Quick Service Restaurants - US - August 2009

SCOPE AND THEMES
What you need to know
Definition
Figure 1: QSR companies comprising market size, by segment, 2009
Changes to 2009 QSR market size
Data sources
Sales data
Mintel Menu Insights
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The challenge of a recession
QSRs continue growth
Competitors are going for the bulls-eye
Burger restaurants dominate QSR sales
Influential demographics
QSR chain profiles
Brand focus: Jack in the Box’s maverick mentality
Advertising and promotion activity
Menu innovation stepping it up
Health on the menu—a long way to go
Technology expectations
Where consumers go to eat
How consumers use fast food
Fast food and the Hispanic consumer
QSRs and the quintessential child consumer
How consumers make the choice between QSRs
INSIGHTS AND OPPORTUNITIES
Key points
Embrace health for “real”
Analyze the competition: fast casual doing fresh right
Eliminate the veto factor
Good news—there’s money in health
Hey burger guys, where’s the family meal deal?
INSPIRE INSIGHTS
Premium and Cutthroat
What's it about?
What we’ve seen
A funny thing happened on the way to recession
A funny thing happened on the way through the recession
But will a (not-so-) funny thing happen after the recession?
MARKET SIZE AND FORECAST
Key points
Trading down to QSR
Rising retail prices suggest underlying traffic issues
Figure 2: Average price per entrée, by restaurant segment, 2007, 2008, and 2009
Time is of the essence—future QSR sales potential
Figure 3: Total U.S. QSR sales and forecast, at current prices, 2004-12
Figure 4: Total U.S. QSR sales and forecast, at inflation-adjusted prices, 2004-12
COMPETITIVE CONTEXT
The quest for the dining out dollar
Casual restaurants not going down without a fight
Family/midscale not giving in during breakfast
Coffeehouses and donut shops branching out
Fast casual trumps QSRs from a fresh/health perspective
Can QSRs compete with a premium platform?
Value remains an essential component to the QSR competitive strategy
SEGMENT PERFORMANCE
Overview
Burgers, burgers everywhere…
… but not at other QSRs
Figure 5: U.S. sales of leading QSR chains, by “food” segment, 2006-08
SEGMENT PERFORMANCE—BURGER RESTAURANTS
Key points
The war is on
Going for the unexpected
Dropping the price bomb
Figure 6: U.S. sales of leading burger QSR chains, 2006 and 2008
SEGMENT PERFORMANCE—SANDWICH RESTAURANTS
Key points
Striking the balance between QSR and fast casual
Maintaining the QSR value mentality
Health via freshness
Figure 7: U.S. sales of leading sandwich QSR chains, 2006 and 2008
SEGMENT PERFORMANCE—CHICKEN RESTAURANTS
Key points
Finding a niche
Chick-fil-A: the original chicken sandwich
El Pollo Loco: ethnic menu inspiration
Bojangles: Differentiating by daypart
KFC: Rebranding for health
Figure 8: U.S. sales of leading chicken QSR chains, 2006 and 2008
SEGMENT PERFORMANCE—MEXICAN RESTAURANTS
Key points
Strategic value pricing
Taco Bell remains focused on value
Del Taco—made to order, customizable
Figure 9: U.S. sales of leading mexican QSR chains, 2006 and 2008
SEGMENT PERFORMANCE—“OTHER” RESTAURANTS
Key points
Ethnic cuisine fuels growth
Unit expansion driven by demand for ethnic flavors
Figure 10: U.S. sales of leading “other” QSR chains, 2006 and 2008
MARKET DRIVERS
Restaurant industry recession continues, but the bottom may be in sight
Figure 11: Restaurant Performance Index, current situation, and expectations, May 2007-May 2009
Consumer confidence undermines willingness to spend at restaurants
Figure 12: Consumer Sentiment Index, by quarter, 2001-09
Figure 13: QSR restaurant spend compared to last year, by selected demographics, May 2009
Recession reshapes the family dynamic
Increasing number of potential child diners in the U.S.
Figure 14: Population by age, 2004-14
Fewer jobs for teens means less spending
Hispanics—the essential QSR patron
Figure 15: Child population (0-12), by ethnicity/race, 2004-14
Appealing to Hispanics
RESTAURANT ANALYSIS: MCDONALD’S
Continued success
Targeting adults: Premium beverages
Losing traction with Hispanics
Figure 16: McDonald’s usage, by race/ethnicity, October 2007-December 2008
McDonald’s and kids: The power of the brand
Figure 17: Children’s self-reporting restaurant usage, by restaurant, by age, March 2009
RESTAURANT ANALYSIS: BURGER KING
Growth momentum
BK’s future focus
Remaining focused on young males
Figure 18: Burger King usage, by selected demographics, October 2007-December 2008
RESTAURANT ANALYSIS: WENDY’S
Attempting a rebound
Menu changes
Future focus
Premium brand quality attracts select demographics
Figure 19: Wendy’s usage, by select demographics, October 2007-December 2008
RESTAURANT ANALYSIS: TACO BELL
Marketing the trifecta: Value; freshness; bold flavors
Focused on value
Associating with freshness
Signature bold flavors
Taco Bell—a hot spot for young consumers
Figure 20: Taco Bell’s usage, select demographics, October 2007-December 2008
RESTAURANT ANALYSIS: SONIC
Keeping up with the Joneses
Playing to its strengths
What’s in store for the future
Southern regional footprint creates strong consumer base
Figure 21: Sonic’s usage, by region, October 2007-December 2008
RESTAURANT ANALYSIS: CHICK-FIL-A
Cultivating loyalty
Chick-fil-A core consumer—30-something, Southern, and high income
Figure 22: Chick-fil-A’s usage, by select demographics, October 2007-December 2008
RESTAURANT BRAND QUALITIES: JACK IN THE BOX STUDY
Sales performance
Remaining true to its reputation as a “menu maverick”
Figure 23: Jack in the Box’s usage, by age, May 2009
Updating Jack
Reimaging its stores for modern appeal
New logo goes casual
Marketing mania: Capitalizing on Jack
A brand for Hispanics
Figure 24: Jack in the Box’s usage, by Hispanic origin, May 2009
ADVERTISING AND PROMOTION
 OVERVIEW
Figure 25: Top ten QSR advertisers, 2007 and 2008
Promoting quality
Spinning value
Marketing the value menu
Discount deals
Figure 30: Popeyes television ad, Feed 4 for $4, February 2009
Providing the “economical” answer
Pushing the boundaries
Burger King
CKE Restaurants: Hardee’s and Carl’s Jr.
Quizno’s
INNOVATIONS AND INNOVATORS: MENU INNOVATION
Key points
The QSR food menu—move towards unique and premium fast food
Figure 32: Top 5 cuisine types, top quick service restaurants, 2007, 2008, and 2009
Figure 33: Interest in trying burgers made with Angus beef, by gender, May 2009
Breakfast: A point of differentiation
Figure 34: Interest in trying all-day breakfast, by age, May 2009
The QSR beverage menu—focus on premium beverages
Figure 35: Non-alcoholic beverage types, top quick service restaurants, Q2 2007-Q2 2009
Tea
Coffee
Figure 36: Interest in trying selected beverage options, by gender, May 2009
Blurring the line between shakes, smoothies and frozen beverages
Figure 37: Interest in trying selected beverage options, by gender, May 2009
INNOVATION AND INNOVATORS: HEALTH ON THE MENU
Key points
Health: Consumers’ perceptions
Figure 38: Consumer diet self-perceptions, degree of healthfulness, May 2009
Figure 39: Importance of eating healthfully, degree of importance, May 2009
Figure 40: Restaurant segment usage, by diet healthfulness, May 2009*
Defining health
Is health on the menu all smoke and mirrors?
Figure 41: Top quick service restaurant menu items, by nutritional claim, Q2 2008-Q2 2009
Making legitimate statements regarding health on the menu
INNOVATION AND INNOVATORS: TECHNOLOGY
Key points
Using technology to enhance convenience
Online ordering
Mobile messaging
Interest in on-site internet access
Figure 42: Interest in trying new options, 2007, 2008 and 2009
RESTAURANT USAGE OVERVIEW
Key points
Restaurant usage
Figure 43: Restaurant usage in last year, by selected demographics, May 2009
Restaurant usage, by segment
Demographic analysis
Figure 44: Usage of restaurant segments in past three months, by gender, May 2009
Figure 45: Usage of restaurant segments in past three months, by selected HH income groups, May 2009
Addendum: Consumer question explanation
QSR RESTAURANT USAGE AND USAGE FREQUENCY
Key points
Overview
Figure 46: QSR usage and usage frequency, by restaurant, May 2009
Demographic analysis
Figure 47: QSR usage and usage frequency, top ten restaurants, by gender, May 2009
Figure 48: QSR usage and usage frequency, top ten restaurants, by HH income, May 2009
QSR RESTAURANT USAGE—RACE AND ETHNICITY
Key points
QSR usage by race/ethnicity
Figure 49: Top 10 QSR usage, by race/ethnicity, October 2007-December 2008
Acculturated versus non-acculturated Hispanics
Figure 50: Top ten QSR Hispanic usage, by degree of English spoken in home, October 2007-December 2008
QSR USAGE AND KIDS
Key points
How often kids go to fast food restaurants with parents
Figure 51: Likelihood of children going with parents to fast food restaurants, by gender, May 2009
Kids’ and teens’ usage of specific fast food restaurants in past month
Figure 52: Children’s self-reporting restaurant usage, by restaurant, by age, March 2009
Teen and kid usage of fast food restaurants by daypart
Figure 53: Teen use of fast food restaurants, by daypart and race/ethnicity, October 2007-December 2008
Figure 54: Kids’ use of family restaurant/steakhouses and fast food restaurants, by daypart and race/ethnicity, October 2007-December 2008
QSR ATTITUDES AND KIDS
Key points
Overview
Figure 55: Kids’ attitudes toward fast food, by gender, May 2009
QSR RESTAURANT SELECTION FACTORS
Key points
Historical trends
Figure 56: Reasons for selecting a QSR, 2007, 2008, and 2009
Demographic analysis
Figure 57: “Important” reasons for selecting a QSR, by gender, May 2009
Figure 58: “Important” reasons for selecting a QSR, by age, May 2009
CLUSTER ANALYSIS
Statics
Who they are
Opportunity
Dynamos
Who they are
Opportunity
Dealers
Who they are
Opportunity
Cluster characteristics
Figure 59: QSR clusters, May 2009
Figure 60: Important limited service characteristics, by quick service restaurant clusters, May 2009
Figure 61: QSR restaurant spend compared to last year, by QSR clusters, May 2009
Figure 62: Interest in trying new options, by QSR clusters, May 2009
Figure 63: Interest in trying new options II, by QSR clusters, May 2009
Figure 64: Reasons for selecting a QSR, by QSR clusters, May 2009
Figure 65: Restaurant segment visits, by QSR clusters, May 2009
Cluster demographics
Figure 66: QSR clusters, by gender, May 2009
Figure 67: QSR clusters, by age, May 2009
Figure 68: QSR clusters, by HH income, May 2009
Figure 69: QSR clusters, by race, May 2009
Figure 70: QSR clusters, by Hispanic origin, May 2009
Cluster methodology
APPENDIX: ADDITIONAL CONSUMER TABLES
Parents of kids aged 1-5
Figure 71: Parents of kids aged 1-5 dining out attitudes and behaviors, by gender, March 2009
Parents of kids aged 6-11
Figure 72: Parents of kids aged 6-11 dining out attitudes and behaviors, by gender, March 2009
Parents of kids aged 12-17
Figure 73: Parents of kids aged 12-17 dining out attitudes and behaviors, by gender, March 2009
APPENDIX: TRADE ASSOCIATIONS