A Look Back on the Year in Fast Casual

It has been some 15 years since Panera Bread and Chipotle emerged as leaders of the next wave of fast-casual development, but 2013 still will go down as a milestone year for the fast-casual restaurant sector.

Among the highlights were the initial public offerings for two well-established fast-casual brands, Broomfield, CO-based Noodles & Company and Chicago-based Potbelly Sandwich Shop. (Last month, the chains reported third-quarter same-store sales increases of 2.4% and 2.5%, respectively.) The IPOs served to focus national media attention not just on the brands themselves but on the still growing-like-gangbusters fast-casual segment.

McAlister’s Deli, Corner Bakery Café and Smashburger were among the chains seeking nationwide expansion in 2013. This week, Alpharetta, GA-based McAlister’s disclosed plans to move into New Jersey, via seven new franchised units. Corner Bakery announced last month it had signed franchise agreements to expand into Wisconsin and add new units in Arizona, in line with the brand’s goal to “more than double” its current 150-unit footprint in the next three to four years. And Denver-based Smashburger this month debuted in Bethesda, MD, and suburban Boston after announcing franchise agreements in November that will take the better-burger chain into Oakland, CA, and Orlando, FL.

Other chains appearing on Technomic’s 2013 list of the Top 150 Fast Casual Chain Restaurants took their expansion push global. Five Guys Burgers and Fries and Shake Shack both opened units in London, and Jake’s Wayback Burgers signed a deal to open 30 stores in Argentina—giving the chain a presence in 29 countries.

For rising brands such as Dallas-based Pie Five Pizza Co., the quest to become “the Chipotle of (fill in the blank)” helped drive expansion, too. Just last week, Pie Five—owned by Pizza Inn Holdings Inc.—announced it had inked a franchise deal for more than three dozen new stores in and around Washington, DC. The 18-unit concept has more than 150 franchise stores in development as far west as Utah to and as far east as Maryland, Pizza Marketplace recently reported.

We’ll be eager to dig into full-year 2013 sales and unit data for our 2014 Top 150 Fast Casual report—the top 150 concepts posted aggregate sales of nearly $26 billion last year, up 13.1% from 2011—but in the meantime, it’s clear that the fast-casual segment maintains its strong momentum. Pizza, Mediterranean and Asian-menu concepts are poised for significant growth in 2014, and we look forward to following the latest news and developments across the sector.

Below, just for fun, are eight fast-casual numbers and stats we found particularly interesting this year:

$7–$7.60: The sweet-spot price range for a fast-casual lunch, according to consumers polled this year for Technomic’s Value and Pricing Consumer Trend Report. Consumers identified $7 as their “optimal” (good value) price point, and $7.60 as the price at which a fast-casual lunch starts to become expensive.

$7.50: The average price, as of Q3 2013, of a specialty burger at fast-casual restaurants in Technomic’s MenuMonitor database. The average price of a regular hamburger is $5.37.

30%: Share of fast-casual consumers polled this year through Technomic’s Consumer Brand Metrics program who say delivery availability is an important attribute in their selection of a fast-casual restaurant.

$108.8 million: Potbelly Corp.’s net proceeds from its IPO (shares were intially priced at $14). Net proceeds for Noodles & Company’s IPO were $100.2 million (shares initially priced at $18).

30th: Birthday that Panda Express celebrated in 2013—a reminder that the fast-casual segment is no spring chicken (or panda). Fuddruckers, one of the pioneering purveyors of limited-service better burgers, turned 33.

50%: Share of fast-casual consumers who said poor food/beverage quality would be the issue most likely to keep them from returning to a particular fast-casual restaurant. Twenty percent said the same for high prices.

4: Number of flavor varieties in Panera’s new Single-Serve Coffee Cups line. The coffees, which debuted in November and are available from select retailers, are available in Dark Roast, Light Roast, Colombia and Hazelnut Crème.

1: Number of current locations of Pizzeria Locale, the Denver-based fast-casual pizza concept that has Chipotle Mexican Grill’s backing. The burrito behemoth’s partnership with Pizzeria Locale, which opened in May and is based on a Denver full-service restaurant of the same name, was revealed on Wednesday and reported in the Wall Street Journal.


Darren Tristano

Darren Tristano is President of Technomic Inc. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations.

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