Fast food, fine dining and even street food are easy to find throughout the UK, but the food service industry has now developed a new style of restaurant that has been dubbed ‘fast casual’. This niche dining experience combines fast food-style service with a theme and decor more likely to be associated with a full-service restaurant.
Sometimes called ‘adult fast food,’ this kind of cuisine appeals to couples on a night out as well as those with families – and it is growing. A new report paints a healthy picture of the fortunes of Mexican-themed Tortilla and Italian-style Vapiano, despite the number of out-of-home meals and snacks consumed last year dropping by 90 million.
These kinds of restaurants, which typically offer a short menu, outperformed the industry average by achieving sales growth of 2.5 per cent for the year to the end of March 2012, according to a study by NPD Group, seen exclusively by Marketing Week.
Providing what the report calls ‘a safe culinary adventure’, these restaurants benefit from the same streamlined process that make fast food operations so efficient and profitable, along with a greater degree of customisation and a slower dining pace. It is the customers’ choice whether to have a quick meal with one drink, or linger over desserts.
The fast casual chains are affordable, but tend to offer a higher degree of local sourcing and food tracking than their larger and more conventional fast food rivals, or than many more traditional full-service chains.
“Fast casual has a lot going for it. It ticks a lot of boxes in terms of how we are eating out at the moment,” says NPD Group foodservice director Guy Fielding. “The customers obviously think it is worthwhile and good value for money. It is about value rather than just price.”
Family visits make up a large serving of their business and fast casual outlets are extremely popular for those taking their children out for a family meal, adds Fielding.
Nearly a third of visitors say they choose a fast casual outlet because their children like it, and the research finds that 46 per cent of all visits were family occasions, or adults visiting with children. Pubs score 31 per cent on the same measure, with full service casual dining scoring 40 per cent and quick service fast food 34 per cent.
As well as those taking their pre-teens for a quesadilla, fast casual dining is popular with another demographic too. Young adults are among those who have been hit hardest by economic difficulties, with NPD Group data suggesting those aged 18 to 24 have cut back on restaurant expenditure faster than any other age-range since 2009. However, they frequent fast casual restaurants in greater numbers than they go to pub chains or other food rivals.
Consumers aged under 24 make up about a fifth of people who dine at these eateries, with the more informal atmosphere and keen value for money appealing to them. The largest segment of customers, accounting for nearly half of fast casual customers, are aged 25 to 49 years old. This age group makes up 39 per cent of people eating at pubs and 43 per cent of those going to full-service restaurants.
A mean average spend of around £9 per head shows that value for money has a big role to play too, comparing with just over £11 spent in full-service chains like Strada or Giraffe, £8 in the pub and £3.50 at fast food outlets.
Mostly eschewing TV ads, these young restaurant brands also engage in a lot of social media activity, supplemented by local press ads and coupon campaigns to get customers through their doors.
This marketing is tempting people back in for more, says Fielding. “The repeat intensity is very high as well – 68 per cent of people going to this type of outlet will revisit. That is far higher than a typical pub or full-service restaurant.”
Fast casual’s growth is primarily at the expense of “tired” pub brands, according to Fielding. “Pubs and pub food grew substantially eight to 10 years ago, at the expense of full service restaurants.
“They were branding themselves and you were able to take kids in. Some of the chains are still doing reasonably well, and JD Wetherspoon is probably still the best performing. But I think you go to some pubs and the offering feels tired.”
The fast casual sector seems to have energy to spare. New chains are springing up on a regular basis, with innovation in London seeming to drive the pace.
Single branch restaurants are expanding rapidly into chains that are gaining a loyal following. While they do not remain exclusively in the capital, London’s affluent and fast-moving population helps them gain a foothold.
Restaurants such as Byron Burger and Burger & Lobster – which has a choice of two items on the menu, each costing £20 – have gained rave reviews.
Novelty and value are certainly two key elements of the appeal of these new chains but established operators expect this trend to carry on when the economy finally recovers. Indeed, some of them may enter the sector themselves. So whether it’s a quick burger, pasta followed by an Italian dessert or a feast of tortillas, the public certainly has an appetite for fast casual dining and it appears to be here to stay.
Brands to watch
Premium Burger chains are an increasingly familiar sight in the UK: Gourmet Burger Kitchen, Honest Burger and Fine Burger Company are just three examples. NPD Group reports that US chains including Five Guys Burgers and Fries are showing an interest in the UK market, while Meat Liquor (pictured) is an example of a popular restaurant that started out as a burger van. According to Mintel, fast casual chains in the US achieved growth of 35 per cent between 2006 and 2011.
Mexican chains such as Tortilla, and imports including Chipotle Mexican Grill are popular and concepts such as the Italian-themed Vapiano are gaining traction. In volume terms chicken chain Nandos, positioned at the lower end of the price scale for fast casual dining, is leading the way. Any ethnic food style is deemed ripe for a short menu, fast casual dining experience.
We ask marketers on the frontline whether our ‘trends’ research matches their experience on the ground.
Tragus Group (owner of Strada and Café Rouge)
Fast casual dining has taken the industry by storm in terms of very simple pop-up operations. Some of them are literally starting out of the back of a van in London’s Soho and then really taking off when a unit becomes available, and the quality is fantastic. They have very short, simple menus with hardly anything on them. But as a result of that, you get the speed of service and the prices are incredibly competitive.
It is ‘bombshell branding’ at its best, as you know exactly what you are going to get. And customers like that. Particularly in London there is that sense of momentum and it being something different.
It is much edgier as a dining out market than if you went to even somewhere like Manchester – quite a funky town – where they are still looking more for chain restaurants. I think it will be a good few years before the concept graduates far out of central London.
The propensity to dine on a deal is still very strong. And that outside-London crowd are much more voucher-led, and therefore using their smartphones to download a deal to take into a restaurant that can be more aspirational.
When we have a promotional offer running in the north, more customers visit our restaurants because we are seen as affordable and aspirational to a younger audience that perhaps didn’t feel they could afford to eat in Strada or Café Rouge.
I think these new types of restaurants are doing brilliantly at getting people interested in food, and actually wanting to dine out. And that has got to be good for the sector as a whole.
Co-founder and marketing director
Some of the [fast casual brands] are becoming more familiar and I think pop-ups are a great idea. Competition is healthy and choice is always good.
I am always positive because you have to be, but [in these market conditions] you have to work harder at it. I feel like I have never worked harder in my life, because you really have to show leadership now from the top.
I have to make sure our marketing is very good and very clever, and reward our customers. But that does not mean throwing out two-for-one vouchers all over the place because that devalues the brand.
Doing well is about looking at your menu, doing good value meal deals that will reward the people who come regularly – we have a £5 breakfast, a cheap lunch deal and a £9.95 dinner deal.
I am very anti-voucher, but when the recession hit, everybody did it. People would wait for the vouchers and wouldn’t go back until they got one. You have to give them good value for money and make it affordable for them, so they will come back.
We do a lot of digital marketing, using Twitter and Facebook. It has come a long way and I think we need to do a bit more with it. We are always looking at fresh new campaigns, reviving menus, changing the dishes. Then it becomes word of mouth, and you can’t get better press than that.
We’ve tweaked a few things to make Giraffe more attractive. Our kids’ meal deal only used to run Monday to Friday and we are now incorporating it into weekends. At places like the Trafford Centre in Manchester, every other restaurant has a kids’ meal deal at the weekend. And if we want to attract those families, we have to compete with that.