A new trend, fast-casual dining, a hybrid of fastfood and restaurant culture has crossed the Atlantic to take the UK by storm. Fresher and healthier than conventional fastfood, cheaper than full-service and flexible on price, it looks like fast-casual is here to stay. Andrew Don reports.
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Eating out in the UK has become increasingly casual as consumers eat more often but spend less. Mintel estimates that between 1998 and 2002, the eating out market grew by 22% to reach £24.4m (US$38.6m), or nearer 5% in real terms.
Its Eating Out Review, published earlier this summer, found that allied with the end of the love affair with traditional fastfood, such as burgers, a trend towards what has been coined fast-casual dining has arisen. It describes this as a style somewhere between fastfood and restaurant dining, combining the advantages of both.
Pat Aston, leisure editor, says: “The growing sophistication of consumers’ tastes means that they enjoy the restaurant experience of being seated and waited on but do not necessarily want to sustain the lengthy waits that this can involve. Hence the success of formulas that offer a restaurant experience with fastfood.”
Speed, taste and value
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By GlobalDataA new report from hospitality and leisure intelligence company Martin Information (MI), which follows the rise of this concept from the US to the UK, says a desire for great tasting food, on demand and without a hit on the bank balance, is what is driving this latest trend.
In the US, the sector has grown directly out of the fastfood, or quick service, restaurant culture, whereas in the UK, the term is being used more broadly to label concepts with roots in a variety of catering sub-sectors from pubs to sandwich chains.
Combine the core attributes of fastfood, value, convenience and speed, with the quality and style of more upmarket full-service restaurants, and hey presto, you have the UK’s own version of fast-casual says MI’s report Fast Casual – The new direction for eating out.
Fresher than fastfood
Technomic, the US management consultants, says fast-casual is “more expensive and fresher than fastfood; casual dining that is not full service.” So it falls somewhere in the middle between a fastfood outlet, a sandwich shop and a more formal restaurant, according to its definition.
Bobby Hashemi, founder and chairman of Coffee Republic, is the latest to take advantage of this niche, having seen off bid approaches from rivals Caffe Nero and Benjys. He plans to convert existing outlets to Republic Deli to take advantage of fast-casual dining, with the emphasis on a menu offering New York deli-style sandwiches, bagels and paninis.
Hashemi is following a path already trodden by relative newcomer Fratelli, a joint venture group set up by Toni Mascolo, head of the Toni & Guy hairdressing empire, and Antonio Motisi, founder of Café Nero, combining upmarket Italian deli-fare ordered at the counter with high-quality coffee, served in a casual coffee-bar-style atmosphere.
Fratelli’s niche is that it also combines an element of retail selling everything from the best quality pasta to herbs and spices and olive oils. Three have opened so far and another 30 are planned over the next two years.
Examples in the US include Panera bread, Baja Fresh and Chipotle. The market there has a tight definition incorporating core fastfood elements of counter service and a takeaway or eat in option in a stylish and comfortable environment.
Peter Martin, founder and editor-in-chief of MI, says it could be argued that the only chain of any real scale to fall within these criteria in the UK is Nando’s, the peri-peri chicken group.
Sushi bars leading the way in the UK
“In the UK, the market is more interested in how the fundamental attributes of fast-casual are being adopted by operators, and perhaps most importantly, how the expectations of the time-starved, quality-demanding consumers are shaping the marketplace,” he says.
Those core factors are quality, convenience, environment, speed and, most importantly, value – a function not only of price, but of quality and convenience. Martin sees the trend towards fast-casual dining as “an extension of how people eat at home.”
MI says Wagamama, the noodle bar group, and Yo! Sushi, the conveyor-belt sushi bar chain, share many fast-casual attributes and would, using a more elastic UK definition, fall into the category because they have quality, convenience, speed and style and a flexibility in offering, particularly in price, enabling customers to get away with spending £10-£15 a head if they so wish.
US market to hit $35bn by 2010
The US fast-casual sector will be worth US$35bn a year by 2010, according to business consultancy McKinsey.
MI explains how the fastfood majors have dipped their toe into fast-casual waters such as McDonald’s with Chipotle Mexican Grill and Wendy’s with Baja Fresh, both fast-casual burrito businesses. McDonald’s has also bought into Pret a Manger.
Only this February Jack in the Box became the latest big US burger chain to buy its way into the Mexican fast-causal category, with the $45m acquisition of Qdoba Restaurants, based in Denver.
Martin says: “The challenge for the eating-out industry is how to provide wider choice and better quality at a profit. Counter service and ‘oasis tables’, where customers can add their own extras, can help keep staff costs down. But fresh food and stylish interiors come at a price.”
The names to look out for…
MI says concepts to watch in this sector in the UK include Degustibus, Fresh & Wild, Fresh Italy, Gourmet Bruger and Shere Khan.
Martin says fast-casual concepts will expand within the UK but the big question is whether many of the still-fledgling businesses can grow effectively on their own, or will have to attract the attentions of bigger players looking for new ideas.
“Ironically, the speed of fast-casual’s move into market ascendancy may depend on the rate of decline of the sector that helped nurture it in the US – fastfood.”
The pressures of the health lobby on fastfood culture may see it soon reaching a tipping point and devouring fastfood may, in the not too distant future, become socially unacceptable.
“If that day does come, its healthier, fresher offspring, fast-casual, may quickly move to become the industry standard,” says Martin.
