We already know that fast-casual chains’ sales growth outpaces that of its industry counterparts, but data taken from Technomic’s recently published Value & Pricing Consumer Trend Report along with the 2014 Lunch Consumer Trend Report suggests there may be one daypart where these chains can do even better: lunch.
The Value & Pricing Consumer Trend Report shows us that while 52% of consumers say they are very satisfied with the value for their money spent at fast-food restaurants, slightly fewer (49%) say the same for fast-casual restaurants. Further, while satisfaction with value at each type of restaurant has slightly decreased from 2013, it has increased for retailer prepared foods; 46% say they are very satisfied with value at grocery stores.
The report also finds that the optimal lunch meal price at fast casuals—the price at which a consumer believes the meal is a bargain—is $7.44. This includes an entrée, side and beverage. However, Technomic’s MenuMonitor data shows that a fast-casual lunch entrée alone averages $7.53, while a fast-casual lunch combo meal averages $12.52.
This information helps put the 2014 Lunch Consumer Trend Report into context, which revealed that 87% of consumers purchase lunch from fast-food restaurants at least once a month, compared to only 63% who purchase lunch from fast casuals as often. In addition, 23% of consumers say they are visiting fast-food restaurants for lunch more often compared to two years ago, while only 13% of consumers say the same for fast-casual restaurants; in fact, 32% of consumers actually say they are visiting fast casuals for lunch less often than they were two years ago.
While cost only makes up 30% of the value equation at fast casuals, it could be that this part of the equation is precisely what is discouraging price-sensitive consumers from more frequent fast-casual lunch visits. These occasions are instead going to lower-priced fast-food brands and retailer prepared-food areas.
This competition underscores the importance of fast-casual chains’ ability to strengthen the value message at lunch. Some fast casuals are already achieving this through combo meals. For example, Urban Bar-B-Que Company introduced a lunch combo deal this month. From 11 a.m. to 3 p.m., customers can purchase select entrées with a fountain drink and a side for $7.99. Similarly, Good Stuff Eatery menus The Lunch Bag combo at most locations, offering a Farmhouse cheeseburger, fries and a fountain soda for a discounted price for lunch Monday through Friday.
Delivery service is another emerging opportunity allowing fast casuals to compete for value at lunchtime, particularly via delivery in dense urban markets to the local business population. Offering convenient delivery service during lunch, a highly time-pressed daypart, will likely directly equate to boosted sales for participating chains. Sopraffina Marketcaffe, &pizza and ’wichcraft are just a few of the fast-casual chains that have recently launched a lunch delivery service or promotion.