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Quick Service Restaurants - US - May 2019

Covered in this report

This report covers industry trends, consumer attitudes, preferences, and behaviors surrounding QSRs.

For the purposes of this report, Mintel has used the following definition:

  • QSRs - Used interchangeably with “fast food,” QSRs specialize in inexpensive, convenient meals that are less expensive than those available at fast casuals. There is typically no waiter service and no alcoholic beverages. Examples include: McDonald’s, KFC, Taco Bell, Wendy’s, and Pizza Hut

"Mintel forecasts the LSR (limited service restaurant) segment to grow 4.4% compounded annually through 2023. This growth rate is driven somewhat by fast casual restaurants, whose growth outpaces their QSR (quick service restaurant) counterparts. However, QSRs still represent the grand majority of LSR sales, and fast casual growth has slowed somewhat in recent years. QSRs and fast casuals represent increasingly overlapping segments as they borrow service, menu, and operational efficiency ideas from each other."
- Jill Failla, Foodservice Analyst

This report will cover the following areas:

  • Fast casuals beat QSRs on quality, catch up on value
  • C-store threat exists for QSRs’ most loyal customer
  • QSRs face growing labor challenges
  • Natural fast food has wide and growing appeal
  • Consumers will pay more for premium meats
  • Appeal to young consumers with low-cost special diet options

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Fast casuals beat QSRs on quality, catch up on value
            • Figure 1: QSR competitive associations, February 2019
          • C-store threat exists for QSRs’ most loyal customer
            • Figure 2: QSR competitive associations, by Generation Z, February 2019
          • QSRs face growing labor challenges
            • The opportunities
              • Natural fast food has wide and growing appeal
                • Figure 3: QSR concept interest – natural food/beverages, by select demographics, February 2019
              • Consumers will pay more for premium meats
                • Figure 4: QSR price sensitivity, February 2019
              • Appeal to young consumers with low-cost special diet options
                • Figure 5: QSR concept interest, February 2019
              • What it means
              • The Market – What You Need to Know

                • LSR segment continues to grow, led by fast casual
                  • Labor challenges keep QSR execs up at night
                    • Convenience stores are a growing threat to QSRs
                    • Market Size and Forecast

                      • The LSR market will see stable growth over the next few years
                        • Figure 6: Total US revenues and fan chart forecast of limited service restaurants^, at current prices, 2013-23
                        • Figure 7: Total US sales and forecast of limited service restaurants^, at current prices, 2013-23
                    • Market Perspective

                      • Fast casual growth outpaces QSR
                        • Figure 8: Top 200 Limited Service Restaurants sales, by segment, 2016-2017
                      • Convenience stores level up their foodservice programs
                          • Figure 9: Slurpee display at 7-Eleven’s new test kitchen in Dallas, Texas, 2019
                      • Market Factors

                        • Labor wars rage on as unemployment rates sit at record lows
                          • Unemployment rates, increased competition, and a looming recession
                            • Figure 10: Unemployment and underemployment, January 2007-February 2019
                          • Minimum wage laws
                            • What does it all mean?
                            • Key Players – What You Need to Know

                              • Blurring segments mean quality improvements at QSRs
                                • QSRs are pioneers in tech
                                  • Organic is the future of fast food
                                  • QSR Sales and Traffic

                                    • Chick-fil-A is moving on up
                                        • Figure 11: Leading 10 QSRs among Top 200 chains, 2016-2017
                                      • Chick-fil-A becomes fourth-most visited QSR
                                        • Figure 12: Fast food restaurant visitation, any visit in past 30 days NET, fall 2013-18
                                    • What’s Working?

                                      • LSR segments are blurring
                                        • Plant-based menu innovations
                                          • Ordering and delivery technology
                                            • Figure 13: Jimmy John’s ad campaign takes aim at third-party delivery, 2019
                                        • What’s Struggling?

                                          • The LTO as we know it
                                            • Coffee wars rage on
                                            • What’s Next?

                                              • Organic and natural fast food
                                                  • Figure 14: Nic’s Organic Fast Food in Chicago, 2019
                                                • Special diet fare
                                                • The Consumer – What You Need to Know

                                                  • Generation Z is a key fast food demographic
                                                    • The importance of technology will grow at QSRs
                                                      • Natural ingredients are the future of fast food
                                                      • QSR Visitation & Visitation Drivers

                                                        • Nearly all consumers visit QSRs
                                                          • Figure 15: QSR visitation, February 2019
                                                        • Healthy options motivate more fast food visits than indulgent options
                                                          • Figure 16: QSR visitation drivers, February 2019
                                                        • Convenient location and healthy options would motivate four in five people to visit a QSR
                                                          • Figure 17: QSR visitation drivers, by TURF analysis, February 2019
                                                        • Women are especially motivated by healthy fast food options
                                                          • Figure 18: QSR visitation drivers, by gender, February 2019
                                                        • QSR tech amenities and social media posts resonate most with Gen Z
                                                          • Figure 19: QSR visitation drivers, by generation, February 2019
                                                      • QSR Loyalty

                                                        • Most consumers are loyal to a particular fast food restaurant
                                                          • Figure 20: QSR loyalty, February 2019
                                                        • Gen Z is the most loyal fast food consumer
                                                          • Figure 21: QSR loyalty, by generation, February 2019
                                                        • Lower income consumers are more loyal to QSRs
                                                          • Figure 22: QSR loyalty, by income, February 2019
                                                        • Convenience and value are the top reasons for loyalty to QSRs
                                                          • Figure 23: Reasons for QSR loyalty, February 2019
                                                        • But four in five are loyal because of convenience and high-quality food
                                                          • Figure 24: Reasons for QSR loyalty, by TURF analysis, February 2019
                                                        • Loyalty programs are most effective with Millennials
                                                          • Figure 25: Reasons for QSR loyalty, by generation, February 2019
                                                      • QSR Technology

                                                        • Twice as many consumers use a restaurant over a third party for delivery
                                                          • Figure 26: QSR technology experience, February 2019
                                                        • Younger consumers are driving the growth of technology at QSRs
                                                          • Figure 27: QSR technology experience, by age, February 2019
                                                        • Hispanic consumers overindex for most types of fast food tech
                                                          • Figure 28: QSR technology experience, by race and Hispanic origin, February 2019
                                                      • QSR Menu Price Sensitivity

                                                        • Premium meat items are more of an expectation than snack items at QSRs
                                                          • Figure 29: QSR menu item interest, February 2019
                                                        • Lower income consumers are most interested in fast food snacks
                                                          • Figure 30: QSR menu item interest, by household income, February 2019
                                                        • Some consumers would pay more for one premium meat item than a full value meal
                                                          • Figure 31: QSR price sensitivity, February 2019
                                                        • Younger consumers have a higher price threshold at QSRs overall
                                                          • Figure 32: QSR price sensitivity – NET all items, by age, February 2019
                                                        • Men are willing to spend more on fast food snacks
                                                          • Figure 33: QSR snack item price sensitivity, by gender, February 2019
                                                      • QSR Competitive Associations

                                                        • Consumers associate quality with fast casuals
                                                          • Figure 34: QSR competitive associations, by correspondence analysis, February 2019
                                                          • Figure 35: QSR competitive associations, February 2019
                                                        • Gen Zers have better perceptions of QSR quality and service
                                                          • Figure 36: QSR competitive associations, by Generation Z, February 2019
                                                        • Parents are more likely to consider LSRs kid friendly than the general population
                                                          • Figure 37: QSR competitive associations for kid friendly, by parental status, February 2019
                                                      • QSR Concept Interest

                                                        • Natural food and beverages are becoming an expectation at QSRs
                                                          • Figure 38: QSR concept interest, February 2019
                                                        • Natural ingredients and sustainable packaging would appeal to the majority of fast food customers
                                                          • Figure 39: QSR concept interest, by TURF analysis, February 2019
                                                        • Women are driving the demand for natural fast food
                                                          • Figure 40: QSR concept interest, by gender, February 2019
                                                        • Gen Z shows emerging interest in functional ingredients, CBD at QSRs
                                                          • Figure 41: QSR concept interest, by generation, February 2019
                                                        • Nearly half of Hispanic consumers want natural fast food ingredients
                                                          • Figure 42: QSR concept interest, by race and Hispanic origin, February 2019
                                                      • Appendix – Data Sources and Abbreviations

                                                        • Data sources
                                                          • Sales data
                                                            • Fan chart forecast
                                                              • Consumer survey data
                                                                • Abbreviations and terms
                                                                  • Abbreviations
                                                                  • Appendix – The Market

                                                                      • Figure 43: Total US revenues and forecast of limited service restaurants^, at inflation-adjusted prices, 2013-23
                                                                  • Appendix – The Consumer

                                                                    • Correspondence Analysis
                                                                      • Methodology
                                                                        • TURF Analysis
                                                                          • Methodology
                                                                              • Figure 44: Table – TURF Analysis – QSR concept interest, February 2019
                                                                              • Figure 45: Table – TURF Analysis – Visitation drivers, February 2019
                                                                              • Figure 46: Table – TURF Analysis – Reasons for loyalty, February 2019

                                                                          Quick Service Restaurants - US - May 2019

                                                                          US $4,395.00 (Excl.Tax)