Fast-food industry is back but not the fast track
Market research firm Packaged Facts reports that quick-service and snack and beverage restaurant sales are back up 4.9% over 2012, and estimates that limited-service restaurant sales will reach $188.1 billion in 2013. Sales at snack and beverage establishments will rise 4.6% to $29.1 billion. Incremental improvement in macro-economic drivers, a brighter consumer outlook, modest improvements in same-store sales, store re-imaging programs and aggressive menu innovation and limited-time offer trials all contribute positive assistance.
But the report, titled “Foodservice Landscape in the U.S.: Chain Limited-Service Restaurants,” indicates that consumers still consider prices top of mind. According to the survey data, 68% of limited-service restaurant users say low price influence their decision to go to a fast-food restaurant and 24% cite it as "most important."
This continued price sensitivity reflects the fact that macro-economic improvements haven’t buoyed all demographic boats, and some key fast food guest demographics—including households earning under $50,000 annually, African Americans, and 18- to 24-years olds—have not benefited proportionately.
Thus, quick-service restaurant (QSR) operators, which also face highly competitive, prepared foods offerings in grocery stores, will continue to have limited pricing power and face guest traffic challenges into 2014.