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Fast-paced technology changes highlighted in annual Fast Casual State of the Industry report

Restaurant operators are paying their employees more now than they were last year.

October 17, 2014 by Alicia Kelso — Editor, QSRWeb.com

The Fast Casual State of the Industry 2015 was published this week, providing an overview of the rapidly growing segment from the perspective of more than 300 operators in the trenches.

This year’s survey proved to be particularly intriguing as the fast casual segment not only continues to grow year over year (up 8 percent in 2013, representing the only growth segment in the industry), but it has also been siphoning market share from other segments and inspiring longtime concepts to redefine their business models.

What makes this gold nugget shine? Many agree that fast casual has found the proverbial sweet spot – a low price point, convenience-driven business model, high quality food and fast service. 

Still, because the segment itself is relatively new compared to its industry counterparts, many operators continue to fight tooth and nail for spendthrift consumers, still weary from the Great Recession. To continue its pace, fast casual operators must be mindful of emerging trends that affect the entire industry. This year, those trends have been crystal clear:

• Technologies are moving too fast to ignore, and too fast to make a hasty decision on how to apply it to your business;
• The workforce is changing and labor costs will continue to rise;
• Food costs are a concern;
• The restaurant industry – from fine dining to fast casual to c-stores and retail – is more competitive than ever, and the lines between them are blurring;
• Consumers are driving this train, and they want good food quickly and conveniently.

Our new report indicates some major changes in response to these issues. For example, the number of concepts that now offer curbside/takeout services is nearly 40 percent, from about 23 percent just four years ago. Not only does this underscore a demand for convenience, but it also showcases how much technology has influenced business models in a short amount of time.

Also, last year, we didn’t even ask our survey respondents if they offered mobile ordering. This year, 27.3 percent confirmed they do.

And, as nationwide minimum wage protests and President Obama’s backing have accelerated a movement toward higher pay, many operators have increased their pay base. In 2011, most fast casual operators said they paid an hour employee wage of $7.25 to $8 (34 percent) or $8.01 to $9 (also 34 percent).

This year, a majority of operators paid $9.01 to $10 (27.4 percent), while an equal number paid $8.01 to $9 and $10.01 to $12 (24.7 percent).

In one of many signs that we’re on more solid footing than in recent years, most operators said they’re significantly less worried about the economy than they were just two years ago. Their concerns have shifted to food and labor costs instead.

This year’s survey features a couple of takeaways – the fast casual segment continues to lead the industry in healthy, local, specialty menu innovations and is on the cusp of widespread digital adoption. These attributes will continue to appeal to the vast millennial demographic.

In other words, we can expect the segment’s growth and influence to accelerate even more.

Download a copy of this year's report here.

About Alicia Kelso

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