Fast-casual restaurants spur industry changes while fighting for turf
Posted: July 7, 2013 at 2:52 a.m.
A full-service and fastfood restaurant hybrid is expanding rapidly and changing what patrons experience when they dine out.
Fast-casual restaurants, such as Chipotle, Jimmy Johns, Panera Bread and Five Guys, provide food quickly for a premium price without a wait staff. Darren Tristano, executive vice president of Technomic, a Chicago-based food service consulting firm, said fast-casual restaurants have grown from $6 billionin sales in 2003 to an expected $31 billion in sales this year.
Tristano said the growth among fast-casual restaurants, compared with stagnant full-service and fastfood restaurant sales, has many restaurateurs re-evaluating their strategy.
“It’s not that they’re just trying to compete; they have to compete in this lowgrowth market,” he said. “Fast-casual provides high value, convenience and a better fit for what consumers are looking for.”
Still, Tristano said, full-service and fast-food restaurants that emphasize quick service and value do well.
The Big Orange restaurant at 17809 Chenal Parkway was the top-grossing independent restaurant in Little Rock in 2012, according to a report from the Little Rock Convention and Visitors Bureau. Proprietor Scott McGehee said affordable prices, a unique atmosphere and quick service made the restaurant a success.
It was such a success - with $2.6 million in taxable revenue in 2012 - that proprietors McGehee, John Beachboard and Herren Hickingbotham decided to open a second restaurant in Midtown, next to Cantina Laredo in the Midtowne shopping center.
The owners hope the new location will reach a sweet spot in the restaurant business when it opens around July 15.
“Fast-casual was a real hot word 10 years ago,” said proprietor McGehee. “It grew rapidly, but I think there has been a move back to just casual dining.”
Like the original Big Orange, the new restaurant is a sit-down, full-service restaurant with a typical meal costing around $11. Though the atmosphere is casual and service is fast - it shouldn’t take longer than around 10 minutes for someone to receive food after ordering - upscale features were added to draw a diverse mix of restaurant-goers.
“We don’t dress ourselves up as fine dining, but I think we try to promote that kind of experience, if people want that,” said Lee Edwards, beverage director. “They didn’t just get this off the back of a magazine. There was a lot of thought that went into everything in here.”
To stock the restaurant, around 4,000 buns will be ordered weekly from Arkansas Fresh Bakery. Beef will come from Creekstone Farms in Arkansas City, Kan. Beachboard said the cattle are hormone free and humanely treated - similar to meat served at Panera Bread and Chipotle.
When completed, the new burger joint will feature a turntable, a 1965 Sputnik-inspired light fixture and a contemporary design with touches of wood reclaimed from demolished barns.
“I try to design spaces around the food,” said Amber Brewer, brand director. “I think the people who like us enjoy the details.”
In addition to Big Orange, McGehee, Beachboard and Hickingbotham own ZaZa, a fast-casual restaurant specializing in salads and pizza, and the partners and Ben Brainard own Local Lime, a full-service Mexican restaurant.
“Some restaurants try too hard to be fast-casual when they shouldn’t be, because the style of food just doesn’t really work,” McGehee said. “We love fast casual - ZaZa’s has worked great - but people in Little Rock like to sit down and be served.”
Restaurants across the fast-food restaurant spectrum have found success leveraging value and introducing new products.
John Spenst, owner and operator of the Chick-Fil-A at 6201 W. Markham St., said the franchise is positioned to compete but hasn’t forgotten what its core product is.
“We have come to a place where we have embraced that we’re a fast-food restaurant, but we brand ourselves as a premium fast-food restaurant,” he said. “Two-thirds of our business is through the drive-through. That’s the place we really own.”
With a Panera Bread restaurant opening behind the Chick-Fil-A in nine months, Spenst said he thinks that many doctors from the neighboring St. Vincent Infirmary Medical Center will choose to go there for quick meetings.
Still, he says he’s confident that Chick-Fil-A will continue to attract both doctors and value-seekers. When a nearby McDonald’s opened in 2012, Spenst said the dollar menu - which Chick-Fil-A does not offer - did not lure many customers away.He said updated salads with romaine lettuce, fruit and almonds should stand up to Panera Bread’s offerings.
“We really serve a wide variety of people,” Spenst said.
McDonald’s discontinued its Angus burgers, fruit-and-walnut salad, and chicken selects this year. It added premium chicken McWraps, quarter-pounder burgers with different toppings, egg whites and whole-grain muffins to its menu.
Tristano said the menu changes are a reflection of what customers expect of McDonalds.
“It’s not the restaurant that decides what to sell, it’s the consumer that tells the restaurant,” he said. “When consumers look at McDonald’s, they see value, convenience and consistency. The words they don’t usually see are ‘premium’ and ‘better quality.’”
Despite the changes, fastcasual restaurant operators say their broad appeal is hard to compete with.
“We have our corporate people in suits and ties who want to eat lunch and big families with kids that come in at night,” said Brittney Washington, kitchen manager at Chipotle, 11525 Cantrell Road. “They want food fast, they want to be in and out, but they want healthy food.”
Business, Pages 63 on 07/07/2013