According to foot traffic behaviors, consumer tastes are changing and what was once touted as ‘the future of dining’ may soon not exist, writes GroundTruth’s Sarah Ohle.

For those unfamiliar, fast casual eateries are defined by slightly higher check sizes than fast food ($9, instead of $5 to 7), ample and inviting seating, and lack of table service. (Think Chipotle, Panera Bread and Boston Market.) The food is thought to be a step up for health-conscious diners and yet faster than a full sit-down establishment. Yet according to foot traffic behaviors, consumer tastes are changing and what was once touted as “the future of dining” may soon not exist.

Top reasons why the ‘fast casual’ category may not exist by next year:

Fast casual consumers are among the least loyal

With so many food options emerging, brand loyalty in the fast casual category is on the decline. According to consumer foot traffic data collected by GroundTruth, fast casual consumers are among the least loyal of restaurant-goers. In the first half of 2017, only 24 percent of fast casual customers went back to the same fast casual brand. That’s 22 percent lower than fast food customers.

As tastes shift, there are few barriers to keep diners from switching. Even some of the most longstanding and iconic fast food brands, such as McDonald’s, saw a small hit to their overall market share in the first half of the year as other players crowd the space and get more aggressive to stay in the game. Lower brand loyalty and plenty of options to explore could spell trouble for the category.

The line between fast casual and fast food is blurring

Fast casual and fast food offerings are converging. Fast casual chains are doubling down on the “fast” portion of their offering by adopting more automation, efficiency, and speed. Chipotle has added drive-through windows at select locations according to Fortune and Panera is adding ever more self-help kiosks for quick pick up and ordering.

Meanwhile, fast food chains are adopting more “casual” elements by investing more in interior design and offering upscale and healthier foods. Wendy’s team has been experimenting for some time with replacing their old carpets with tile and adding cocktail-style tables to encourage people to sit and stay. Taco Bell has launched redesigned concepts that include plush chairs, exposed rafter beams, and modern art. McDonald’s, Burger King, and Subway are all following suit in their own fashion.

On the cuisine front, fast food chains are now focusing on healthy, fancy and quick-style homemade food options. Consumers are increasingly being provided more upscale options, like lobster rolls at McDonald’s and even Wendy’s is now truffling its burgers and fries too. This convergence of menu items is perhaps intentionally confusing and consumers are having a harder time telling the difference.

Fast food & fast casual mergers might be on the horizon

If the end is truly near, will fast casual go out with a whimper or a bang? Most likely, it will happen with a handshake. We’ve seen plenty of traditional industries disrupted to keep up with changing customer demands, and a lot of unlikely partnerships occur as a result, with the most recent example being Amazon and Whole Foods. So why would the QSR industry be any different?

Data from GroundTruth reveals that fast casual customers are 16 percent more likely than the average consumer to visit a fast food restaurant. In fact, the affinity between certain fast casual and fast food spots is already quite pronounced, and GroundTruth has identified these brands as having a high overlap in customers:

  • Panera Bread and Chick-fil-A
  • Chipotle and In-and-Out Burger
  • Boston Market and Popeye’s

While overlap in customer demographic is not the only reason that investors and buyers are behind a merger, it can certainly be a driving force. As walls come down and the offerings merge, expect to see companies do so as well with an increase in acquisitions or mergers.

*Sarah Ohle is the VP of Marketing Insights, at GroundTruth.

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