Limited-service restaurants (LSRs) are the driving force behind the commercial foodservice industry. LSRs accounted for more than half ($200 billion) of total industry sales despite their low check averages in comparison to full-service restaurants.
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 menus and concept positioning—not only to keep pace, but to compete directly with fast-casual leaders.
“The key to LSR growth is differentiation,” says Executive Vice President Darren Tristano. “Many LSRs that have demonstrated growth have a broad consumer appeal, yet each has a discerned approach. Consumers are looking for fresh, better quality ingredients, a contemporary décor and ambiance, and interactive service formats to offer something unique and enhance the customer experience.”
Fast-food patronage thrives on its convenience and value, while food distinction and ambiance are key factors driving patronage at fast-casual locations. Look for a blurring of the lines between fast-food and fast-casual restaurants, with operators in each sub-segment tweaking their concepts with new unit designs and convenient service formats in order to remain competitive.
To help operators and others aligned with the foodservice industry more effectively identify opportunities for growth and gain a competitive advantage, Technomic has developed The Future of LSR: Fast-Foods & Fast-Casual Restaurants Consumer Trend Report.
Interesting findings include:
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