A still-growing niche dominated by such chains as Chipotle, Panera Bread and Baja Fresh, fast-casual establishments are generating $20 billion a year in sales, according to the Fast Casual Alliance.
The industry experienced 11 percent growth in sales last year and is expecting a growth rate of more than 10 percent this year, said Paul Barron, chairman of the Fast Casual Alliance.
The pricing issues for such restaurants are made all the more challenging because of aggressive discounting by full-service, casual-dining chains, such as Chili's and Applebee's.
"This segment of the industry has benefited from consumers trading down from casual dining and so they haven't felt as much of a need to discount," said Bob Goldin, executive vice president at food industry research firm Technomic. "By and large, the quality is better than traditional fast food, but when everyone is discounting, I think there will be a lot of pressure on the players to discount."
