Full-Service Restaurants Face Fast-Casual Competition

Canadian full-service restaurants—family-style, traditional casual-dining and upscale casual-dining restaurants—face increasing competition as other parts of the foodservice industry are meeting consumers’ changing needs and expectations.

Technomic’s 2015 Canadian Future of FSR: Family & Casual Dining Consumer Trend Report investigates which segments are stealing share of stomach by asking consumers to consider alternatives to full-service occasions. The results indicate that family-style and traditional casual-dining restaurants are not immune to the effects of a growing fast-casual segment, while upscale and traditional casual-dining restaurants compete for special occasions.

Family-style and traditional casual-dining restaurants both offer consumers relatively affordable dine-out experiences that are well-suited to everyday meals. However, consumer data shows that limited-service restaurants are the leading alternatives to full-service visits, even though family-style and traditional casual-dining restaurants appear to be competing for the same occasions. Limited-service restaurants may not offer the full-service experience, but they compete strongly on price, convenience and kid-friendliness. And a less-expensive occasion is likely a key motivation in this trade down; lower disposable income is the top reason for reduced visits to family-style and traditional casual-dining concepts.

Fast-casual restaurants, in particular, are gaining ground and are highly appealing to young consumers—a key demographic. At least three out of 10 18- to 34-year-olds say fast casuals are a leading alternative to family-style (30%) and traditional casual-dining (34%) restaurants. Additionally, 36% of Super Heavy Family-Style Users say fast casuals were a top alternative to their most recent family-style occasion. Consumers may be willing to trade in their full-service experience not only for fast casuals’ convenience and affordable price, but also for their emphasis on unique, higher-quality ingredients.


Base:  333 (family style), 334 (traditional CD), 333 (upscale CD) consumers aged 18+ who visit these restaurants
Source: Technomic Inc. Canadian Future of FSR: Family & Casual Dining Consumer Trend Report

Upscale casual-dining restaurants, with their pricier menus and adult-focused atmospheres, do not face the same competition from limited-service restaurants. Consumers look to upscale casual dining for celebrations and special meals. Struggling traditional casual-dining concepts could benefit from gaining ground on serving these special occasions. But rather than compete with upscale casual dining for adult-only celebrations, traditional casual dining may benefit from positioning itself as a lower priced, kid-friendly option for family celebrations.

Faced with continued competition from lower-priced, yet high-quality entrants, full-service restaurants will need to leverage their strengths to retain share of stomach. Emphasizing the value of their high-quality food and ingredients, good service and enjoyable ambiance may give full-service restaurants the edge they need to effectively compete.


Maia Chang

Maia Chang is a Research Analyst at Technomic, Inc. in Chicago. She works on the firm’s Consumer Trend Reports, a series of annual studies that provides operators and suppliers with a comprehensive guide to the menu and consumer trends impacting various restaurant segments and menu categories in the U.S., Canada and U.K.

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