Paradigm Shift: Tech Trends Influence Fast-Casual Food Categories

Fast-casual food chains are eating the lunch of fast-food chains. Companies such as Panera, Shake Shack, Chipotle Mexican Grill, Nando’s, and others are reporting substantial revenue growth at a time when McDonald’s, Burger King, Wendy’s, et. al. are struggling. Combined sales of U.S. fast-casual outlets rose by 10.5% last year, compared with 6.1% for fast-food chains. There are several drivers of this development, and they derive from consumer attitudes based in qualities broadly associated with tech innovation and practices. Fast-casual food chains offer healthier food, customization of products by customers, distinctive dining settings, and tiered premium pricing (fast-casual chains earn 40% more from each customer than fast-food chains). Including these tech-related values in their offerings seems to trump the “value”—i.e. bargain-pricing—of the legacy fast-food chains. Looks like a major paradigm shift is under way in yet another sector of business.

John Howell, Editorial Director