Fast Casual Restaurants: Incl Impact of COVID-19 - US - November 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: fast casual restaurant market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Figure 1: Total US sales and forecast of limited-service eating places* at current prices, 2015-25
Impact of COVID-19 on fast casual restaurants
Figure 2: Short-, medium- and long-term impact of COVID-19 on fast casual restaurants, November 2020
Opportunities and challenges
Fast casual visitation frequency is severely depressed in 2020
Figure 3: Fast casual restaurant visitation frequency year over year, February 2020 and August 2020
Fast casuals should focus on dayparts outside of core lunch business
Figure 4: Fast casual restaurant occasions by visitation, by age, August 2020
Fast casuals can beat FSRs and QSRs on value
Figure 5: Fast casual restaurant attitudes – NET agreement, by race and Hispanic origin, August 2020
Innovative off-premise services will boost fast casual revenue into recovery
Figure 6: Fast casual restaurant innovative concept interest, February 2020 and August 2020
THE MARKET – KEY TAKEAWAYS
LSR sales drop in 2020 but are still outperforming FSRs
Fast casual sales were outpacing QSR sales, but 2020 will look different
Recessions benefit fast casuals
MARKET SIZE AND FORECAST
COVID-19 spurs sharp decline in 2020 LSR sales
Figure 7: Total US sales and forecast of limited-service eating places* at current prices, 2015-25
Figure 8: Total US sales and forecast of limited-service eating places* at current prices, 2015-25
Impact of COVID-19 on fast casual restaurants
Figure 9: Short-, medium- and long-term impact of COVID-19 on fast casual restaurants, November 2020
COVID-19: US context
MARKET BREAKDOWN
Fast casual growth outpaces fast food
Figure 10: Percentage share of Top 200 limited-service restaurant sales by segment, 2017-19*
Figure 11: Top 200 limited-service restaurant sales and percentage sales growth by segment, 2017-19*
MARKET FACTORS 
Great Recession spurred prior fast casual boom
Figure 12: Total US sales and estimate of fast casual restaurants, at current prices, 2007-13
Indoor dining fears lessen but are still high
Figure 13: Comfort level dining inside a restaurant, July 15, 2020-October 5, 2020
Higher unemployment rates among Black and Hispanic Americans could drive fast casual visitation
Figure 14: Unemployment rate, by overall, Hispanic and Black Americans, January 2007-September 2020
Work from home growth strains fast casuals near and in office buildings
Figure 15: COVID-19 employment status, September 2020
Figure 16: Work expectations for 2021, September 2020
MARKET OPPORTUNITIES 
Fast casual food trucks make a comeback
Think small
Figure 17: Chipotle email, “Support local farms from your couch,” June 30, 2020
Reconsider menu item names, descriptions 
COMPANIES AND BRANDS – KEY TAKEAWAYS 
The pandemic doesn’t benefit all fast casual chains
Fast casuals make quick, large-scale off-premise investments
Sustainability moves to the forefront
FAST CASUAL RESTAURANT CHAIN SALES
Shake Shack makes big gains in 2019
Figure 18: Leading 15 fast casual chains among Top 200 chains, 2018-19
The pandemic churns out fast casual chain winners and losers 
Panera Bread carries on, while other bakery café chains falter 
Unlike fast food pizza, not all fast casual pizza chains are thriving in pandemic 
COMPETITIVE STRATEGIES 
Fast casual chains quickly pivot to pandemic needs
Figure 19: Shake Shack email, “Attention campers: burgers are on us!” July 13, 2020
FSRs continue to expand to fast casual formats 
Bowls blow up
Sustainability initiatives forge ahead
Figure 20: Chipotle email, “Introducing Real Foodprint,” October 26, 2020
THE CONSUMER – KEY TAKEAWAYS
Young consumers and parents are core fast casual restaurant customers
Digital ordering and off-premise service become top-of-mind for fast casuals in pandemic
Young, Black and Hispanic consumers drive breakfast and snack business
RESTAURANT VISITATION
Fast casual recovery is slower than fast food, but much better than FSRs
Figure 21: Restaurant visitation in past three months, February 2020, August 2020 and September 2020
Fast casual core consumers are young, parents and Asian Americans 
Figure 22: Fast casual restaurant visitation in past three months, by select demographics, August 2020
RESTAURANT ORDERING METHODS
Diners slowly return to restaurants in latter half of 2020
Figure 23: Restaurant ordering methods, July 2020, August 2020 and September 2020
FAST CASUAL RESTAURANT VISITATION FREQUENCY 
Fast casual visitation frequency takes a hit during crisis 
Figure 24: Fast casual restaurant visitation frequency year over year, February 2020 and August 2020
Men, young consumers, urban dwellers and parents drive increased fast casual visits
Figure 25: Fast casual restaurant visitation frequency year over year, by select demographics, August 2020
FAST CASUAL RESTAURANT VISITATION DRIVERS
Digital ordering is the new top driver of fast casual visits as a result of the pandemic 
Figure 26: Fast casual restaurant visitation drivers, February 2020 and August 2020
FAST CASUAL RESTAURANT VISITATION BARRIERS
COVID-19 concerns are by far top reason for decreased fast casual visits 
Figure 27: Fast casual restaurant visitation barriers, February 2020 and August 2020
FAST CASUAL RESTAURANT OCCASIONS
Snacking at fast casuals has grown during pandemic 
Figure 28: Fast casual restaurant occasions by visitation and interest, February 2020 and August 2020
Youngest consumers continue to grow daypart variety at fast casuals
Figure 29: Fast casual restaurant occasions by visitation, by age, August 2020
Black and Hispanic Americans drive breakfast and snack business at fast casuals
Figure 30: Fast casual restaurant occasions by visitation, by race and Hispanic origin, August 2020
Figure 31: Fast casual restaurant occasions by interest, by race and Hispanic origin, August 2020
FAST CASUAL RESTAURANT FACTORS
Online ordering and delivery are now a greater factor in fast casual dining decision 
Figure 32: Fast casual restaurant factors – NET any rank, February 2020 and August 2020
Men drive online ordering and delivery necessity 
Figure 33: Fast casual restaurant factors – NET any rank, by gender, August 2020
Gen Zs need fast casuals to be speedy
Figure 34: Fast casual restaurant factors – NET any rank, by generation, August 2020
Black consumers care the most about fast casual delivery options
Figure 35: Fast casual restaurant factors – NET any rank, by race and Hispanic origin, August 2020
FAST CASUAL RESTAURANT INNOVATIVE CONCEPT INTEREST
Happy hour discounts are strategic way to boost sales in recession
Figure 36: Fast casual restaurant innovative concept interest, February 2020 and August 2020
Gen Z drives demand for fast casual drive-thrus 
Figure 37: Fast casual restaurant innovative concept interest, by generation, August 2020
Hispanic consumers crave menu innovation, variety at fast casuals
Figure 38: Fast casual restaurant innovative concept interest, by race and Hispanic origin, August 2020
FAST CASUAL RESTAURANT ATTITUDES
Fast casuals can win the value wars during the recession 
Figure 39: Fast casual restaurant attitudes – NET agreement, part I, August 2020
Figure 40: Fast casual restaurant attitudes – NET agreement, part II, August 2020
Consumers would rather dine at FSRs than fast casuals during pandemic
Figure 41: Fast casual restaurant attitudes – NET agreement, February 2020 and August 2020
Men are even less likely to dine in at fast casuals during pandemic 
Figure 42: Fast casual restaurant attitudes – NET agreement, by gender, August 2020
Fast casuals must do better job of marketing value to Millennials 
Figure 43: Fast casual restaurant attitudes – NET agreement, by generation, August 2020
Black and Hispanic consumers are core market to engage during recession 
Figure 44: Fast casual restaurant attitudes – NET agreement, by race and Hispanic origin, August 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 45: Total US sales and forecast of limited-service eating places,* at inflation-adjusted prices, 2015-25
Figure 46: Total US sales and forecast of full-service restaurants, at current prices, 2015-25