Here’s How Fast Casual Excels During a Pandemic
Obviously, we know that during its time among us, the coronavirus has decimated lives and trashed—or seriously impacted—entire industries. Tourism, sports, supply chains, and restaurants have been nearly kaput for months. However, unsurprisingly there’s some very good news to be found in one segment of the restaurant business—fast casual.
But first, the bad news: due to the pandemic, the restaurant industry’s expected to lose $240 billion in sales during 2020, according to QSR magazine. Plus, Debby Soo, the new CEO of OpenTable, in a recent interview with CNBC, suggested that their restaurant partners were forced to permanently close 1-in-4 of their locations permanently.
This is unprecedented, but, the good news (especially if you’re involved in fast casual): the global fast casual restaurant market size is estimated to grow at a compound annual growth rate (CAGR) of 12%—with revenue in USD of $63.25 BILLION—during Marketwatch’s forecast period of 2020-2024. And that’s during the pandemic! Furthermore, the year-over-year growth rate for fast casual in 2020 is estimated at 10.67% by the end of 2024.
Things aren’t so rosy for full-service restaurants (they’re the ones where you sit down, get served, and pay after your dining experience). Restaurants like Outback Steakhouse, Bonefish Grill, P.F. Chang’s China Bistro, and Red Lobster, were sadly in no position to shift their business models when the pandemic struck, and dining rooms had to close.
It’s true that, during the pandemic, the fast casual sector has been down by 12%, but that’s nothing compared to what’s happened to the full-service sector: down by 37%.
How fast casual has been able to survive—even thrive—during coronavirus
If they’ve been nimble, innovative, and flexible enough to pivot in the face of the new norm, many brands are going gang-busters. Certainly not all fast casual brands have made it through with flying colors—but the agile, adaptable chains absolutely have. And here’s why: if a brand had strong, forward-thinking leadership, then they were able to accomodate:
Contactless digital ordering (online)
Curbside pickup
Relationships with third-party delivery platforms
Social media updates
“We’re open for curbside, delivery, or (currently) dine-in.”
“We’re sanitizing…”
“We’ve got sneeze guards.”
“We’re working to keep you safe.”
One of the great benefits for any fast casual brand is that digital transactions tend to bring in higher-than-average ticket sales. It’s a win for guests and businesses alike; you get your dinner without compromising safety, and the fast casual restaurant earns a bit more for helping you out.
Plus, during these strange days, online orders aren’t just for a couple of burritos, or a large pizza—people in lockdown have been feeding their entire family. That means the fast casual brand gets revenue from the sale of multiple meals on one ticket, while also saving money on packaging.
The Secret Sauce
Finally, there’s one more thing many fast casual brands can offer if they have the proper forward-thinking mindset: take-out alcohol. Growlers in some cases, or take-home margaritas, may just be the new normal in fast casual. These add-ons increase ticket sales and keep the customer very, very satisfied during these troubled times.