Limited- Vs Full-Service Restaurants

Full-service restaurants (FSRs), otherwise known as “sit-down” or casual-dining restaurants, have long dominated the U.S. food-service landscape in terms of numbers. New research from Technomic shows that in …

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Full-service restaurants (FSRs), otherwise known as “sit-down” or casual-dining restaurants, have long dominated the U.S. food-service landscape in terms of numbers. New research from Technomic shows that in the last ten years the tide has shifted in favor of limited-service restaurants (LSRs) that have been able to grow enough to blur the line of fast-casual dining. LSRs have proven their ability to transition from unique street-food offerings to in-store entities that provide unique food offerings and ambiance to customers with more sophisticated tastes who are looking for something different. For more on this continue reading the following article from Blue MauMau.

Limited-service restaurants accounted for more than $200 billion, or half, of the total restaurant industry sales compared to full-service restaurants, despite their low check averages.  That’s according to one foodservice researcher, Technomic.

Ten years ago limited service restaurants (LSR) made up 47 percent of the total commercial foodservice industry, while full-service restaurants (FSRs) made up 53 percent. According to Technomic, the landscape has now reversed. LSRs account for 53 percent and FSRs 47 percent. Within the LSR segment fast-casual restaurants continue to gain market share while fast-food restaurants are working overtime to upscale their menu and concept positioning–not only to keep pace, but to compete directly with fast-casual leaders.

"The key to LSR growth is differentiation," says Executive Vice President Darren Tristano. "Many LSRs that have demonstrated growth have a broad consumer appeal, yet each has a discerned approach. Consumers are looking for fresh, better quality ingredients, a contemporary décor and ambiance, and interactive service formats to offer something unique and enhance the customer experience."

One of the trends it has observed is that rustic, handheld street foods with a global spin have helped LSR menu developers create unique and craveable offerings. Consumers are looking for new flavor supplements for their sophisticated palettes.

Fast-food patronage thrives on its convenience and value, while food distinction and ambiance are key factors driving patronage at fast-casual locations. Look for a blurring of the lines between fast-food and fast-casual restaurants, with operators in each subsegment tweaking their concepts with new unit designs and convenient service formats in order to remain competitive.

Technomic’s The Future of LSR: Fast-Foods & Fast-Casual Restaurants Consumer Trend Report also observes that 72 percent of consumers visit fast-food restaurants once a week or more, while only half (49 percent) visit fast-casual restaurants. It also says that consumers visit fast-food and fast-casual restaurants for lunch more often than for any other daypart; 21 percent purchase fast-food lunches at least twice a week and 19 percent visit fast-casual restaurants, largely due to time pressures.

This article was republished with permission from Blue MauMau.

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