News
Fast casual segment capable of sustaining growth
August 24, 2008
LOS ANGELES —The fast casual segment continues to be a strong force in the restaurant industry, saidPaul Barron, chairman of the Fast Casual Executive Alliance and publisher of Fast Casual magazine. Barron was part of a panel of industry experts presenting The Fast Casual Phenomenon at the Western Foodservice & Hospitality Expo inLos Angeles.
Barron told the audience of operators that consumer awareness of the differentiation of fast casual from quick-serve has grown to 78 percent.
Panelist Larry Rusinko, senior vice president of marketing and development for Rubio's Fresh Mexican Grill, said that customers now expect a better experience from the fast casual segment and operators must continue to "take it forward."
Louis Basile, chief executive officer and founder of Wildflower Bread Company and president of the fast casual alliance, said atmosphere is important but the culinary experience is what customers really come for. Therefore, operators need to "be passionate about food" and ensure its execution is done consistently well.
The fast casual segment is sustaining sales, even though overall, sales across the restaurant industry have been affected by the economy, Barron said. But the segment still has growth opportunities if operators understand and respond to their core demographic.
Basile warned operators not to cut quality in an effort to cut costs. Instead, they need to be innovative and committed to quality.
Rusinko also said it's more important than ever for concepts to differentiate themselves.
"The space is getting crowded," he said. "You have to stand out."
A question-and-answer period then followed the panel discussion. One operator, who was in the midst of opening a new single-store concept, expressed fear after hearing the panel's report. Basile stressed that his first location needs to be a great one and that having enough capital to protect against the worst-case scenario is also key.
Another operator asked how to determine the cost of a new menu item without hiring a consultant to determine its price.
Basile said that rather than following a scientific formula, operators are better off asking themselves what they would pay for the item.
"People who formulate prices take the human side out of it," he said.
Keeping the human side in the fast casual industry is important, the panel members agreed, so that concepts not only stand out but succeed.
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