Quick Service Restaurants - US - August 2010

SCOPE AND THEMES
What you need to know
Definition
Data sources
Mintel Menu Insights
Consumer survey data
Advertising Creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Restaurant sales a casualty of recession
Healthy menu still lacking
Retail convenience horns in on QSR
Value menu reigns supreme
Quick-service restaurant usage and usage frequency
Consumer behavior within quick-service restaurants
Impact of the economy and the role of the dollar/value menu
Quick service comparisons to fast casual
INSIGHTS AND OPPORTUNITIES
Healthy kids’ meals are not optional
Health for all
Trans fats and high-fructose corn syrup have got to go
Setting the stage with a healthy breakfast
On the nutrition flip side…
The sustainability factor
McDonald’s local and sustainable
The undeniable social media
Bring it local
Social networking location tools
Going mobile
Food trucks are not just for independents
Tapping into GPS
INSPIRE INSIGHTS
Inspire Trend: Death of the Middle Ground
Barbell pricing, lifting a menu near you
Weighting the edges, Barbell menu strategies
Implications
MARKET SIZE AND FORECAST
Slow but growing sales
Figure 1: U.S. sales at quick-service restaurants, at current prices, 2005-15
Figure 2: U.S. sales at quick-service restaurants, at inflation-adjusted prices, 2005-15
MARKET DRIVERS
Key points
Restaurant sales a casualty of recession
Figure 3: Consumer Price Index for key consumer markets, June 2008-10
Figure 4: NRA Performance Indices, January 2009-June 2010
Figure 5: Adjusted foodservice and drinking place sales, January 2008-June 2010
Underemployment and unemployment impact spending
Figure 6: Unemployment and underemployment rates, January 2007-July 2010
Consumer confidence impacted by available disposable income
Figure 7: Real personal disposable income, January 2007-May 2010
Figure 8: Consumer sentiment index, by quarter, 2001-10
Consumers continue to seek out healthier choices on menus
Figure 9: Percentage of population who are overweight or obese—20-74s, 1988-2006
Figure 10: Would like to see more of at quick-service restaurants, May 2010
Government steps in with menu labeling requirements
COMPETITIVE CONTEXT
Key points
Retail convenience horns in on QSR cuisine
Cannibalization or self-promotion?
The competition cashes in on QSR success
Upscale burgers
SEGMENT PERFORMANCE: HAMBURGER
Value menus and meals drive traffic
Burgers for all size appetites and budgets
Burgers get an upgrade
The menu diversifies beyond the burger
SEGMENT PERFORMANCE: SANDWICH
Adopting trends from other segments: Snacks, breakfast and value menu
Ahead of the health curve
SEGMENT PERFORMANCE: CHICKEN
The tortoise and the hare: Chick-fil-A and KFC
The other players: Popeyes and Church’s
SEGMENT PERFORMANCE: MEXICAN AND OTHER
Seafood comes to the menu amid value promotions
New prototypes may point to future growth
COMPANY PROFILES
McDonald’s
Figure 11: McDonald’s systemwide revenue and net income, Q2 2009 and Q2 2010
Burger King
Figure 12: Burger King systemwide revenue and net income, Q4 2009 and Q4 2010
Wendy’s/Arby’s Group
Wendy’s
Figure 13: Wendy’s systemwide revenue and operating profit, Q2 2009 and Q2 2010
Arby’s
Figure 14: Arby’s systemwide revenue and operating profit, Q2 2009 and Q2 2010
Taco Bell
Figure 15: Yum! Brands U.S. division revenue and operating profit, Q2 2009 and Q2 2010*
KFC
MARKETING STRATEGIES
Getting the Message Out
Figure 16: Product category domestic ad spending, 2008 and 2009
Social networking
Burger King
Figure 17: Bk.com monthly visits, July 2009-June 2010
Figure 18: Burger King television ad, 2010
Wendy’s
Figure 19: Wendys.com monthly visits, January 2010-June 2010
Figure 20: Wendy's Real Value Menu television ad, 2010
Subway
Figure 21: Subway.com monthly visits, January 2010-June 2010
Figure 22: Subway $2.50 Breakfast Combo television ad, 2010
McDonald’s
Figure 23: Mcdonalds.com monthly visits, January 2010-June 2010
Figure 24: McDonald's McCafé Frappé television ad, 2010
Taco Bell
Figure 25: Tacobell.com monthly visits, January 2010-June 2010
Figure 26: Taco Bell NBA $5 Box television ad, 2010
MENU INSIGHTS ANALYSIS: THE QSR MENU
Figure 27: Top 10 QSR menu item sections, by incidence, Q2 2008-Q2 2010
Figure 28: Top 10 QSR menu item sections, by incidence and price, Q2 2008-Q2 2010
Figure 29: Top 10 QSR menu items, by incidence, Q2 2008-Q2 2010
Figure 30: Top 10 QSR menu items, by incidence and price, Q2 2008-Q2 2010
MENU INSIGHTS ANALYSIS: MARKETING THE QSR MENU
Figure 31: Top 10 marketing claims on QSR menus, by incidence, Q2 2008-Q2 2010
Figure 32: Top 10 marketing claims on QSR menus, by price, Q2 2008-Q2 2010
Figure 33: Top 10 nutritional claims on menus, by incidence, Q2 2008-Q2 2010
MENU INSIGHTS ANALYSIS: THE BEVERAGE MENU
Figure 34: Top 10 beverages on QSR menus, by incidence, Q2 2008-Q2 2010
Figure 35: Top 10 beverages on QSR menus, by incidence and price, Q2 2008-Q2 2010
MENU INSIGHTS ANALYSIS: THE KIDS’ MENU
Figure 36: Top 10 kids’ menu items at QSRs, by incidence, Q2 2008-Q2 2010
Figure 37: Top 10 kids’ menu items at QSRs, by incidence and price, Q2 2008-Q2 2010
Figure 38: Top 10 kids’ menu preparation methods at QSRs, by incidence, Q2 2008-Q2 2010
QUICK-SERVICE RESTAURANT USAGE AND USAGE FREQUENCY
Key points
Lunchtime the “most important meal of the day”
Figure 39: Quick service daypart usage, by gender, May 2010
Figure 40: Quick service daypart usage, by age, May 2010
Figure 41: Quick service daypart usage, by race/Hispanic origin, May 2010
McDonald’s has by far the greatest popularity
Figure 42: Quick-service brand usage, May 2010
Figure 43: Quick-service brand usage, by gender, May 2010
Figure 44: Quick-service brand usage, by age, May 2010
Figure 45: Quick-service brand usage, by household income, May 2010
Figure 46: Quick-service brand usage, by race/Hispanic origin, May 2010
Figure 47: Quick-service brand usage and frequency, May 2010
Figure 48: Quick-service brand frequency usage, by age, May 2010
Figure 49: Quick-service brand frequency usage, by household income, May 2010
Figure 50: Quick-service brand frequency usage, by race/Hispanic origin, May 2010
CONSUMER BEHAVIOR WITHIN QUICK-SERVICE RESTAURANTS
Key points
Customers less adventuresome and go for value
Figure 51: Consumer behaviors within quick-service restaurant, by gender, May 2010
Figure 52: Consumer behaviors within quick-service restaurant, by age, May 2010
QUICK SERVICE SELECTION FACTORS
Key points
Wide range of factors determine selection
Figure 53: Reasons for selecting a quick-service restaurant, by age, May 2010
Figure 54: Would like to see more of at quick-service restaurants, by gender, May 2010
Figure 55: Would like to see more of at quick-service restaurants, by age, May 2010
Figure 56: Attitudes towards healthy dining at QSRs, by gender, May 2010
Figure 57: Attitudes towards healthy dining at QSRs, by household income, May 2010
IMPACT OF THE ECONOMY AND THE ROLE OF THE DOLLAR/VALUE MENU
Key points
A slim majority report no change in spending
Figure 58: Impact of the economy on quick-service restaurant usage, by gender, May 2010
Figure 59: Impact of the economy on quick-service restaurant usage, by household income, May 2010
Figure 60: Dollar/value menu usage, by age, May 2010
Figure 61: Dollar/value menu ordering behavior, by gender, May 2010
Figure 62: Dollar/value menu ordering behavior, by age, May 2010
QUICK SERVICE COMPARISONS TO FAST CASUAL
Key points
Dollar/value menu the strongest competitive tool
Figure 63: Quick service compared to fast casual, by household income, May 2010
Figure 64: Quick service compared to fast casual, by household income, May 2010
CLUSTER ANALYSIS
Economizing enthusiasts
Characteristics
Opportunity
Convenient Health Seekers
Characteristics
Opportunity
Infrequent, Unmotivated, and Uninterested
Characteristics
Opportunity
Characteristic tables
Figure 65: QSR clusters, May 2010
Figure 66: Quick service daypart usage, by QSR clusters, May 2010
Figure 67: Reasons for selecting a quick-service restaurant, by QSR clusters, May 2010
Figure 68: Would like to see more of at quick-service restaurants, by QSR clusters, May 2010
Figure 69: Impact of the economy on quick-service restaurant usage, by QSR clusters, May 2010
Figure 70: Dollar/value menu usage, by QSR clusters, May 2010
Figure 71: Attitudes towards and behaviors at QSRs, by QSR clusters, May 2010
Demographic tables
Figure 72: QSR clusters, by gender, May 2010
Figure 73: QSR clusters, by age, May 2010
Figure 74: QSR clusters, by household income, May 2010
Figure 75: QSR clusters, by race, May 2010
Figure 76: QSR clusters, by Hispanic origin, May 2010
Cluster methodology
CUSTOM GROUPS: LIGHT, MEDIUM AND HEAVY USERS
Figure 77: Would like to see more of at quick-service restaurants, by usage, May 2010
Figure 78: Dollar/value menu usage, by usage, May 2010
Figure 79: Dollar/value menu ordering behavior, by usage, May 2010
Figure 80: Quick service compared to fast casual, by usage, May 2010
Figure 81: Quick service compared to fast casual, by usage, May 2010
APPENDIX: TRADE ASSOCIATIONS