’s no doubt that it’s the beef that brings them in. For chains like McDonald’s, however, part of the appeal is the wide variety of menu options besides burgers that make them more attractive to families. In all cases, it’s as much the brand as the burger that keeps these operations top of mind for consumers.
According to Sandelman & Associates’ 2008 Quick-Track study of quick-service restaurant occasions spanning 80 U.S. markets, the burger segment increased its share of the quick-service market from 40 percent in 2006 to 46 percent in 2008.
“There’s no doubt that margins are crunched, but visitations are strong,” Davis says. NPD’s findings support that. According to Riggs, burger operations have seen traffic increase by 126 million visits, or 1 percent. “One percent might not seem like much at first glance,” she says. “But it’s important to keep in mind that the segment was already extremely large.”
2. Sandwich
Far behind the burgers but coming on strong is the sandwich segment led by Subway. Overall, the segment share rose from 10 percent in 2006 to 12 percent in 2008. “Subway is knocking down the doors with its $5 footlong,” Davis says.
In addition to price, consumers feel good about the product itself and the fact that they don’t have to trade off quality, freshness, and a healthful product for good value. Before this offer, consumers might have viewed the product as somewhat pricey, so the value is even greater. While Subway’s $5 footlong is the segment barrier buster, Quiznos has already revved up to rival that success with the recent introduction of its $4 Torpedo sub that also measures one full foot. And Arby’s is parrying with a toasted sub sandwich combo (with fries and a drink) for $5.
NPD found that nonburger sandwich options such as Subway, Chick-fil-A, and Arby’s experienced traffic increases by about 190 million visits last year, up 5 percent over the year before. Share of market for the sandwich segment is about 8 percent. Tristano predicts that this category is in a good position to continue to grow.
3. Mexican
Not all quick-serve segments are faring as well as burgers and sandwiches, though. The Mexican segment, ranging from Taco Bell to Chipotle, is only “up slightly,” according to Technomic research, with share of market increasing from about 8 percent in 2006 to 9 percent in 2008. Visits to Mexican quick-service operations increased by 116 million visits, translating to a 5 percent increase. Riggs attributes a good part of this increase to Taco Bell’s adherence to its “Why Pay More?” premise by offering 79-, 89-, and 99-cent menu items. The chain’s success with lowered price points is yet another example of customers flocking toward deals in a tough economy.
4. Bakery/Café
Even sans the dollar menu however, bakeries and cafés are still going strong. While the segment owns only 1 percent of the market, bakery/cafés leader Panera shows no sign of slowing. The chain brought in many of the more than 42 million visits the segment saw in 2008, an 8 percent jump from 2006, Riggs says. It is likely that the climb is partially being supported by consumers trading down from full-service restaurants. Because the bakery/café segment has been such a small player, Tristano projects that as consumers continue to search for economical dining-out alternatives, there is ample opportunity for the segment to “out-perform all of its competitors in the limited-service category.”
While their growth might be somewhat slowed by their lack of competitive low-end value offerings, focusing on breakfast and lunch rather than dinner is a benefit for fast-casual chains.



