Study: QSR and Fast Casual only restaurant segments to see traffic growth in '17

Jan. 3, 2017

If there's a bright spot in the restaurant industry outlook for the year ahead, at least one data analysis and research company believes it will be in the limited-service restaurant category that includes QSR and fast casual, which NPD Group said will  counter the overall restaurant industry's predicted growth stagnation in the year.

NPD Group said that although traffic growth will stall in the year ahead for restaurateurs nationwide, with full-service faring the worst, limited-service chains show an estimated 1 percent rate of growth in overall traffic. That's slightly better than the flat growth for that total business sector in 2016, and far better than the anticipated loss of 2 percent of business for full-service restaurants in 2017. 

"Restaurant operators are in a position to alter the current forecast, but will need to differentiate themselves from the competition," NPD Group's restaurant industry analyst, Bonnie Riggs, said in a news release. "In the year ahead, it will be critical for them to stay relevant in consumers' minds, focusing on innovative products, unique promotions, competitive pricing, stating the benefits of eating at restaurants vs. home, and delivering an enjoyable experience."
So aside from that critical duty of differentiation cited as an industry necessity by so many analysts in the year ahead, NPD Group also said that the most successful restaurants in 2017 will also pay attention to these trends:

  • Millennials and Gen Zs rule:The influence of these two younger groups of consumers continues as strongly as ever, forcing innovations in creating experiences that are new and unusual while eating out.  
  • It's their way or the highway: Customization is king for customers today when dining out. That means those who fare best will be those who provide choices in technology, gastronomy and delivery.
  • Go home: The trend of eating more meals at home continues, so industry winners will be those who provide this as an option and make their offerings economically alluring. NPD says commodity prices are expected to continue to fall, so that may help restaurants in using menu pricing as a competitive strategy.
  • Mobilemania:Technology that makes it easy and quick to order and receive food will continue to drive the industry as successful chains make getting great food easier and more expedient than ever. 
  • How do I deliver to thee? Let me count the ways: Third-party delivery services, like Grubhub, Amazon, and DoorDash, are fighting it out for dominance, meaning mostly good things for restaurateurs and customers. 
  • Bringing outliers in with loyalty programs: There's a lot of untapped business out there, according to NPD. Successful chains will be those that cast their nets onto those untouched shores and reel in some new and loyal diners through innovative loyalty programs. 

Topics: Business Strategy and Profitability, Trends / Statistics

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