by Christopher Kane (3 min)
First let’s start with what is a fast causal restaurant? A fast casual restaurant can be defined as an “establishment with a limited-service or self-service format, check averages above $9, food prepared to order, fresh ingredients, innovative food suited to sophisticated tastes, and upscale interior design.”[i] Restaurants like Chipotle, Panera Bread, Shake Shack, Qdoba, and Smashburger all fall into this industry.
In the early to mid 1990’s the fast causal restaurant model gained some popularity in the U.S., however, it did not enter the mainstream until the late 2000’s and early 2010’s. A combination of their fresh, high quality food, contemporary décor, and social consciousness hit the right cord with their target market. This has led to the industry growing consistently in the double-digits for almost 20 years, and has caused individual restaurants to grow at astounding paces. The approximately 40 billion-dollar fast casual restaurant industry is expected to continue its double-digit growth until at least 2022, with increased sales, the expansion of existing restaurants and the creation of new ones.[ii]
One of the key reasons the fast casual industry continues to outperform its peers is that it has historically been quicker than others [in the general restaurant industry] to accept new technology. Fast casual restaurants were among the earlier adopters of many of the new mobile and in-store advancements of the late 2000’s and early 2010’s. This has allowed them to make the customer experience more fluid and quick while enabling them to service more people. Adopting these technologies earlier than others earned them a temporary competitive advantage. However, currently many other industries have caught up and many of the new technologies of the early 2010’s are now archaic. Today, the technology and consumer expectations have advanced quicker than most restaurants can adapt. According to Richard Slawsky of FastCasual.com:
“While restaurants are more rapidly starting to adopt various forms of consumer-facing technology, a gap remains between what consumers want and what restaurants currently offer. That gap is beginning to narrow and will further close over the next several years as restaurant technology evolves and more options enter the marketplace.”
With many new fast casual restaurants popping up seemingly almost weekly, competition in the industry is becoming fierce. There is currently an opportunity to capitalize on the technology arbitrage between what is being offered and what consumers, particularly Millennials, actually want. The restaurants that successfully execute on this will find themselves ahead of the pack in years to come.