Table of Contents
Executive Summary
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- Market overview
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- Figure 1: Total US retail sales and forecast of limited service restaurants*, at current prices, 2019-24
- Impact of COVID-19 on QSRs
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- Figure 2: Short, medium and long term impact of COVID-19 on QSRs, April 2020
- Top takeaways
- The issues
- Dining out will suffer in a recession
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- Figure 3: Spending cuts after job loss – NET any rank, November 2019
- Drive-thrus see increased legal bans
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- Figure 4: Fast food purchase drivers, by demographics, February 2020
- The opportunities
- Parents are increasingly relying on fast food to feed their family
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- Figure 5: Fast food purchases for children year over year, by parental status, February 2020
- Gen Zs and Millennials are driving the shift of fast food consumption to off-premise
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- Figure 6: Fast food dining behaviors year over year, by generation, February 2020
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- Figure 7: Change in takeout and delivery behavior, April 2020
- QSRs must continue to invest in environmentally friendly packaging
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- Figure 8: Fast food innovative concept interest, by age, February 2020
- What’s next
The Impact of COVID-19 on QSRs
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- Figure 9: Short, medium and long term impact of COVID-19 on QSRs, April 2020
- Opportunities and Threats
- The US restaurant industry will become smaller
- Foodservice retail threat will cut in
- Off-premise investments will reward QSRs
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- Figure 10: Change in takeout and delivery behavior, April 2020
- Mintel’s Global Trend Pillars Localism, Community will motivate restaurant visitation
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- Figure 11: Popeyes TV campaign, April 2020
- Driven by consumers’ desire for nostalgia, QSR comfort food will win short-term sales gains
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- Figure 12: McDonald’s video campaign, March 2020
- Value and family meals will take center stage in the short and medium terms
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- Figure 13: Chick-fil-A email “Introducing easy meal ordering to feed your family,” April 3, 2020
- Impact on the QSR market
- 2020 LSR sales nosedive because of COVID-19
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- Figure 14: Total US retail sales and forecast of limited service restaurants*, at current prices, 2019-24
- How the crisis will affect QSRs’ key consumer segments
- Consumers overall, including key segments, are choosing grocery over restaurants and will continue to do so to some extent in the longer-term
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- Figure 15: COVID-19 lifestyle changes, March - April 2020
- Core customers slightly more reliant on QSRs that consumers overall, underscoring the importance of continued communication and connection
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- Figure 16: Fast food restaurant visitation, by select demographics, February 2020
- But a lack of dine-in service will hurt QSRs’ appeal to core users into the medium-term
- How a COVID-19 recession will reshape the QSR industry
- Dining out will take a big hit if US enters a recession
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- Figure 17: Spending cuts after job loss – NET any rank, November 2019
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- Figure 18: Spending cuts after job loss – NET any rank, by gender, November 2019
- COVID-19: US context
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The Market – What You Need to Know
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- LSRs will see sharp sales declines due to COVID-19
- Dining out will suffer during a recession
- Fast casual growth slows
Market Size and Forecast
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- 2020 LSR sales nosedive because of COVID-19
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- Figure 19: Total US retail sales and forecast of limited service restaurants*, at current prices, 2019-24
Market Breakdown
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- Fast casual restaurants continue to steal share from QSRs, but at a slower pace year over year
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- Figure 20: percentage share of Top 200 limited service restaurant sales, by segment, 2017-18*
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- Figure 21: Top 200 limited service restaurant sales and percentage sales growth, by segment, 2016-18*
Market Perspective
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- Segment blurring deepens
- Retailers compete with QSR convenience
Market Factors
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- Drive-thru bans
- Dining out will take a big hit if US enters a recession
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- Figure 22: Spending cuts after job loss – NET any rank, November 2019
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- Figure 23: Spending cuts after job loss – NET any rank, by gender, November 2019
Key Trends – What You Need to Know
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- Winning QSR chains excel in technology, value
- Off-premise business takes over
- Plant-based and chicken innovation dominates QSR menus
- Environmentally friendly takeout packaging will move center stage
QSR Chain Landscape
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- Trend drivers – what motivates consumer visitation among Top 10 QSR chains?
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- Figure 24: Mintel’s Global Trend Drivers and Pillars
- Figure 25: Leading 10 QSR chains among top 200 chains, 2017-18*
- Chick-fil-A taps into value and technology to jump ahead four spots in Top 200 restaurant chain ranking
- Domino’s dominates technology and value, and gains from Papa John’s identity struggles
- Starbucks wins with surrounding, technology and experiences to maintain strong growth
What’s Working
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- Off-premise investments
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- Figure 26: Change in takeout and delivery behavior, April 2020
- Loyalty programs
- Plant-based innovation
- Chicken menu items hatch across QSRs
What’s Struggling
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- Breakfast wars rage on
What’s Next?
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- Moveable feasts
- Ghost restaurants
- Mobile kitchens
- A nostalgic return to comfort
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- Figure 27: McDonald’s video campaign, March 2020
- Environmentally friendly takeout packaging
The Consumer – What You Need to Know
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- Parents are key to QSR business
- Cost concerns stymie QSR menu innovation
- Young consumers drive demand for more eco-friendly QSR packaging
Fast Food Restaurant Visitation
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- Young dads are core fast food customers
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- Figure 28: Fast food restaurant visitation, by select demographics, February 2020
Fast Food Purchase Drivers
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- Fast service is more important than special deals at fast food restaurants
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- Figure 29: Fast food purchase drivers, February 2020
- Fast service will eventually become more important than location of fast food restaurants
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- Figure 30: Fast food purchase drivers, by generation, February 2020
- Drive-thru service is important for Hispanic visitation to QSRs
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- Figure 31: Fast food purchase drivers, by race and Hispanic origin, February 2020
- QSRs can win business from higher income consumers with a nice atmosphere and healthy menu options
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- Figure 32: Fast food purchase drivers, by income, February 2020
- Moms rely on the drive-thru
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- Figure 33: Fast food purchase drivers, by parental status, February 2020
- Healthy options can improve fast food purchases by 8%
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- Figure 34: TURF Analysis – Fast food purchase drivers, February 2020
Fast Food Technology
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- About half of consumers are uninterested in third-party delivery from fast food restaurants
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- Figure 35: Fast food technology, February 2020
- Consumers are increasingly engaging with QSR technology
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- Figure 36: Year-over-year fast food technology usage and intent, February 2020 and February 2019
- Young Millennials drive growth of QSR technologies
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- Figure 37: Fast food technology, by generation, February 2020
- Black and Hispanic consumers are biggest users of fast food delivery
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- Figure 38: Fast food technology, by race and Hispanic origin, February 2020
- Parents are much more likely than non-parents to use QSR tech
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- Figure 39: Fast food technology, by parental status, February 2020
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- Figure 40: Chick-fil-A email “Introducing easy meal ordering to feed your family,” April 3, 2020
Innovative Fast Food Technology Interest
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- Nearly half of QSR customers want dedicated drive-thru lanes for mobile/online order pickups
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- Figure 41: Innovative fast food technology interest, February 2020
- Gen Zs drive interest in mobile-based subscription programs at QSRs
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- Figure 42: Innovative fast food technology interest, by generation, February 2020
- Non-White consumers look for more innovative QSR tech
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- Figure 43: Innovative fast food technology interest, by race and Hispanic origin, February 2020
- City fast food stores should consider testing walk-up windows
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- Figure 44: Innovative fast food technology interest, by area, February 2020
Fast Food Menu Item Interest
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- Value meals and snacks are expectations at QSRs
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- Figure 45: Fast food menu item interest, February 2020
- Gen Zs won’t pay for premium meats at QSRs
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- Figure 46: Fast food menu item interest, February 2020
- Black and Asian QSR customers drive interest in meatless menu items
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- Figure 47: Fast food menu item interest, by race and Hispanic origin, February 2020
- Higher income QSR consumers are most interested in global bowls and plant-based burgers
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- Figure 48: Fast food menu item interest, by household income, February 2020
Fast Food Dining Behaviors Year over Year
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- Parents increasingly lean on fast food meal solutions
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- Figure 49: Fast food dining behaviors year over year, February 2020
- Dads in particular rely on fast food
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- Figure 50: Fast food dining behaviors year over year, by parental status and gender, February 2020
- Young consumers are increasingly eating their fast food off-premise
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- Figure 51: Fast food dining behaviors year over year, by generation, February 2020
Fast Food Innovative Concept Interest
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- Fast food consumers want to see more eco-friendly packaging options
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- Figure 52: Fast food innovative concept interest, February 2020
- 18-34 year olds are driving the demand for better QSR packaging
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- Figure 53: Fast food innovative concept interest, by age, February 2020
- Black consumers show highest interest in functional QSR ingredients
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- Figure 54: Fast food innovative concept interest, by race and Hispanic origin, February 2020
- Parents drive demand for trendy and high protein diet fare at QSRs
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- Figure 55: Fast food innovative concept interest, by parental status, February 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Consumer
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- TURF Methodology
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